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We act as Solicitors to High Chief O.B. Lulu-Briggs OON, DCF (our Client) and we have his instructions to respond to the Central Bank of Nigeria (CBN) publication in which his name is included as “the majority shareholder/director” in respect of a loan granted to MTS First Wireless Limited (MTS) by Union Bank Plc (the Bank).

Our Client firmly and unequivocally denies any involvement whatsoever in the grant, issuance, disbursement or application of this loan either as a director, shareholder or majority shareholder of MTS. He therefore views the prominent display of his name with respect to this loan either as a grave error of judgment or a mischievous and malicious attempt by the Bank to impugn his well earned reputation and reduce the esteem in which he is held in the society. He has therefore instructed us to set the records straight and state the true and correct state of affairs in order to clear his name and preserve his hard earned reputation.

A summary of the clear and incontrovertible facts with regard to this transaction are as follows:

MTS has not borrowed any money whatsoever, not ONE KOBO from any bank or other financial institution in Nigeria or elsewhere since our Client became a shareholder/director in 2006.

The loan facility for which the CBN publication listed MTS as a debtor customer of the Bank was obtained, secured, disbursed and expended by MTS in 2003, three years before our Client became a shareholder/director of MTS in 2006. He was neither a shareholder nor director of MTS when it obtained and disbursed the loan together with officials of the Bank and as such cannot be personally liable in any manner whatsoever.

The loan was already delinquent before our Client became involved with MTS. The directors/shareholders at the time provided personal guarantees and pledged properties to secure the loan. The Bank, rather than take steps to enforce the payment of the loan, was complicit in making false representations to unsuspecting investors such as our Client. It is this deception that the Bank seeks to perpetuate by inserting our Clients’ name in respect of this loan for which he provided no personal guarantees (since he was not there at the time) and therefore has no personal liability.

Our Client is neither the Chairman of the Board, the Managing Director or an Executive Director of the company and is definitely not the majority shareholder of MTS as wrongly alleged. His involvement in MTS has been as an “angel investor” and a creditor to the company. He has performed his duties as director of MTS in good faith and exercised the requisite amount of care, skill and diligence as the records will clearly show.

Since our Client became involved with MTS in 2006, he has not received any dividend payment or obtained any other benefit whatsoever for his substantial investments and good faith effort to turn the company around. He remains a creditor of MTS and is as keen as other creditors to recover his advances to MTS. To suggest that he obtained a loan from Union Bank through MTS as has been widely reported is most unfair and seeks to turn the truth on its head. It is a wicked allegation that has no basis whatsoever and our Client intends to vigorously defend his hard earned reputation.

It is a matter of record that MTS obtained a loan in the sum of US$14.5 million from the Bank in February 2003 to finance the CDMA turnkey contract with China Putian. The facility was secured with the personal properties of the founders/shareholders and directors of MTS at the time (with a total value of NGN682.5 million).

In the same year (2003), the company obtained a revolving credit facility of NGN500 million from the Bank for the importation of CDMA telephones. The facility had a 90-day tenure and was secured by a lien over the goods to be imported.

Having obtained these loans in addition to loans from other banks between 2001-2003, MTS was still unable to commence operations due to its numerous operational and financial challenges. It would appear that having completely disbursed the loans, the banks became uneasy about their exposure and refused to make any further advances towards operational expenses. In the meantime, interest and other charges continued to accrue on these facilities which the bankers had disbursed and applied in collaboration with the management/owners of MTS at the time. Indeed, the loan never performed according to its tenure.

This was the state of affairs in MTS when the Managing Director of one of the banks in the consortium of lenders, Equity Bank Limited (as it then was) approached our Client to provide the capital required for the company’s operational expenses to enable it launch and commence operations. Equity Bank and the management of MTS made representations to our Client that his investment would be used solely for the operational expenses and it will be treated as a convertible instrument. The Information Memorandum containing the various representations is a matter of record; including the non-disclosure of these delinquent loans to our Client at the time.

Our Client was therefore brought in as an “angel investor” sometime in 2006 and he made a substantial investment in a convertible instrument through Equity Bank in the hope that it would change the fortunes of MTS for the better.

Our Clients’ investment was eventually converted into equity sometime in 2006 and he was issued Ordinary shares in the capital of MTS amounting to circa 10% of its issued capital. Based on this holding, it is clear that our Client is not the majority shareholder of MTS. The shareholders and directors of MTS who were involved in obtaining and expending this and other loans are still active in MTS as any investigation at the Corporate Affairs Commission will reveal.

Despite this investment, MTS remained technically insolvent and our Client was approached yet again and representations were made to him to make further investments in order to preserve his earlier investment and save MTS.

Based on these representations, our Client made a further substantial investment in the ARM Convertible Instrument (an investment coupon issued on behalf of MTS by the Asset and Resource Management Company Limited).

Despite this additional investment, MTS did not recover. Consequently, a decision was taken by the Board in 2007 (with the active participation of the Bank) to appoint an international financial adviser to help secure a strategic investor with the requisite financial and managerial expertise to operate MTS. The Advisor thus appointed informed the Board that MTS’ past due obligations to the Nigerian Communications Commission (NCC) were endangering its main asset – the licenses/frequencies/spectrum and requested that MTS meet these obligations before it proceeded to invite strategic investors. Our Client was once again approached and he provided a further loan in 2008 to MTS to meet its past due obligations and ensure the integrity of its licenses. This further put our Client in the position of a creditor to MTS.

Since our Client became involved with MTS, the founders/shareholders and directors who obtained, disbursed and completely expended this loan have not to his knowledge, made any financial investment or contribution to MTS. Our Client affirms that the senior management of Union Bank who were at all material times actively involved in the disbursement of these loans are aware of this fact as the records will show.

We believe that as a regulator, the focus of the Central Bank of Nigeria should be on the management of the Bank and the directors of MTS at the time the loan was obtained, disbursed and expended.

For Union Bank to seek to hold a model citizen who was not only a victim of its chicanery but was at the time the loan was disbursed, expended and became delinquent not involved in any way with MTS personally liable, is rather disingenuous. It is a position that is not supported by our laws, a fact that could not have been lost on the Bank.

Premised on the very clear and incontrovertible facts of this matter, we have our Clients’ firm instructions to take every lawful step in ensuring that his name is removed forthwith from the column indicating the MTS debt to Union Bank. We expect that Union Bank would do the honorable thing by circulating a suitably worded apology in the same manner and with similar prominence as the offensive document.