- CBN and NCC should insist on transparent transaction process
Except there are other reasons other than that already made public, it is hard to fault the demand by the Central Bank of Nigeria (CBN) and National Communications Commission (NCC), that Barclays Africa – the financial adviser appointed by the banks to see through the sale of the beleaguered telecommunications firm, 9Mobile – must ensure utmost transparency in the transaction process.
In their joint letter to GT Bank – the facility agent for the 9Mobile syndicated loan – made public last week – the CBN governor, Godwin Emefiele, and executive vice-chairman, NCC, Umar Danbatta, had accused Barclays Africa, the lenders’ financial advisers of “unwillingness to follow due process” in the bid process. They charged that Barclays has “repeatedly exhibited signs of opacity in the sale process for 9Mobile. Given the overriding public interest in the company and the need for transparency, we advised that Barclays advertise the call for ‘expression of interest’” –which it reportedly turned down, “insisting instead that the company being a private entity, should not be taken through a public sale”.
“This lack of transparent process has proven to be selective and arbitrary, leading to allegations that the process is being teleguided to a rigged and predetermined outcome. The CBN and the NCC will not fold their arms and allow this to materialise”, they wrote.
As financial advisers appointed by the lenders, their position of being solely answerable to their principals as against the two regulators would ordinarily seem understandable. Indeed, in the absence of any formal takeover of the debt by any public agency, the consortium – represented by Barclays – could claim to have the law on its side to the extent that the N541 billion debt owed its principals subsists.
That position, however, can only be deemed tenable when the intervening role of the CBN and the NCC in stabilising the telecoms company in the aftermath of the insolvency is wholly discounted.
In the first place, the current animus would never have arisen had Etisalat – the original telecoms company not defaulted on a $1.2 billion medium-term, seven-year facility obtained to fund expansion of its network in 2013. We are talking here of the staggering $696 million left to pay on the loan three years after – and the telecoms firm’s failure to service it. If we may recall – that the CBN and NCC actually stepped in to clear the mess was a matter of national interest, borne of the exigencies to save both the telecoms and the financial services industry as a whole. This was after all efforts to get the loan restructured had proved abortive, and shortly after the company’s Abu Dhabi majority shareholders (which held 45 percent of the shares) made their exit and local creditors were left to stew in their juice.
Without the critical intervention which saved the company from collapse and prevented creditors from putting it into receivership, it goes without saying that the financial adviser will have no entity to talk of let alone one to advise upon; just as the creditor-banks will certainly be in worse state than they are today. That they did to save the company when it mattered most should therefore make them critical stakeholders in the resolution process.
Nothing in the demands of course can be deemed as either injurious to the cause of private entities or incompatible with the principles of corporate governance and best practices which Barclays Africa claims to practice. That being the case, the regulators should insist that the financial adviser adhere strictly to them. And if it is true as reported that Barclays Africa has pulled out from the deal, the two regulatory helmsmen only need to remind the corporation that the industry didn’t get this far with lax regulation; and certainly not with players insisting on playing only on their own terms.
