N2bn Patricia customers refund: DLM officially resigns from escrow arrangement over breach of terms

DLM Trust, the escrow company named by embattled crypto company, Patricia as partner and trustee to guarantee the repayment of its customers, has dissociated itself from the crypto exchange with immediate effect. This is coming in the wake of media announcements which named the wealth management company as a strategic partner.

In a statement seen by Technext and signed by Managing Director, Mrs Ololade Razaaq, the assets company said it will no longer be the escrow company for Patricia because the crypto company falsely presented DLM Trust as a partner. In reality, the company was only acting as an escrow trust in the repayment of N2 billion withheld customer funds.

Explaining that the SEC-approved company was appointed as Escrow Trustee by Patricia to coordinate the management and disbursement of customers’ funds in Naira on October 18, Mrs Razaaq said the company was shocked that the crypto company portrayed the appointment as a ‘partnership’ as announced across various publications in the country.

On this note, DLM Trust Company is announcing its resignation as Escrow Trustee to Patricia Technologies and dissociating itself from the town hall session announcement, which Patricia has circulated through emails to customers. The town hall session themed as ‘Patricia Relaunch, DLM Partnership and All You Need to Know’, is slated to hold at 2pm on Friday, 27^th October 2023.

– the statement reads

Mrs Razaaq also clarified that the business relationship with Patricia Technologies is not a ‘partnership,’  as falsely portrayed but a mere Escrow appointment.

She clarified that DLM Trust Company, its parent company -DLM Capital Group, and seven other subsidiaries, have no affiliation with Patricia Technologies or any digital money companies, whether operating in Nigeria or offshore.

“It was our initial intention to assist thousands of Nigerians as an assigned Escrow to disburse their withheld funds with Patricia Technologies through the Naira Escrow Trust accounts; however in light of this situation, we sincerely apologize to all whose hopes were restored in anticipation of the disbursement by DLM Trust Company. We are also not liable and will not be held accountable for Patricia Technologies’s withheld funds to its customers,” the MD said.

The company further said it is an SEC-licensed trust company that prides itself in the transparent and prudent management of funds, and following certain violations by the Patricia Technologies team will no longer act as its escrow trust.

Patricia’s breach of terms

Recall that in an exclusive interview last week, Patricia CEO, Hanu Fejiro had said it was working with a SEC-licensed, third-party trustee which would ensure complete transparency in its disbursement of the N2 billion funds to customers affected. The CEO also said this would be pivotal to the company’s relaunch.

A source told Technext that the decision to dissociate from the crypto exchange was owing to a number of breaches. Leading among, as Technext understands, is the unsanctioned announcements which it says were made across media houses by Patricia.

This week, the media space was awash with news announcing DLM Trust as a partner and third-party trustee. Technext observed that some of the posts were subsequently pulled down, while paid publications with the same storyline sprung up on other platforms.

Our source claimed that the team at DLM may have believed that Patricia placed the publications.

It also seems that an Instagram post by the team at Patricia about the customer refund arrangement had a video which showed a DLM staff without the team’s consent. For context, the video was of a meeting held between both companies in a bid to fine-tune the repayment process.

Furthermore, as indicated in the official statement, DLM learned that Patricia was planning a town hall for Friday from a third party. The town hall is being probably organised to address the crypto company’s future plans and an arrangement to pay customers’ withheld funds.

DLM has since said that it wasn’t informed of this town hall and has ultimately distanced itself from it.

Not up to N2bn?

Another source, who does not want to be named, told Technext that Patricia hasn’t made plans to refund N2 billion to its customers immediately as many of the publications claim. We learnt that the sum released so far to the wealth management company is less than 5% of the total sum.

This is a far cry and means that many customers will still be left ruing their loss as it would take a lot longer period to complete the payment.

These are possible reasons the DLM may have believed that the crypto exchange may be using the escrow arrangement to better its reputation. As such, it is pulling out of the deal in a bid to preserve its reputation.

See also: CEO, Hanu Fejiro claims the company does not have a Lagos office, says Glover not affected

A bit of backstory

Patricia ran into trouble following a breach in its security sometime last year. But it remained a well-kept secret until May of this year when Technext reported the breach. The crypto exchange lost N2 billion in the process.

In a bid to salvage the situation, the company first resorted to converting the loss to debt tokens. This was greeted with a huge backlash as many users refused the measure. Recently, the company resorted to pleading with customers to convert their debts to equity as it was the last possible means they would salvage anything.

Hanu confirmed to Technext that the move is an integral component of the company’s strategy for fundraising and a bid to reorganise its debts. He also said the idea was put forward by ‘numerous users’.

“In anticipation of our upcoming relaunch and in preparation for our fundraising initiative, we are affording our users the opportunity to transform their debt tokens into convertible notes at a favourable discount in Patricia. In fact, numerous users have previously approached us with this proposal, and we are now wholeheartedly embracing it,” he said.

But with its trusted escrow partner pulling out of the deal while also revealing that the crypto exchange doesn’t have nearly enough money to pay back its debts, it remains to be seen what the coming days will yield.

Technext reported that there are plans by Patricia customers to stage a protest in Lagos.