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BVN: Banks Frustrating Anti-corruption War, FG, AGF Tell Court

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  • BVN: Banks Frustrating Anti-corruption War, FG, AGF Tell Court

The Federal Government and the Attorney General of the Federation, Mr. Abubakar Malami (SAN), have alleged that the opposition of the 19 commercial banks to an order of the Federal High Court in Abuja on the Bank Verification Number is a sign that the banks are working against the anti-corruption policy of the current administration.

The court last month ordered the banks to freeze all accounts without Bank Verification Number.

The government and the minister made the allegation in their response to an application by the banks challenging the jurisdiction of the court to make the freezing order of October 17, 2017.

The government stated in its response to the banks’ application that the banks also refused to comply with the court order directing them to disclose the accounts in their custody without BVN.

A counter-affidavit deposed to by Usman Dakas, on behalf of the Federal Government and the AGF, stated, “The applicants (the banks) do not wish to comply with the interim order of this court and disclose the accounts without BVN and their holders in order to frustrate the plaintiffs’ anti-corruption policies that would benefit the entire nation.”

The government’s lawyer, Mr. Danjuma Tyoden, also canvassed similar argument in his written address filed along with the counter-affidavit.

He argued that the banks were not only frustrating government’s constitutional responsibility to abolish corrupt practices, but were also opposing the court’s order so that they could continue to keep the funds in the accounts without BVN, trade with funds and at the end declare fat profits for their various shareholders.

Tyoden stated, “The applicants have filed this motion to frustrate the plaintiffs’ constitutional responsibility to ‘abolish corrupt practices’ and the clear directives and regulations of the Central Bank of Nigeria on the BVN scheme so that they can continue to keep the funds in the accounts BVN and be trading with and declaring fat profits for their various shareholders.

“Is it not worrisome that, while the banks are happy not to allow the customers, whose accounts are not covered by BVN, to operate the said accounts, yet they want the interim order of this court, directing them to disclose these accounts and their holders, dismissed and or struck out?”

The government also argued that the banks refused to comply with the court order directing them to furnish the court with details of accounts without BVN in their custody because if done, the suspicion against them would be proved.

The government’s paper stated in part, “We submit that the refusal of defendants/applicants (the banks) to furnish the plaintiffs with the facts relating to the accounts in their custody without BVN is because, if produced, the suspicion of the plaintiffs would be proved.

“In fact, if the defendants/applicants have nothing to hide, why are they refusing to file the affidavit of disclosure as ordered by this court?

“The funds in the accounts not covered by BVN is not their (banks’) property, why are they now scared of forfeiture and crying more than the bereaved, when the law allows opportunity to be given to the account holders to show cause after publication, before a final forfeiture order is made?”

The government also maintained that it was the customers who owned the funds in the accounts without BVN that ought to complain and not the banks.

It wondered that banks which admitted that they had the responsibility to enforce the due diligence and Know Your Customer provisions of the Money Laundering Act were now, by their application, seeking to shield their customers and doing their case for them.

The government’s court paper stated, “It is ironical that they (the banks) are fighting the order of the court asking them to disclose accounts without BVN. Does it lie in their mouth to defend customers, who are in violation of the CBN regulation that constitute part of the due diligence and know your customer requirement of the MLA.

“Indeed, banks occupy a position of trust and must act in the overriding interest of the public where and when necessary in the fight against crime, expose people with dual personality and must not benefit from willful complicity, given that the person, who steals is just as guilty as the one, who keeps the stolen funds.”

The government also faulted the banks’ contention that the government’s suit filed under Section 17(1) of the Advance Fee Fraud Act could only be prosecuted by the Economic and Financial Crimes Commission.

The AGF and the Federal Government argued that the law did not bar them and other government agencies, taxed with the responsibility of fighting corruption, from suing under the said law.

Justice Nnamdi Dimgba had, on October 17, 2017, upon an ex parte application by the AGF and the Federal Government, ordered the CBN and the 19 commercial banks in the country to disclose all accounts without BVN in their custody and the balances in such accounts.

The court, among others, ordered the banks to disclose the details of all such accounts, their owners and their proceeds in their affidavit of compliance deposed to by their Chief Compliance Officers.

It also made an interim order directing the banks to freeze all the said accounts by stopping “all outward payments, operations or transactions” pending the hearing of the substantive application seeking the forfeiture of the balances on the accounts to the Federal Government.

The court also directed the CBN and the Nigeria Interbank Settlement Systems “to validate the information contained in the affidavit of compliance/disclosure filed by the respective 19 banks” within seven days from the date of service of the orders on them.

It also, among others, ordered the banks to advertise the accounts without BVN in a widely circulated national newspaper as notice to those who might have any interest in any of the accounts.

But instead of complying with the court order specifically directed at them, the banks chose filed a notice of objection, querying the competence of the suit, the court order itself and the court’s jurisdiction to hear and determine the suit.

The banks, through the joint application filed by their lawyers, who are Senior Advocates of Nigeria, Messrs Paul Usoro, Babatunde Fagbohunlu and Adeniyi Adegbonmire, asked the court to decline jurisdiction to entertain the suit, dismiss it and set aside the order made on October 17.

Justice Dimga, during the last proceedings on November 15 modified its orders made on October 17.

Following a compromise reached between the lawyers to the Federal Government and 19 commercial banks during the proceedings, the judge “revised” the earlier ruling by directing banks to immediately unfreeze accounts that had since been linked to a BVN after the orders were made.

The judge also revoked the order number 5 in the ruling, which had directed an interim forfeiture of the proceeds in all the accounts without BVN pending the determination of the substantive suit.

The applicants in the suit marked FHC/ABJ/CS/911/16 – the Federal Republic of Nigeria and the Attorney General of the Federation and Minister of Justice, Mr. Abuakar Malami (SAN) – were represented during the proceedings by Mr. Joseph Tobi, while the 19 commercial banks, were represented by Mr. Adeniyi Adegbonmire (SAN).

Only the Central Bank of Nigeria (the 20th respondent in the suit) was not represented by a lawyer during the Wednesday’s proceedings.

Justice Dimbga adjourned until December 11 for the hearing of all pending applications.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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