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Seven Banks ‘Hide N249.6b for Unknown Govt Officials’

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  • Seven Banks ‘Hide N249.6b for Unknown Govt Officials’

A Federal High Court in Lagos yesterday ordered seven banks to remit to the Federal Government $793,200,000 (about N249,659,700,000.00) allegedly hidden with them in breach of the Treasury Single Account (TSA) policy.

A vacation judge, Justice Chuka Obiozor, made the interim order following an ex parte application by the office of the Attorney-General of the Federation (AGF).

The judge warned that the remittance order would be made permanent on August 8, unless cause was shown why it should not.

The AGF, through his counsel, Prof. Yemi Akinseye-George (SAN), accused the commercial banks of illegally keeping the sums in their custody for “unknown government officials”.

Justice Obiozor ordered the banks to remit the money to the designated Federal Government’s Asset Recovery dollars account domiciled with the Central Bank of Nigeria (CBN).

The banks are United Bank for Africa (UBA), Diamond Bank Plc, Skye Bank Plc, First Bank Limited, Fidelity Bank Plc, Keystone Bank Limited and Sterling Bank Plc.

According to court processes filed by Akinseye-George (SAN), $367.4m was hidden by three government agencies in UBA; $41m was kept in a National Petroleum Investment Management Services (NAPIMS) fixed deposit account with Skye Bank.

The documents stated that $277.9m was in Diamond Bank, $18.9m in First Bank, $24.5m in Fidelity Bank, $17m in Keystone Bank, and $46.5m in Sterling Bank.

The AGF’s application was supported by a 15-paragraph affidavit deposed to by a lawyer from Akinseye-George’s law firm, Vincent Adodo.

Adodo averred that the banks colluded with Federal Government officials to hide the funds in breach of the TSA policy.

The funds, he stated, were revenues, donations, transfers, refunds, grants, taxes, fees, dues, tariffs etc accruable to the Federal Government from ministries, departments, parastatals and agencies.

Adodo said the banks failed to remit the funds to the TSA domiciled in the CBN in violation of the guidelines issued by the Accountant-General of the Federation, which fixed September 15, 2015 as the deadline for such funds to be moved.

“The 1st to 7th respondents (banks), in collaboration with and/or collusion with unknown officials of the Federal Government, conspired to disobey the relevant constitutional provisions, thereby depriving the Government of the Federal Republic of Nigeria of funds belonging to it, which are needed urgently to fund pressing national projects under the 2017 budget,” Adodo said.

Among the allegedly culpable government agencies is the National Petroleum Developing Company (NPDC).

Moving the ex parte application yesterday, Akinseye-George said it would best serve the interest of justice for Justice Obiozor to order the banks to remit the funds to the Federal Government, to prevent the funds from being moved or dissipated.

“The withheld funds are urgently required for the implementation of the 2017 budget. The budget has a lifespan of 12 months and we are already in the middle of the year.

“By hiding these hidden funds, the Federal Government is being forced to borrow money from these commercial banks at exorbitant interest rates,” Akinseye-George added.

After listening to the SAN, Justice Obiozor granted the interim orders.

He directed that the order should be published in a national daily newspaper.

The judge adjourned till August 8 “for anyone interested in the funds to appear” before him “to show cause why the interim orders should not be made permanent”.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Finance

ARISE IIP and Africa Finance Corporation Launch US$ 100M Capital Pool for African Entrepreneurs

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ARISE IIP, the pan-African developer and operator of world-class industrial parks, and Africa Finance Corporation (AFC), the leading infrastructure solutions provider in Africa, today announced the signing of a Memorandum of Understanding to establish a dedicated US $100 million capital pool for African entrepreneurs who are establishing operations within any of the Arise IIP Special Economic Zones (SEZ) in Africa. 

At the heart of this partnership is a shared vision to uplift African entrepreneurs by providing them with much needed financing and advisory services to catalyse growth.

AFC will also actively seek financing from Export Credit Agencies (ECAs), local and regional financial institutions to mobilise funding to support these companies.

This concerted effort underscores ARISE IIP and AFC’s commitment to fostering industrialisation, job creation and economic prosperity in Africa.

Under this partnership, AFC’s comprehensive suite of financial services will extend beyond financing to include financial advisory support for corporate finance, equipment financing and market entry including assisting with joint ventures and technical partnerships for sponsors that may require it, to ensure they are well-equipped to seize opportunities and thrive within the SEZs.

By tapping into AFC’s extensive network and expertise, ARISE IIP aims to cultivate a vibrant ecosystem that nurtures entrepreneurship and drives sustainable economic development across the continent.

Gagan Gupta, CEO of ARISE IIP said about this partnership: “ARISE IIP is about empowerment. By empowering our customers, and ensuring they have the robust financial support needed to meet their operational objectives, this collaboration with Africa Finance Corporation, our long-lasting partner, takes us one step closer to realising our vision of an industrialised and prosperous Africa.

Samaila Zubairu, President & CEO of AFC said: This partnership marks a significant milestone in our commitment to offer strategic financial advisory and corporate finance services to firms focused on value capture and import substitution projects in Africa. By collaborating with our investee company Arise IIP and African entrepreneurs in our Special Economic Zones, we aim to foster an ecosystem that will increase trade, create jobs, and drive economic advancement on the continent.

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United Capital Plc Reports Stellar Growth with 65% Profit Increase, Announces Dividends

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United Capital Plc (NGX: UCAP) has unveiled its unaudited financial results for the period ending June 30, 2024.

The company reported a 38% increase in gross earnings year-on-year to N15.15 billion. Profit before tax soared by 63% to N9.06 billion while profit after tax surged by 65% to N7.74 billion.

Total assets rose by 27% in the first half to N1.19 trillion, and shareholders’ funds increased by 33% to N120.34 billion.

These robust results have prompted United Capital to declare an interim dividend of N0.90 per 50 kobo ordinary share, alongside a generous bonus share offering of “2 for 1.”

Peter Ashade, Group CEO, expressed satisfaction with the strong financial outcomes, highlighting the company’s commitment to creating wealth and delivering superior value to shareholders.

“This marks a historic moment with our first-ever interim dividend and bonus share announcement, demonstrating our dedication to stakeholder value,” Ashade stated.

The company remains confident about sustaining its growth trajectory throughout 2024, bolstered by nearly N1.3 trillion in funds under management.

United Capital continues to prioritize activities that enhance and preserve value for stakeholders, maintaining its competitive edge and profitability.

With a focus on trusts, mutual funds, and professionally managed investments, the group is strategically positioned to achieve its growth objectives, ensuring sustainable returns for all involved.

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Banking Sector

Nigeria Plans 50% Windfall Tax on Banks’ Currency Profits

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Nigerian President Bola Tinubu has announced a one-time 50% tax on windfall profits that banks reaped from currency gains following last year’s naira devaluation.

This decision was part of the government’s strategy to navigate the ongoing cost-of-living crisis.

The naira, which has depreciated by about 70% against the dollar since foreign exchange rules were relaxed in June 2023, allowed banks holding dollar assets to significantly boost their income.

However, the Central Bank of Nigeria had advised lenders to retain these profits as a buffer against potential future losses.

The proposed tax will apply to the 2023 financial year, with non-compliance resulting in hefty fines.

The move has already impacted the NGX Banking Index, which fell by 1.3% as of midday trading in Lagos. Notable declines were seen in FBN Holdings Plc and Zenith Bank Plc, dropping 3.2% and 2.5% respectively.

This initiative mirrors similar actions in Europe, where countries like Italy and Hungary have imposed taxes on banks to address what they view as excessive profits during periods of high inflation and interest rates.

European banks have criticized these measures, warning of potential impacts on economic growth due to constrained lending capabilities.

President Tinubu’s administration believes this tax will help manage Nigeria’s fiscal challenges while addressing social needs.

Lawmakers are expected to support the measure, alongside a proposal to increase government spending by 6.2 trillion naira ($3.8 billion).

While banks have benefited from currency revaluations, many customers, particularly manufacturers with dollar-denominated loans, faced significant losses as they struggled with the weaker naira.

The new tax policy highlights the government’s broader efforts to stabilize the economy and attract foreign investment, aiming to ensure a more equitable distribution of financial gains.

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