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Disturbed by the recent $1.2 billion debt crisis rocking Etisalat Nigeria, the Senate has mandated its joint committees on Banking; Communications; Capital Market, and National Security and Intelligence to investigate the management and utilization of the loan facility obtained from the 13 Nigerian banks by the telecommunication company.
The upper legislative chamber asked the joint committees to make recommendations on how Nigeria financial governance structure can be strengthened by legislations to prevent future occurrences.
It also urged the relevant financial intelligence agencies to investigate the management of Etisalat Nigeria and hold the defaulting parties accountable for their actions.
This followed a motion moved by Adeola Olamilekan (APC, Lagos State).
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In a motion titled: ‘The need for Senate’s Intervention in the recent Etisalat (Nigeria) $1.2 billion debt crisis’, he recalled 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 the country.
According to him, the Etisalat ownership comprises of three shareholders, the United Arab Emirates Sovereign Wealth Fund through Mubadala Development Comp Abu Dhabi (45%), Emirates Telecommunications Group Company (40%) and Myacinth (15%) through Emerging Markets Telecommunications Services.
He however, noted 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.
“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. Since this year, the banks have been moving to take over the Telecommunications Company in order to recover their funds,” he said.
The lawmaker stressed the need for Nigerian business environment to be protected and insulated from all forms of fraudulent dealings in order to advance the government’s drive towards promotion of genuine investments in the country.
While noting that the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have intervened and raised issues of regulatory compliances in trying to prevent a takeover by the banks, he said the intervention has failed to produce an agreement on the debt restructuring.
He further observed that all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company coupled with the resignation of top key management officers of the Companythe Chief Executive Officer Matthew Willsher, Chief Financial Officer Wole Obasunloye, Director and the third shareholder/partner, Hakeem Belo Osagie.
Adeola, however, pointed out that although it should ordinarily not be the duty of the Senate to wade into individual debt crisis of private sector businesses; but it was convinced that if this situation is not properly handled, it will have negative implications for the Nigerian business environment and on foreign investments in the country as a whole.
He regretted that “a loan of this magnitude has the capacity of setting off another banking crisis in Nigeria, with banks looking for bailout funds once again”.
In their separate contributions, Barau Jibrin (APC Kano State), Magnus Abe (APC Rivers State) and Gbenga Ashafa (APC Lagos State) emphasized the need to investigate the loan crisis with a view to saving jobs for the teeming youths and prevent future occurrence of losing a company of such magnitude.
In his remarks, Senate President, Bukola Saraki, said corporate governance needed to be strengthened by legislations to prevent future occurrence.
OWEDE AGBAJILEKE, Abuja
