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Published On: Wed, Oct 25th, 2017

Senate probes $1.2bn debt in Etisalat

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By Christiana Ekpa and Ikechukwu Okaforadi

Senate yesterday Mandated its Committees on Banking, Communications, Capital Market, National Security and Intelligence to investigate the management and utilization of the $1.2billion loan facility obtained from 13 Nigerian Banks by Etisalat The Upper Chamber also Mandated the above Joint Committee to make recommendations on ways the Nigeria Financial Governance Structure can be strengthened by legislations to prevent any future similar reoccurrence;
It equally Urged the relevant Financial Intelligence Agencies of the Federal Government to investigate the Management of Etisalat Nigeria and hold the defaulting parties accountable for their actions.
The resolution of the senate followed the adoption of a motion sponsored by senator Adeola Olamilekan on “The need for Senate‘s Intervention in the Recent Etisalat (Nigeria) $1. 2 Billion Debt Crisis
The lawmaker noted that Etisalat Nigeria, a Telecommunication Company operating in Nigeria had in recent times been in the public eye over its 1.2 billion dollars loan crisis.
He explained that the syndicated loan was acquired in 2013 as a medium-term, seven-year facility to fund expansion of the network from a consortium of 13 Banks in Nigeria.
“Notes that Etisalat ownership comprises of 3 Shareholders, the United Arab Emirates Sovereign Wealth Fund through Mubadala Development Comp Abu Dhabi (45 /u), Emirates Telecommunications Group Company (40%) and Myacinth (15%) through Emerging Markets Telecommunications Services; “Notes that as of 2016, the Company had started defaulting on its $1.2 billion loan obligations leading to a few bailouts from its Parent Company in Abu Dhabi;
“Understands that only about 42% of the loan has been repaid, remaining an outstanding debt of $696 million representing 58% of its Capital, which Etisalat has failed to service since 2016; Regrets that although it should ordinarily not be the duty of the Senate of the Federal Republic of Nigeria to wade into individual debt crisis of private sector businesses; but the Senate is convinced that if this situation is not properly handled, it will have negative implications for the Nigerian Business Environment and on Foreign Investments in Nigeria in general; He said about 4000 jobs are at stake as a result of these suspicious dealings; “Aware of allegations that the loans have been diverted to other uses not related to the business for which the huge loan was obtained, as there was no evidence of what the Company did with the loans” Contributing, Senator Jbrin Barau said “ The motion is important because the debt crisis will leads to an affair that if not well handled will affect severeal Nigerians under the employment of 9-MOBILE, it will also affect the Nigerian economy negatively.
“We need to investigate and find out how the money was utilized. Check their records. it could be that it was designed arrangement to defraud the company and divert the money for private use.
This is quite inimical to our economy.
Also contributing, Magnus Abe (APC-Bayelsa) said “What has happened to 9-mobile goes beyond this particular issue, it goes to the roots of the culture of corporate governance in this country.
“All over the world, the integrity of the economy of any nation is tied to the integrity of not just the stock market but the integrity of the behavior of the managers of the major companies in the economy.
“Whether we like it or not, in this country today, the top companies employ as many people as the government. When things happen like this that affect the ability to operate, it is no longer just their personal problem it can become a problem for the entire country.
“If we run where investors whether local or foreign can come into our countries use our laws and do whatever they like, and there is no regulation, there is no punishment, at the end of the day it affects every other thing in the country.
“This issue should be looked at not just in the light of this particular issue but in the light of the regulation of corporate governance and the regulation of our stock market In his remarks, the Senate President Bukola Saraki said, the Upper Chamber must do all it can to protect jobs for Nigerians.
“We must do all we can to protect jobs for our people, the investment climate of this country, corporate governance is important. We must also look and see that we can prevent this kind of issues to continue to provide the right investment climate to the country.
“I hope the committee will do a fast work and sent it in, which we can use to guide ourselves to find out what really happened and ensure that there are no abuses of regulations un anyway.

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