Unity Bank, Milost controversy under investigation – SEC

Unity Bank
Unity Bank [Photo: The Guardian Nigeria]

The Securities and Exchange Commission (SEC) on Monday said it was still investigating the one billion dollars investment in Unity Bank Plc by Milost Global Incor.

Efe Ebelo, SEC’s acting Head, Corporate Communications, confirmed this to the News Agency of Nigeria (NAN) in Lagos.

Mrs Ebelo said the investigation into the Unity Bank/Milost case by the commission was still on, and that anyone found wanting in the case would be sanctioned appropriately in line with laid down regulations.

She, however, assured the investing public that the commission would not relent in its efforts to protect their interest.

NAN reports that Milost Global Incorporated, the New York-based private equity firm, on March 26 said it would no longer go on with its proposed investment in Unity Bank.

The company said this in a statement issued by Kim Freeman, Milost’s Chief Executive Officer.

Unity Bank had earlier denied knowledge of the investment.

In the statement, Freeman said his company was approached in 2017 by the bank’s chief executive officer and chief financial officer.

“Following the call, a desk top due diligence was conducted by Milost to its satisfaction. On Sept. 4, 2017, a one billion naira financing term sheet was fully executed by both Milost and Unity Bank,” the statement read.

“The facility, a combination of equity and debt, was provided on the exciting understanding that Unity Bank would delist on the Nigerian Stock Exchange and move its listing to the USA.

“The signed term sheet was approved by the board of Unity Bank,” it said.

But Unity Bank on March 29 denied reports that the bank had signed 60 per cent holding structure or one billion dollars investment with Milost.

The bank, in a statement on the Nigerian Stock Exchange (NSE) website, assured shareholders and stakeholders that there was no agreement whatsoever with Milost Global alluding to 60 per cent of Unity Bank shareholding.

The statement said the bank did not at any time suggest or agree to move its listing from the NSE to the U.S.

“Milost Global Inc. is one of the prospective investors introduced to the bank by a local entity called Mayo BV.

“It is not unusual that this introduction and expression of interests would involve some level of preliminary discussions and exchange of non-binding documentary communications between the intending parties,” it said.

According to the statement, the Term Sheet dated September 4, 2017, said to have been executed, was a proposal submitted by Milost Global Inc. for discussion purposes only and not a commitment by the parties.

It said no definitive documentation governing the proposed financing was executed.

The statement said there was no iota of truth in the allegation that the bank had executed a ”binding commitment agreement.”

“The bank’s position is on the premise that a document prepared by Milost merely contained the suggested terms and conditions on which Milost was planning to consider its possible funding of the bank,” it added.

The statement explained that the bank had been involved in a series of preliminary engagements with several prospective investors including Milost, and did not execute a binding agreement with Milost Global Inc.

It is, therefore, a misnomer for anyone to claim that the bank issued a false statement relative to the nature of the communication between Milost and the bank.

“The nomenclature ‘Commitment Letter’ was apparently adopted by Milost in its communication to buttress its seriousness to proceed with the transactions subject to relevant compliance requirements. (NAN)

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