Stakeholders oppose AMCON's deadline on bank's acquisition

CRITICISM has greeted the Asset Management Corporation of Nigeria’s (AMCON’s) limited time given to interested parties in the acquisition of Mainstreet Bank limited, to submit their Expression of Interest (EOI). In advertorials in the media last week, AMCON said the EOI should be submitted not later than next Friday, May 16, 2014.

  Some prospective investors and shareholder groups who had stake in the defunct Afribank Plc before its transmutation to Mainstreet Bank, have expressed concern that the one - week deadline set by AMCON  is not sufficient  for any meaningful evaluation and due diligence to be done on the bank. They are urging the CBN , currently being headed by Dr. Sarah Alade as acting governor and the Presidency to prevail on AMCON to allow  interested buyers more time to prepare their EOI. 

But the Chief Executive Officer (CEO) of AMCON , Mustapha Chike Obi  said yesterday that Expression of Interest (EOI)  was not a big deal and that one week was enough for people who are interested to show genuine interest and “tell us who they are and we’ll take it from there.”

  The parties who asked that their identity be veiled so as not to jeopardise their interest, or be victimised, believe that the rush by AMCON to push Mainstreet Bank through the divestment process without taking cognisance of the enormous work that needs to be done to ensure fairness and transparency in the eventual bid process, has put a question mark on AMCON’s intention in its divestment from the bank.

  While agreeing with AMCON on the need to move ownership of the bridged banks from the domain of public ownership and government control to the private sector, the concerned shareholder groups and potential buyers, argued that the process that will eventually lead to the change of ownership should be well streamlined, publicised and allowed enough time to be examined by all interested parties, and should never be an issue that should be, “as it were, rushed, as though there is more to it than meets the eye.

  “It is a welcome development that these banks are eventually finding their way into the private sector domain where they should be in the first place, but we insist that the process should be meticulous and not rushed, as no purpose will be served if the divestment is not transparent, or seen to be so,” they said, adding that one week is grossly inadequate for a thorough job to be done and for every participant to be acquainted with the requirement to meet the rigorous process in the evaluation exercise, “except they want us to go home with the impression that this is a predetermined exercise.”

The groups who are insisting that every interested party in the acquisition of Mainstreet Bank  should be given equal opportunity,  cautioned that AMCON, having midwifed the banking transformation process successfully thus far, should not rush into taking  decisions, or actions that would appear in the eyes of stakeholders to be pursuing  “a hidden agenda, surreptitiously.”

  They maintained that the bridged banks, namely, Mainstreet Bank Limited, Enterprise Bank Limited and Keystone Bank Limited are national assets, to which every Nigerian has a claim, and as such, all the processes leading to their sale, or privatisation at any material time must be done in such a manner that no one is seen to be excluded, either by way of withholding information, or restricting access to the sales’ process by not allowing sufficient time for interested and qualified persons to participate therein.  It would amount to disservice and criminal acquiescence for AMCON to ignore the concerns of Nigerians by going ahead with the process of selling Mainstreet Bank Limited, or any of the other two when they are eventually brought to the market, without incorporating the interest of other potential buyers, (even if a single buyer) by ignoring the call for elongation of the time allotted to submit EOI and proceed with the divestment process as contained in the AMCON’s  advertisement, the stakeholder groups, said.

  They drew AMCON’s attention to the mood of the nation presently, regarding the kidnapping of “our daughters” by Boko Haram, stressing that no feeling of any  Nigerian should be further dampened by actions of those entrusted, not only to protect, but defend their interests.

Taking cognisance of the transition in the Central Bank of Nigeria (CBN), the groups said much confidence would be derived if AMCON were to tarry a while and give the CBN Governor designate, Godwin Emefiele and his team the benefit of introspection, rather than rush the process as though any harm will be done if the divestment is not accomplished today and foist upon the new CBN governor a fait accompli. They recalled the lingering and unresolved labour issues that have trailed the acquisition of some of the previously sold, or acquired banks, stating that none of the bridged banks being prepared for privatisation at this time should be made to suffer the same fate.

   They said  labour matters are intractable and should be properly addressed this time around to avoid any backlash.

In its advertisement calling for Expression Of Interest (EOI), AMCON said interested buyers should provide information in respect of the vehicle, or entity they intend to use in the acquisition, among others, with evidence of registration with the Corporate Affairs Commission, ownership of the acquiring entity, identifying all shareholders with five per cent , or more stake, and strategic rationale for the acquisition of Mainstreet Bank.

In addition, interested firms are expected to provide relevant financial services industry where they have acquired cognate experience and demonstrable evidence of ability to manage a bank of the stature of Mainstreet, as well as evidence of financial capacity.

  However in the case of a consortium, AMCON required that the parties must provide evidence of alliance, or partnership, clearly indicating the leader of the group that is authorised to submit the EOI, adding that full names of contact persons, e-mail addresses, as well as any relevant information that demonstrates credibility and eligibility for the transaction, are required. 

Chike Obi told The Guardian in a chat that EOI stage is not the same thing as stage for due diligence.

According to him: “It is just to show people who are interested and from the interests shown, we will shortlist for due diligence on them.”

He continued: “For instance, 26 expressed interest in Enterprise Bank and only seven were qualified for due diligence. So there is nothing strange about EOI within a week.”

Source: Guardian Newspaper