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Grant Properties Ltd’s Land Transparently Sold—Sterling Bank

By Dipo Olowookere

Sterling Bank Plc has denied accusations that it illegally sold to its former non-executive director, Mr Yemi Idowu, 10-hectares from the 50-hectare land used as collateral by Grant Properties Limited to obtain an N8 billion syndicated loan-financing.

Sterling Bank was the lead lender in the N8 billion syndicated loan-financing transaction involving three other banks.

Grant Properties Limited, a property development company, is owned by one Chief Olajide Awosedo.

Sterling Bank was accused of cornering the piece of land and sold it to Mr Idowu as a very ridiculous price.

But refuting the allegations, Sterling Bank said, “It is not true that 10 hectares of land was sold to Mr Yemi Idowu.”

It explained that, “The 10 hectares was sold to a company known as the Real Estate Development (RED) Company Limited and the decision to sell the 10 hectares was a joint decision between the consortium of banks (Wema, Skye, Unity & Sterling) and the developer (Grant Properties/Chief Olajide Awosedo) as the proceeds of sale was to be used to refund subscribers of Phase 2 of the project who had become restive due to the failure of the developer to commence work on the project (deliver various housing units with deposit from subscribers in excess of N2.1 billion).

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“Sterling Bank could not have singlehandedly sold any part of the land as the security was pledged to the banking consortium that financed the project.

“It is instructive to note that the proceeds of sale of the 10 hectares was passed to Grant Properties/Chief Awosedo for onward transmission to the subscribers that had demanded for a refund.”

The bank also explained that the claim by Grant Properties Limited that a court ruling pronounced the land sale illegal was also not true.

According to Sterling Bank, “It is not true that that the Court pronounced the sale as illegal. The Court Ruling related to only 2.4 hectares out of the 10 hectares which the RED Company subsequently sold to UAC Property Development Company (UPDC) and this is now subject of an Appeal at the Court of Appeal Lagos.

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“The Court did not void the sale of the 10 hectares to RED Company and there is no Order of Court that the 10 hectares be returned to the Grant Properties.”

On why Sterling Bank allegedly took out 10 hectares of the loan security for sale, the lender said, “We reiterate that Sterling Bank did not convert or single handedly sell the 10 hectares of land to any insider or third party. The sale of the 10 hectares was done by the consortium of Banks with the consent of Grant Properties/Chief Awosedo.”

It reiterated that the 10 hectares had been sold before the transfer of loan to Assets Management Company of Nigeria (AMCON) and therefore did not form part of the assets transferred to AMCON by the Consortium of Banks.

On what happens to the proceeds from the sales, Sterling Bank said, “The said proceeds were passed to Grant Properties/Chief Awosedo for onward transmission to settle subscribers to a housing project it halted before the AMCON take-over of the bad loan incurred from the banks/Grant Properties transaction. Despite the AMCON window, the consortium had to write off approximately N3billion from upon the sale of the bad loan to AMCON.”

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The business deal started in 2002 when Grant Properties secured a 50-hectare land in Lekki, Lagos state, to build “Victory Park Estate”.

It approached the legacy banks of Unity Bank, Skye Bank, Wema Bank and Sterling Bank for an N8 billion ongoing loan to partly fund the project (to fund the purchase, sand filling and development of the land as site & Services for sale.

NAL merchant, the legacy bank of Sterling was the lead of the consortium. Grant Properties transferred the shares in its subsidiary, Knight Rook Limited, to the banks as security for the loan having purchased the Asset fully with bank loan.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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