Living Trust Mortgage Bank: What Oyebamiji owes Osun people?

Living Trust Mortgage Bank: What Oyebamiji owes Osun people?

By Sarafa Ibrahim

In 1993, Osun did the unthinkable. It was only two years after it was carved out of Oyo state yet, it was able to raise hopes for the future. That was what the decision to incorporate a financial company, the Osun Building Society Limited, clearly portrayed.

The company was established to provide mortgage banking services, mortgage financing, real estate construction financing and general financial services. It was a bold and futuristic step, and interestingly, was taken under the administration of the first Executive Governor of Osun State, late Senator Isiaka Adetunji Adeleke. That kick-started a journey that not just spotlight the financial identity for Osun state but also a strategic investments for the benefits of all.

But all of that is gone now and the reason for this is in a 2019 deal that put the controlling shares of the state in the financial company in jeopardy. The administration of Gboyega Oyetola sold-off a significant amount of shares of the state in the financial company to Citytrust Financial Service, leaving the private firm with majority stake.

This brought about a lot of changes. From the name, Omoluabi Mortgage Bank to LivingTrust Mortgage Bank, all the lofty vision and hopes that went into the venture went up in flame. The effect of the ‘deal’ was swift and brutal as the organisational structure quickly tilted to the side of the supposed private investors, and Osun was striped of the benefits of years of efforts and investments.

And in all of these, there is no one who can say exactly what was the worth of Osun shares in Omoluabi Mortgage Bank that was traded off and what happened to the money. There is no way one can turn away from the question on the proceed of the share sale especially in the light of the revelation of a former commissioner of finance under the Rauf Aregbesola administration.

In a piece sometime in 2021, Dr. Wale Bolorunduro disclosed that the Aregbesola administration had injected “N2 billion to retain that bank through structured leverage capitalization and before Aregbesola left office, the total assets of that bank was over N5 billion. I guess Oyetola’s government has sold some shareholding, which could worth N2 billion in that bank now.”

At least, Osun people have every rights to know what happened to their investment in the financial company, more so, when Dr. Bolorunduro noted that the fund injected in Omoluabi Mortgage Bank by the Aregbesola administration was borrowed. That is what accountability is all about and Mr. Bola Oyebamiji, as the Commissioner of Finance, who is at the centre of the unfortunate development, owes Osun people that.

But there is something even more troubling in the whole arrangement. And that was particular disclosure by the Economic and Financial Crimes Commission (EFCC) that CitiTrust Holdings PLC a financial firm that a whopping 41 percent stake in an Osun-owned Bank, the Omoluabi Mortgage Bank was ceded to, is a Ponzi scheme, and that Nigerians should avoid them.

This is scary, right? That was exactly how I felt after my attention was first drawn to the advisory from Nigeria’s premier anti-graft body and curiously, this information could be verified on https://www.efcc.gov.ng/efcc/news-and-information/news-release/10779-efcc-alerts-the-public-on-58-illegal-ponzi-scheme-operators, which left me seriously perplexed.

But that was not all. There are strong indications that the financial firm that Osun’s interest was jettisoned for, has turned out to be an unknown entity to the Central Bank of Nigeria (CBN) and the Nigeria Security Exchange, two bodies saddled with the operation of financial entities in Nigeria, according to the EFCC.

Beyond this, Justice Friday Ogazi of the Federal High Court in Lagos, had in a order directed the EFCC to take over assets of CitiTrust Holdings PLC, pending ruling on the application for a final forfeiture of the firm’s asset. On the list of assets to be forfeited is the 40% shareholding in the LivingTrust Mortgage Bank PLC, which is valued at N6.5 billion. In essence, what was taken from Osun may be lost forever and worse, likely to bear negatively on the bank as a whole.

So, what does this mean? To be candid, it cannot be good and it raised serious questions about the motive of those who sanctioned the deal in the first place. From the start, Osun’s interest did not seem to be a consideration because the state got almost nothing from the transaction that stripped it of most of its significant ownership of the bank.

In corporate financial parlance, it was more like a “cash out” because the transaction didn’t in anyway benefit LivingTrust Mortgage Bank PLC as the share capital of the bank did not change from the ₦2.5 billion, which was the initial capital of the now defunct Omoluabi Mortgage Bank PLC. Although the transaction was painted as a necessary one for the bank’s viability, but the reality simply showed that wasn’t the case as only a few people benefited at the expense of Osun people.

Painfully, the Osun state government at the time Osun’s shares were transferred to CitiTrust Holdings PLC settled for a ridiculous N1.5 billion to transfer control of a bank that was already worth over N5 billion in term of assets. Yet, there was no record of the transfer of the supposed receipt for the shares sale to Osun’s treasury in line with Appropriation Law and the state’s Public Finance Law. Instead, the money found its way to OSICOL, which utilisation is still a source of misery till this moment.

So, the question that must linger in the minds of every conscious Osun citizens is what was the basis for such flawed ‘deal’. This question becomes necessary considering that Osun’s interest was largely jettisoned for private concerns and that not only made a terrible mess of the lofty vision that birthed the venture, but put future expectations in jeopardy.

Although, those who did this tried to persuade concerns that it is in Osun’s best interest. But that is not what is happening. It is unimaginable that a venture that was wholly owned by Osun state in the beginning has been manipulated in favour of a private firm and individuals without the knowledge of the real owner of the asset, which is the Osun people.

Unless we want to continue to lie to ourselves, the glaring reality as far as the LivingTrust Mortgage Bank is concerned, is that Osun people has been shortchanged. The vision, the purpose, resources and sweat that went into the creation of the financial company about 33 years ago has been defeated, and the most painful things here is that, it may not be possible to reverse it.

Perhaps it will not be too late for those who traded off Osun significant control in the Omoluabi Mortgage Bank to come clean on what transpired and if possible, let the people know what happened to the money realized from it. While this may not be enough to salvage the already done damage, at least, Osun should get something from a terrible deal that will reverberate for a very long time.

Omoluabi Mortgage Bank isn’t just a bank, but one of the heritage bequeathed on generations of citizens, or so they thought, by founding fathers. And if what happened to the bank tells us anything, it is that Osun people cannot trust their future to those who choose personal interest over collective interest as doing so would cause more devastating losses.

• Sarafa Ibrahim writes from Osogbo, Osun state. He can be reached via neyoclass09@gmail.com