HomeBUSINESS UPDATESEcobank vs Otudeko: How It All Started

Ecobank vs Otudeko: How It All Started

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A major player in the Nigerian financial sector, Ecobank is currently in a hot chase on investor and former chairman of First Bank of Nigeria (FBN), Dr Oba Otudeko over an accumulated debt N13.5 billion owed to the bank ten years ago.

It was gathered that Dr Otudeko who then owned Honeywell had approached the bank to lend him N5.5 billion which the bank obliged and Dr Otudeko later sold Honeywell (under which he acquired the loan) to Flour Mill of Nigeria.

Ten years after, Ecobank is asking Dr Otudeko to repay the accumulated debt.

In a recent report, Ecobank having discovered that their debtor, Dr Otudeko was on the verge of acquiring some 4.7 billion shares in First Bank Holdings urged the bank to reject the acquisition due to the investor’s indebtedness to it.

The bank in a statement issued by its Legal Counsel, Kunle Ogunba & Associates, stated that the business magnate, through his affiliated entities, owed the bank N13.5 billion.

The letter, dated July 7 and signed by the Principal Partner of the law firm, Oludare Amusan, said the bank had instituted several lawsuits against Honey Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell flour Mills PIc and Dr Oba Otudeko at the Federal High Court, Lagos.

The letter said Otudeko personally guaranteed the loan leading to the indebtedness of the prior-mentioned companies.

Why Dr Otudeko is not bothered or threatened is that the company’s name he used in getting the loan – Honeywell no longer exists because he had sold it to Flour Mill of Nigeria for N82 billion.

It will be difficult for Ecobank to recover their loan unless a higher authority intervenes because Dr Otudeko’s wealth is not easy to trace, sources claim that he has scattered his wealth using SPVs (Special Purpose Vehicles) and proxies, making it difficult for for anyone to trace any of his asset or money that he owned.

Ecobank have tried to recover their money from Dr Otudeko and one of which is the current legal case with the investor dragging Flour Mill of Nigeria into Honeywell.

Flour Mill’s crime is that they bought Honeywell from Oba Otudeko even when they were warned, so they must be liquidated too.

It was gathered that Ecobank warned Flour Mill not to buy Honeywell, but they ignored the warning which made them to be part of the case.

Angered and miffed by the audacity of Oba Otudeko and the fact that he has money to pay back the loan but rather chose to go and buy First Bank Sheres, Eco Bank has written a letter to First Bank,advising FBN Holdings, the parent company of First Bank of Nigeria Limited, against approving or accepting the investment due to outstanding “humongous indebtedness” by the company and its founder, Dr. Oba Otudeko.

Ecobank argued that instead of taking steps to repay their indebtedness in line with the mandate of the Supreme Court, “it has come to our notice that Dr. Oba Otudeko (being the prime mover and alter ego of the debtor companies who personally guaranteed to repay the said debt) has taken steps to divert his assets and funds and those of the debtor companies.

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