Facts Behind the Ecobank vs. Otudeko Debt Debacle, Airtel/SEC Angle


Tuesday, May 31, 2016 14.50PM / News Investigation


The public reportage of the loan issue between Ecobank and Oba Otudeko (and company) started out as another story about debtors but soon enough it became a a story we had to stay on for much longer as it developed all the trappings of an epic.


While there are cases in court upon which we can only make a mention of, investigations reveal that there is much more than was revealed by parties about the real concerns behind one of the most unusual court cases relating to a settled debt in Nigeria’s financial history; giving the entities involved in the larger picture.


At the heart of this crisis, our investigations revealed, lies the unresolved issues of the AIRTEL shares held by Ecobank which appears to have been bought by Oceanic – an AMCON acquired asset for which Oba Otudeko had insisted on a rule that provided for his first right of refusal.


This right of refusal would have meant invoking the rule that allowed a purchase at the Old price; which would have meant that ecobank would have provided for same.


While investigations remain on-going, it appears clear that the negotiation over the loan was an extension of the negotiation on the current loan disagreement.


Welcome to the world of high finance and boardroom politics in the Nigerian financial sector.


The Dynamics

Under a new management the negotiation took a new turn and so we are left with only the details of the loan arrangement, while in the background lurks other issues related to a Securities & Exchnage Commission (SEC) report on a second audit on the allegations made by Laurence de’rogo which has never been made public; a report purportedly used to indict the former board, specifically the former chairman Kolapo Lawson which is now turning into a farce. Records from court proceedings indicate that the SEC has failed to release this report purportedly conducted by a leading accounting and forensic firm.


Investigations reveal that this report indicts Ecobank Plc; much as the first report which the investigating team reviewed.


To place in proper context, three unrelated issues appear to be converging to indicate how a small matter fo a debt payment became such a toxic issue.


In the first part of our report, we revisit the loan issue now a subject of litigation, new management or not.


The more interesting parts of the investigation will relate to the findings of the first report by the SEC appointed accounting firm and the issues around the unreleased second part by the securities regulator.


The Loan Issue and Matters Arising

At the heart of this issue is the principle of “integrity of agreements and distrusts arising from agreements made by a bank”.


The Siloam Global Services Limited/ Dr. Oba Otudeko  case had been instituted over a debt owed Ecobank Plc priorto 2013 and here are the details of what we could glean from the transaction:


Jan 19, 2013

1.       Bank Inspectors visited the bank around July 2013 – threatening to credit the account with N5.5bn

2.      The bank insisted that If Oba could pay N3.5 ( while they were around) they will seek approval to write off the balance by July 1, 2013

3.      The bank “officials” agreed to a technical “approval’ of N3.5bn being full and final payment of the loan with no conditions attached.

4.      By July 22 2013 – The agreement was that Oba Otudeko’s firm paid while the CBN officials were around

5.      By July 26, 2013            – Oba Otudeko’s firm paid N500 million and wrote a letter that the remaining N3bn will be paid over 3 years.

6.      The bank wrote back to say this was not acceptable.

7.      By Sept 2013, Oba’s firm paid in some money (we are not able to ascertain the amount)

8.     By Dec 2013, another sum was paid (details and exact sum not available)

9.      By Jan 2014, the balance and final tranche was paid by the firm as confirmed in the banks records.

10.  A request for full discharge of payment sent to the board by Oba’s firm to the Board said that the timeprovided had elapsed.

11.   This time – as explained by the bank was the interval between what was understood as a full and final payment when the CBN auditors were around and(a condition for the arrangement) and when the final payment was eventually made.

12.  Ecobank represents that the “Board” never approved the commitment N1.8bn as being written off – being the difference between the loan balance and what was paid.

13.  Oba’s firm denied this and countered that they had a letter from the bank which the bank contested as being invalid as it was not approved by the board. 

14.  The board represented that the N3.5bn represented as a Full and final settlement was not enough to:

·         Clear the debts for which the board never granted a waiver

·         Reverse Oba Otudeku/Entity from the Credit Register;

·         Release the parties as creditors; and

·         Resolve the debt outstanding.

15.   As the case progressed the bank lawyers opted to declare Oba Otudeko/Entities bankrupt to whioch he claimed he was being misrepresented and led to another suit.

16.  The Banker’s Committee was brought into the mix and a decision was arrived at that encouraged this to be presented to a larger group/committee…

17.   A reconciliatory group was worked out comprising of key players and in the issue and industry but to no avail.

18.  At the end, the bank resolved that the amount was too big to waive off (recall the originating motive we alluded to) and continued the case in court

19.   The Central Bank of Nigeria (CBN) we understand was dragged into the issue and the CBN requested that both parties shift positions to resolve same without much movement from both parties (now for obvious reasons).

20.  Sources confirmed that the bank moved from the outstanding N1.8bn to N900m for a resolution vi a letter to Honeywell Plc which was replied to turning same down and insisting on the veracity of the initial agreement backed by a letter from Ecobank Plc.

21.  After this, we understand that numerous one-on-one meetings were held with principal players at different venues which did not yield much traction or resolution

The summary of which means that the matter in court (see notes below) will continue while the issues related to the loans will contine.


It is interesting to note how these unresolved issue is treated in the books of both entities, more so the quoted firm.


This remains an on-going investigation but it remains instructive how the role of CBN and SEC impacts on how the decision is finally resolved at the courts.


The investigative report to date continues…. More about how these organizations operate…. and the role/reports of SEC.


APPENDIX  1- Justice Abang


Suit: FHC/L/CP/1572/2015          Ecobank                  V.        Siloam

Suit No: FHC/L/BK/19/2015                   Oba Otudeko         V.        Ecobank


On 16th of October, 2015 Ecobank filed a motions exparte before Justice Abang, praying for Orders:


Restraining Siloam Global Services Limited/ Dr. Oba Otudeko  from operating or dealing with funds in any bank or financial institution pending the determination of the motion on notice for the appointment of a provisional liquidator or interim receiver.


Directing and compelling all the banks and financial institutions in which Siloam Global Services Limited / Dr. Oba Otudeko has accounts, to furnish Ecobank with details of the said accounts; and Restraining Siloam Global Services Limited/ Dr. Oba Otudeko from removing its funds, investments in all banks and financial institutions or alienating/ disposing his fixed and moveable assets within Nigeria. 

The orders prayed for by Ecobank were not granted and Justice Abang ordered that Siloam Global Services Limited/ Dr. Oba Otudeko should be put on notice.


Dr. Oba Otudeko’s lawyers (Messrs. Wole Olanipekun & Co.) filed a motion on notice dated, 7th December 2015, praying the court to strike out the petition and a discontinuance of proceedings in deference to arbitration.


Siloam/Dr. Oba Otudeko today, argued that the court lacks jurisdiction to adjudicate on the matter before it.

Ecobank’s counsel   Mr. Kunle Ogunba SAN argued that the court ought to determine Ecobank’s exparte application dated 16th October, where Ecobank applied for the account of  Siloam Global Limited to be frozen. 


Chief Wole Olanipekun stated that Siloam/Dr. Otudeko had given statutory and constitutional reasons to compel the court to determine the challenge to its jurisdiction before determining the motion exparte of 16th October, 2015.


In agreement with the argument of Chief Wole Olanipekun SAN, Justice Abang  made a pronouncement that there is the need for the court to first determine if it has jurisdiction to adjudicate on the matter before proceeding to entertain  Ecobank’s exparte application of dated 16th October 2015.


The court adjourned the matter to 13th January 2015 for the hearing of the application by Siloam Global Services Limited/ Dr. Oba Otudeko, challenging its jurisdiction to adjudicate on the matter.

APPENDIX  2- Justice Idris












The Learned Justice Idris stated that by way of a Preliminary Objection, Ecobank challenged the jurisdiction of the Federal High Court to hear the suit which had been filed on behalf of Anchorage Leisures Limited, Siloam Global Services Limited and Honeywell Flour Mills Plc against Ecobank Nigeria Limited.

In his ruling, the Learned Judge ruled as follows:

1.       A cursory glance at the Statement of Claim shows that the Plaintiffs claim arose from banking transactions and this places the instant suit within the jurisdiction vested in the Federal High Court as provided in Section 251 (1)(d) of the Constitution of the Federal Republic of Nigeria, 1999.


2.      The Plaintiffs’ claim arose from a Banker- Customer relationship as such the Court has jurisdiction to hear the proceedings.


3.      The Preliminary Objection filed by Ecobank lacked merit.


4.      Costs in the sum of N10,000 were awarded in favour of the Plaintiffs (Anchorage Leisures Limited, Siloam Global Services Limited and Honeywell Flour Mills Plc).


Furthermore, Anchorage Leisures Limited, Siloam Global Services Limited and Honeywell Flour Mills Plc had filed contempt proceedings against Ecobank before Justice Idris who again ruled as follows: “That the contempt proceedings will be heard on Monday 14th December 2015.”


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2.      HONYFLOUR Notifies of its Legal Dispute with Ecobank Nigeria Ltd – Dec 24, 2015

3.      Ecobank Wants Court To Declare Oba Otudeko ... - Nairaland Forum – Dec 8, 2015

4.      Ecobank initiates bankruptcy proceedings against Otudeko - The Nation – Dec 16, 2015 

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