Apart from the N88.3bn non-performing loan Mr. Ololo’s companies owe the troubled five banks, he also admits owing the following

UBA N12.7billion

Zenith N10billion

Ecobank N3.95billion

GTBank N1.4billion

Bank PHB N8.5billion

Standard Chartered Bank N5billion

Stanbic Bank (Self) N300million

First Bank N7.3billion

FCMB N2.3billion


Source: http://234next.com/csp/cms/sites/Next/Home/5460924-146/story.csp

[size=16pt]Peter Ololo: Biggest Bank Debtor [/size]
August 31, 2009 11:21, 5,489 views
By Tayo Odunlami

Peter Ololo might not have been born great. But he has achieved greatness the negative way with his company, Falcon Securities, emerging Nigeria’s biggest bank debtor

 
  ^{Ololo and Madoff}
Until two weeks ago, Peter Ukuoritshemofe Ololo, to nearly all Nigerians, was a completely unknown quantity. Today, however, a national record of financial default has thrust the Delta State-born stockbroker into prominence. Since penultimate Monday, Ololo, Managing Director of Falcon Securities Limited, has been hugging the headlines as the biggest debtor to Nigerian banks.

Ololo’s induction process into Nigeria’s Hall of Infamy  began on 14 August when Governor of the Central Bank of Nigeria, Lamido Sanusi removed Erastus Akingbola, Cecilia Ibru, Barth Ebong, Okey Nwosu and Sebastian Adigwe as managing directors of Intercontinental Bank plc, Oceanic Bank, Union Bank plc, Finbank plc and Afribank plc respectively. Offences that earned the bank chiefs the sack, as reeled out by the CBN Governor, are poor corporate governance practices, lax credit administration processes and non-adherence to sound credit-risk management practices, lapses that aggregated in high level of non-performing loans that threatened the survival of banks and the economy.

The five banks were said to be responsible for 39.9 per cent of loans in the banking industry. Oceanic Bank plc, the CBN maintained, had the highest non-performing loan of N278.2bn as at May 2009; Intercontinental Bank, N210.9bn; Afribank, N141.9bn; Union Bank, N73.6bn and Finbank, N42.4bn. Altogether, the five banks had a total loan portfolio of N2.8trillion, with margin loans given to borrowers to buy stocks contributing N456.3bn. Loan exposure to the oil and gas sector was N487billion. Aggregate non-performing loans stood at N1.14tn, representing 40.81 per cent of the total loans.

Such bad loans endangered the capital adequacy of the five banks; one bank actually had a ratio of only 1.01 per cent. Sanusi said the five banks needed a minimum capital injection of N204.9bn to enable them meet the industry’s minimum capital adequacy ratio of 10 per cent. Worse, the banks’ liquidity ratio by 31 May 2009 was below the regulatory minimum requirement of 25 per cent. To address the situation, the CBN gave N400 billion to the  five administrators it picked to replace the sacked managing directors. The administrators are Mahmoud Lai Alabi for Intercontinental; John Aboh for Oceanic; Suzanne Iroche, Finbank; Nebolisa Arah, Afribank and Funke Osibodu, Union Bank. Sanusi signed off on these dramatic disclosures with a promise to name the non-performing debtors endangering the existence of the five banks.

Four days later, the CBN Governor matched his promise with mind-boggling revelations that are still reverbrating through the country. Names of some influential Nigerian businessmen that have always been suspected to be heavy debtors to banks were in the CBN’s blacklist quite all right. Aliko Dangote. Femi Otedola. Jimoh Ibrahim. Henry Imasekha. But the pack was led by a name hitherto uncelebrated in Nigeria’s social and economic scene: Falcon Securities owned by Peter Ololo. The company was said to be owing the five delinquent banks a total of N88.3 billion, eclipsing fellow debtors Imasekha, who, through Ascot Offshore Nigeria Ltd., owes N44.67bn; Onajite Okoloko, who operates Notore Chemical Industries Limited and owes N32.39bn; Johnson Arumeni’s Rockson Engineering  Limited, which owes N36.9bn and Transnational Corporation (Transcorp), chaired by Prof. Ndi Okereke-Onyiuke, which owes N30.86bn. There are numerous other lesser debtors, many of whom have since been offsetting their obligations as the Economic and Financial Crimes Commission, EFCC, hounded them all through last week.

Though widely unknown till now, Ololo has been around at the Nigerian Stock Exchange for over 15 years as a chartered stockbroker. A Bachelor of Science (Accounting) graduate of Ahmadu Bello University, Zaria, Ololo had worked at Union Bank of Nigeria plc and ICON Limited (Merchant Bankers) where his exposure to the capital market adequately prepared him for his current responsibilities as Managing Director of Falcon Securities. Regarded by his professional colleagues at the NSE as unassuming, the stockbroker is a conservative breed of the old school who, a friend confided in TheNEWS, hardly dons designer suits and rode for a long time in an old Peugeot 505 saloon car. Beneath all that spartan outlook, however, is an astute businessman who controlled the largest volume of trading business on the Exchange.


Over the years, Ololo built up a solid reputation as a shrewd, reliable and fearless stockbroker so much so that banks and his other clients readily entrusted him with huge funds. The stockbroker, a colleague said, would always produce funds for his clients whenever they demanded, even if he had to do so at a personal loss. “Mr. Ololo is such a person that will even sell stocks at losses just to satisfy any bank that will request for their funds or demand a sudden fund recall. He will sell stocks just to satisfy them. And because of that credibility he has earned that he would always produce results at such notice, banks have so much confidence in him and were always falling over one another to grant him huge facilities with which he traded on the floor of the Exchange,” a fellow stockbroker disclosed.

Colleagues have always marvelled at what they considered Ololo’s queer practices, sometimes. For instance, he would trade in the opposite direction when his colleagues were flocking in one direction. A source at the NSE explained that when certain stocks were on offer, with supply exceeding demand and every stockbroker was offering, Ololo would just decide to mop up the entire market, buy up whatever his colleagues were offering, to a wide applause from his colleagues and even the regulatory authorities. The huge volume and value of his transactions always impacted tremendously on market operations. Ololo is reputed to have been the regular largest contributor in transaction fees to the regulatory authorities of the Securities and Exchange Commission, SEC; the NSE and the Central Securities Clearing System, CSCS, since the CSCS came on stream in 1997.

As TheNEWS investigations uncovered, banks were actually the driving force behind Ololo’s wild transactions on the floor of the Exchange. The embattled stockbroker, now singing like a canary at the Lagos offices of the EFCC, was understood to have confessed to the Commission how banks have been granting him huge facilities to manipulate stocks at the market. He was understood to have received a N30bn facility from Union Bank, another N22.2bn from Oceanic Bank and N3bn from Finbank. The stockbroker was learnt to have said that the banks, in most of the debt albatross round his neck, were the Muhammed that approached his mountain with credit facilities to invest in stocks. But the investments were largely questionable. According to his company’s audited accounts for 2007, Falcon secured a total of N89 billion in loans and overdrafts from the banks to buy shares. In addition, the company got N43 billion from the investing members of the public, among whom must be some banks in search of profitable deals in stocks at the Exchange. In all, in 2007 alone,

Falcon splashed N133 billion on stocks at the Exchange, the biggest by any stockbroking firm in the country and almost a 1000 per cent increase over the company’s outlay in 2003.

With a seemingly bottomless treasury, Ololo’s Falcons almost became the single driver of the Nigerian Exchange. His company’s modus operandi was simple. In cahoots with some banks that wanted to jack up the price of their shares, Ololo’s Falcon would mop up the shares even when other traders were dumping them, creating the illusion that the stocks were in hot demand. At a stage, the Nigerian market really turned an illusionist market, run by Houdinis of all shades. Companies that wanted to raise fresh capital, enlisted the services of brokers like Falcon to play games with their stocks, usually magically engineering them to move upwards, without sound financial underpinnings. There were some cases where some stocks appreciated more than 100 per cent, sometimes 200 per cent  in one month, making the Nigerian market the best yielding globally. Having driven the stock to the desired level,  the company would announce a public offer ‘‘at a discount.’’ The public would think the company was doing it a favour, but in actuality, it was taking everyone for a ride. But it was all a game of illusion, that entrapped millions of innocent Nigerians. And Ololo and his Falcon were the grandmasters.

The banks shared in the drama of deception by providing  the stockbroker with funds to purchase their shares to give the impression of huge public demand and market appreciation. Union Bank, one of Nigeria’s oldest banks, secured the services of Ololo last year on the eve of its aborted attempt to raise fresh capital. It gave his company N30 billion to buy its shares and in the process increase the market valuation of the shares. But the market meltdown that started in March last year became unrelenting as it thwarted all the games and made Ololo’s loan  a bad loan. In his statement to the interrogators at the office of the EFCC, Ololo confessed that he did not go out of his way to seek the loan, Union Bank sought him out and gave him the money.

To be sure, some Nigerians were suspicious about the market, about the inexplicable price increases of stocks, even for dead companies. But the regulators, the SEC and the NSE did not heed their protests. Even the regulators enjoyed the bizarre bazaar in accruing fees. No one cared about the integrity of the market.

Ololo, with so much money to play with, did not restrict his investment to stocks. He diversified into real estate, oil and gas through substantial ownership in Petosan Property and Development Company Ltd and Petosan Oil & Gas Company Ltd. The former owes N10bn to Afribank plc and N6.39bn to Oceanic Bank plc.  Both are bad loans. The oil  firm is owing Oceanic Bank N5.10bn.

Unfortunately for Ololo, misfortune didn’t just rain on him in his three investment areas of stocks, property and oil and gas, it poured, and simultaneously too. The global financial meltdown infected the business clime in Nigeria in all those areas and the value of his investments crashed extensively.

As the EFCC mounted  pressure last week on many bank debtors to  meet their obligations, investment [b]analysts generally posited that it would be extremely difficult to squeeze anything near a quarter of the N88.3bn Ololo is owing to the five banks. Unlike some well-heeled debtors who boast of multi-billion choice properties they can sell, and, indeed, have been selling to offset their debts, Ololo’s investments in property and oil are still inconsequential and yet unrewarding as to have any impact on his debt commitments. His sight, and that of his financiers, that is the banks, was fixed squarely on the stock business which, at a time promised and did churn out dizzying, immediate returns. A greater percentage of the stockbroker’s investments are, understandably therefore, in stocks, on which the loans were collaterised in the first place. With stocks on a free fall since March last year, Ololo’s multi-billion Naira investments in them amounted to nothing and he began finding it impossible to service his loans. Consequently too, the share accounts as collaterals also became useless. Compound interest mounted on the capital and the crazy debt burden suddenly brought Ololo out of obscurity and turned him into a national figure, albeit an unenviable one.[/b]

But for Sanusi, Ololo’s Falcon’s monumental debt profile to banks may have remained unpublicised for a long while, even as they drag the creditors into possible extinction. As far back as 2007, Falcon’s debt exposure to banks read N89.16bn. The overdraft/short-term loans were, according to its 2007 Annual Report, “secured by lien on various stocks” valued at N70.93bn that it owned. The company’s management and its bank creditors were apparently banking on huge returns from this huge investment in stocks to provide a steady stream of capital to gradually wipe off the equally huge debts, all things being equal. Unluckily for Ololo, all things are not always equal in the turbulent waters of business, most especially the stock market.

It is a lesson the stockbroker learnt too late as he undergoes the EFCC grill and public opprobrium. The Commission’s Chairman, Farida Waziri blew hot last week, ordering debtors like Ololo to pay back every kobo they borrowed or they would go to jail for the “illegalities” they committed.

Ololo’s colleagues at the stock market detested the use of the word “illegalities”. To them, the stockbroker has not committed any crime in collecting loans from banks to invest in the stock business. One told this publication last week that for a long period, Ololo was an efficient growth engine that had propelled the market and loans from banks had assisted him in that regard. “It was just a business deal gone bad because the market crashed. He has been doing it successfully for years and everybody was happier for it. Remember, he didn’t just start yesterday. If he had not cut a figure of trust, confidence and efficiency in the business, banks would not be falling over one another to entrust him with so much of people’s funds,” he quipped.

The defence may not be entirely justifiable. For when Ololo began his business of buying and selling stocks, he did it cautiously. In 2003, he borrowed N1bn from the banks. This jumped to N2bn in 2004. In 2005, his company’s exposure to the banks was N9bn and N17.7bn a year after. Falcon’s borrowing in 2007 became unbridled, jumping to N89bn. Unfortunately, the market imploded in 2008.

Falcon Securities Limited was incorporated on 1 April 1993 and registered by the SEC and the NSE as capital market operators (Issuing House and Brokers/Dealers) and financial advisory services. Its directors are Chairman of the Board, Mr. Jonathan Idudu, an Estate Valuer with a shareholding of 12,673,398 as at 31 December 2007; Brig.-General (retd.) Tunde Ogbeha (6,307,122 shares); Captain T. G. Ogisi (4,691,802 shares); Olorogun Lucky Oghene-Omoru (2,88,932 shares); Senator S. A. Otegbola (21,935674 shares); Chief Eric Nwobi (14,539,976 shares); Rear Admiral (retd.) F. O. Nesiama (5,671,996 shares); Dr. M. A. Uduebo (3,649,985 shares) and Ololo himself who has 347,114,062 direct shares and 1,444,041,278 indirect shares.

for SOURCE: Click here

wow

Wow!!!
That's all I can say.

Jesus Wept !!!!!

He is a Front. Those who read Sahara Reporters should know who he fronts for.

abhosts:

He is a Front. Those who read Sahara Reporters should know who he fronts for.

Please tell us who he fronts for and please back it up with at least a link

Is that the Ololo guy pics,he looks like OUK 

This guy owes billions, but what he doesnt know is he can offset his debt with just 100 naira!
How? Buy a strong rope. . .!

INCREDIBLE!!! What a mess. Banks collaborating with individuals to hoodwink us into buying shares.

Infact, my sympathies for those erring MDs have flown out of the window.  

Sanusi please expose them all.

~Borat~:

This guy owes billions, but what he doesnt know is he can offset his debt with just 100 naira!
How? Buy a strong rope. . .!

, oroburuku ohun erin

baba_egun:

Jesus Wept !!!!!   

JESUS were kwa akwa!!!!

This man's debt is enough to set up at least 3 banks. The drama is just unfolding.

Who Cares

Ololo and his accomplices (bank chiefs) should be taking to the guillotines

with all these billions billions Nigerians talk about one wd have thought d country was close to paradise, why wdn't ASUU and co go on strike

the fear of ololo is the beginning of prosperity,
nigerian bernie maddof

he is definitely fronting for someone
the question is who is the real masquerade
please someone should unmask the masquerade

ONLY IN 9JA, AND NA WE GO CHURCH PASS,

He no theif am now why compare him to Madoff , he's an investor meehn. Please is this how Bill Gate, Warren Buffet, Carlos and co get their money ? too much debt on their neck ? its good to be a good investor make bank dey find you to collect loan , no be small thing ooo

hmm!

poor people should start selling casket

He looks like O.L.O.L.O anyways.

poor people should start selling casket

lol. i no fit shout ooo!!

na wa ooo, N88bn,  but according to his story he's not a thief or a "madoff", cause the banks actually gave him the money to help lift their shares up, he was doing them a favour, and now he has to suffer it alone, this is not fair! 

.

I SORRY FOR NAIJA This country is nothing but a failed state
pls God heeelp us from the hand this wicked leader we have

Ololo or okokoro is a thief.

Peter Olodo. smh

what is he smiling about?

My goodness!!!!



That's a lot of money. DAYYUMM!!

I blame the stupid banks with money than sense. Did they not bother to check his credit history, and find out how many other banks he had borrowed money from, and if he had been able to pay back?!

Wow!! I don't have a degree in banking but I would have done a better job. At least some incompetent workers have been sacked.

They probably knew about his debt protfolio, but gave him the loans anyway since he always did the job of 'moving the markets' in their favour. So as the banks got greedy, he did too.