The Management of the Benue Investment and Property Company Limited (BIPC) has engaged the Nigerian Export-Import Bank (NEXIM Bank) over moves to recover and prevent the sale of Benue Hotels Limited.
The engagement formed part of efforts by the Benue State Government to protect its assets and resolve issues surrounding the hotel, which was reportedly leased to Luxurium Leisure Services in 2012. Following the lease, Luxurium Leisure Services obtained a N488 million facility and a subsequent N630 million facility from NEXIM Bank for the remodelling and development of the hotel.
Speaking during the meeting with NEXIM Bank officials, the Group Managing Director of BIPC, Dr. Raymond Asemakaha, CFA, expressed concern over the circumstances surrounding the lease agreement and the subsequent issuance of a Certificate of Occupancy to Luxurium Leisure Services. He described the process as an alleged case of administrative fraud, stressing that neither Executive Council approval nor a board resolution was obtained despite the Benue State Government’s 75 per cent majority interest in the property through BIPC, while Nigerian Hotels Limited holds the remaining 25 per cent.
The BIPC GMD further alleged that NEXIM Bank, during the loan process, failed to obtain the signatures and approvals of the property owners, as well as the requisite board resolution and search report on the collateral. He said such omissions amounted to a failure to conduct the due diligence expected in financial transactions of such magnitude.
Asemakaha stressed that the Benue State Government would not allow the property to be sold, emphasising the importance of protecting government assets for the benefit of the people of the state. He presented a four-point proposal on behalf of the state government for consideration by NEXIM Bank. The proposals included taking into account the expiration of the existing lease by next year; payment of 48 per cent of the outstanding loan to NEXIM Bank as part of efforts to recover the hotel, in view of the bank’s alleged failure to conduct adequate due diligence; and sharing the risks associated with the outstanding facility on a 50:50 basis, arguing that both parties should bear the losses arising from the transaction. The fourth proposal was for a mutually acceptable resolution that would safeguard the hotel as a state asset and bring the matter to a conclusion without its sale.
Asemakaha also raised concerns over the utilisation of the funds obtained by Luxurium Leisure Services, saying BIPC would investigate how the loan facilities were expended. According to him, information provided by the manager of Luxurium Leisure Services indicated that only one facility and a swimming pool were added to the hotel, while most of the other works undertaken were said to have amounted to minor renovations.
He reiterated the commitment of the Executive Governor of Benue State, Rev. Fr. Dr. Hyacinth Iormem Alia, to recovering government properties and ensuring that state assets are protected and utilised for the benefit of the people. He also warned individuals or organisations holding government assets to make them available for the benefit of the state.
Responding, the Chief Risk and Compliance Officer of NEXIM Bank, Umoru Gubio, said the bank would carefully consider the proposals presented by the Benue State Government and communicate its position.
The meeting was attended by the former Speaker of the Benue State House of Assembly, Rt. Hon. David Iorhemba, who was appointed receiver in respect of the hotel, alongside senior management staff of BIPC and officials of NEXIM Bank.
