Airline MD Allegedly Secured ₦1.7 Billion Loan with Fake Property Documents

10 May, 2019

Do Nigerian banks carry out proper due diligence prior to offering loans that are to be secured with properties? The story below begs that question.

Proceedings from an Ikeja Special Offences Court revealed that the Managing Director of First Nation Airways allegedly used forged document to secure a ₦1.7 billion loan from Skye Bank. This revelation came to light when a legal officer with Polaris Bank (formerly Skype Bank) was testifying before the court during the trial of the MD, who is the 1st defendant in a N1.7 billion theft case. It was revealed that the defendant representing the 2nd and 3rd defendants, Bellview Airlines and First Nation Airline, in the case obtained various credit facilities from Skye Bank between 2007 and 2012.

Among the collateral presented as security for the credit facilities by the defendants are two properties in different parts of Ikeja in Lagos which the 1st defendant claimed belonged to him. However, the bank found out upon taking possession of the properties that the document presented to secure the loan was not genuine following a report obtained from Lagos Land Registry which revealed that the reference number used in the document does not exist. It was reported that after receiving the report from Land Registry, the bank contacted the 1st defendant who then provided a memorandum of loss, a sworn affidavit, a police extract and copy of March 8, 2013 publication of National Mirror Newspaper that revealed a declaration of loss of title document on page 50. The prosecution witness stated further that investigation by Skye Bank showed that the registration number of the property was not genuine and that the 1st defendant had used the same property as collateral for another loan from a different bank.

It is on the basis of this allegation that the Economic and Financial Crimes Commission (EFCC) was petitioned by Skye Bank, causing the agency to charge the defendant initially on 21st of March, 2013 for forgery, use of false document and perjury. The anti-graft commission alleged that the 1st defendant on 7th of Oct. 2016 stole and dishonestly converted N1.7 billion belonging to Skye Bank to personal use.

Information from court records also revealed that the defendants had filed a case (Suit No. LD/2938CMW/2017) on 6th of April of 2017 in a Lagos Court against Skye Bank seeking an order of perpetual injunction restraining the bank from taking possession of the properties that were used as collateral to secure the said loans.