Finance

MTN Denies Illegally Repatriating $8.1bn

Published

6 years ago

August 31, 2018

MTN Denies Illegally Repatriating $8.1bn

MTN Nigeria has denied its involvement in the alleged illegal repatriation of dividends worth $8.1bn between 2007 and 2015.

This came as the shares of MTN Group plunged by 25 per cent to a nine-year low on Thursday, a day after the Nigerian arm of the business was ordered to return the funds that the Central Bank of Nigeria said was illegally repatriated with the help of its bankers.

The telecoms company through its Public Relations Manager, Funso Aina, on Thursday, acknowledged the receipt of a letter from the CBN regarding the allegations on August 29, 2018.

The company said it only declared and paid dividends with the Certificates of Capital Importation issued by its bankers with the approval of the CBN.

“MTN Nigeria Communications Limited (MTN Nigeria) received a letter on August 29, 2018 from the CBN alleging that the CCIs issued in respect of the conversion of shareholders’ loans in MTN Nigeria to preference shares in 2007 had been improperly issued. As a consequence, they claimed the historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8.1bn needed to be refunded to the CBN,” he said.

He added, “MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to the CCIs issued by our bankers and with the approval of the CBN as required by law.”

The company said the issues regarding the CCIs were object of investigation by the Senate in 2016, adding the findings by the Committee on Banking, Insurance and other Financial Institutions indicated that it did not contravene forex laws.

MTN Nigeria stated it regretted the re-emergence of the issue, saying, “It damages investors’ confidence and, by extension, inhibits the growth and development of the Nigerian economy.”

“In September 2016, the Senate mandated the Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign Exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others.

“In its report issued in November 2017, the findings evidenced that MTN Nigeria did not collude to contravene the foreign exchange laws and there were no negative recommendations made against MTN Nigeria,” the statement said.

According to the Aina, the company is committed to good governance and will abide by the extant laws of the Federal Republic of Nigeria.

The company promised to engage with the relevant authorities, vigorously defend its position on the matter and provide further information when available.

Meanwhile, Reuters reported on Thursday that the MTN shares closed down 19.41 per cent at 86.50 rand, after touching 80.61 rand, a level last seen in 2009.

The money is more than half of the MTN’s market capitalisation, and analysts said the demand risked further undermining Nigeria’s efforts to shake off an image as a risky frontier market for international investors.

The CBN also alleged that MTN used improperly issued certificates to convert shareholders loans in its Nigerian unit to preference shares in 2007.

As a result, dividends paid by MTN Nigeria to the parent company between 2007 and 2015 – amounting to $8.1 billion – were deemed illegal, and should be returned.

This sanction on the telecommunication company with the highest market share in Nigeria came two years after MTN agreed to pay more than $1bn for three years to end a dispute in Nigeria over unregistered SIM cards.

The company also agreed to list on the Nigerian Stock Exchange, which its executives said would be concluded by the end of the year if market conditions are appropriate.

Diamond Bank Plc, in a statement signed by the Company Secretary, Uzoma Uja, said it was in touch with the CBN to ensure amicable resolution of the issue and that it would not in any way affect its banking operation.

Uja said, “We note that these foreign exchange transactions occurred between 2001 and 2006 and currently, we are cooperating with the apex regulator to ensure that this matter is resolved.

“This development does not impact your ability to continue to do business with the bank. We want to assure all stakeholders that the bank complies with all regulatory policies issued. Updates on any new development will be made available to all stakeholders.”

Stanbic IBTC Holdings Plc also said in a statement that it had been informed by its banking subsidiary – Stanbic IBTC Bank Plc − that penalties had been imposed on it by the CBN, pursuant to a review of transactions relating to the remittance of foreign exchange on the basis of certain “irregular” capital importation certificates issued to MTN Nigeria.

It said the bank was holding further engagements with the CBN in relation to the issues raised.

The Group Company Secretary, Stanbic IBTC, Chidi Okezie, assured its customers “that the above does not impact on your ability to continue to conduct your various business and corporate transactions with Stanbic IBTC Holdings or any of its subsidiaries, including the bank.”

While the Standard Chartered Bank Nigeria said “we are unable to provide additional information at this time due to our ongoing engagement with the regulator; we look forward to a rapid resolution and satisfactory outcome to this matter,” the Citi Bank declined to say anything concerning the issue.

Speaking on the development, the Head, Department of Finance, Nasarawa State University, Prof. Uche Uwaleke, said beyond the fines imposed on the affected banks, it was necessary that the Economic and Financial Crimes Commission be involved to fish out those who compromised the system to perpetrate the use of fake Certificates of Capital Importation.

This, he noted, would help to provide credible evidence that would be used to prosecute individuals or firms that aided the banks to perpetrate the illegality.

He said, “By sanctioning the affected banks, the CBN has demonstrated that the country’s financial markets have laws which must be complied with by all participants. The scale of the infraction could not have been possible without collaborators both from within the deposit banks and the CBN.

“So, beyond the fines imposed on the banks, it is vital that the EFCC is involved to fish out the culprits with a view to prosecuting individuals or professional services firms that aided these banks to perpetrate the use of fake Certificates of Capital Importation, fraudulent conversion of investors’ loans to preference shares and rendering false returns to the CBN.”

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Banking Sector

UBA Grows Interest Income Jump by 169% to N1.799 Trillion

Published

2 days ago

October 21, 2024

Samed Olukoya

United Bank for Africa, Nigeria’s leading financial institution with operations across the African continent, on Monday reported a 169.9% jump in interest income from N666.291 billion recorded in the first nine months of 2023 to N1.799 trillion in the nine months through September 2024.

In the financial statement obtained by Investors King, the lender’s interest expense inched slightly higher to N695.571 billion, 211.6% from N223.209 billion filed in the corresponding period of 2023.

Growth was broad-based as net interest income rose by 149% from N443.082 billion in 2023 to N1.103 trillion in 2024 while net fee and commission income stood at N233.853 billion, up 105% from N114.286 billion in 2023.

The bank’s total non-interest income moderated slightly to N435.840 billion. However, operating income improved by 51.25% from N1.017 trillion to N1.539 trillion.

Similarly, net operating income after impairment loss on loans and receivables appreciated 62.16% to N1.416 trillion.

Profit before tax rose by N101.392 billion to N603.483 billion in September 2024.

Speaking on the strong performance of the company in the first half (H1) of the year, Oliver Alawuba, the Group Managing Director/CEO said as of H1 2024, which constitutes the majority of the current performance, the economic environment remained challenging across the regions where we operate.

High inflation, rising debt levels, increasing interest rates, and tighter monetary policies have created significant pressure on economies globally. Despite these headwinds, our Bank has demonstrated resilience.

In H1 2024, UBA Group delivered strong double-digit growth across high-quality and sustainable revenue streams. This performance reflects our disciplined execution of strategic goals, focusing on balance sheet expansion, transaction banking, and digital banking businesses across our markets.

Profit before Tax: We achieved a robust Profit Before Tax of N401.6 billion, reflecting our ability to manage risks effectively amidst macroeconomic volatility.
Customer Deposits: Our deposits grew by 34%, from N17.4 trillion at year-end 2023 to 2 trillion in H1 2024, demonstrating the trust and loyalty of our customers.
Total Assets: We saw a 37% growth in total assets, reaching N28.3 trillion, up from N20.7 trillion at FYE 2023. This growth was driven by strong customer relationships and our ability to capitalize on opportunities across geographies.
Net Interest Income: Our intermediation business posted impressive growth, with net interest income expanding by 143% year-on-year to N675 billion, further underlining the strength of our core banking operations.
Digital Banking & Payments: Digital Banking income surged by 107.8% YoY to N106 billion, while funds transfer and remittance fees rose 188.7% and 228%, respectively. We continue to lead in digital banking and payment solutions, helping drive financial inclusion across Africa.
Trade Facilitation: Income from trade transactions grew 83% to N18 billion as we strengthened our role in facilitating intra-regional and international trade.

Our strategy of investing in technology, innovation, and data analytics continues to yield significant returns, positioning us as a leader in digital transformation.

Finance

FAAC Distributes N1.298trn to FG, States, LGCs

Published

5 days ago

October 18, 2024

Iyanuoluwa Martins

The Federal Accounts Allocation Committee (FAAC) has shared N1.298 trillion among the Federal Government, states, and Local Government Councils (LGCs) from the revenue of September 2024.

A communique issued at the end of FAAC meeting for October held on Thursday in Abuja said N1.298 trillion total distributable revenue comprised distributable statutory revenue of N124.716 billion, and distributable Value Added Tax (VAT) revenue of N543.518 billion.

It also comprised Electronic Money Transfer Levy (EMTL) revenue of N18. 445 billion, Exchange Difference revenue of N462.191 billion and Augmentation of N150.000 billion.

It said that a total revenue of N2.258 trillion was available in the month of September.

“Total deduction for cost of collection was N80.993 billion, while total transfers, interventions and refunds was N878.946 billion,” it said.

According to the communiqué, gross statutory revenue of N1.043 trillion was received in September 2024, which was lower than the sum of N1.221 trillion received in August by N177.426 billion.

It said that gross revenue of N583.675 billion was available from VAT in September, higher than the N573.341 billion available in the month of August by N10.334 billion.

“From the N1.298 trillion total distributable revenue, the Federal Government received a total sum of N424.867 billion, and the state governments received a total sum of N453.724 billion.

“The LGCs received a total sum of N329.864 billion and a total sum of N90.415 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue,” it said.

On the N124.716 billion statutory revenue, the communiqué said that the Federal Government received N43.037 billion and the state governments received N21.829 billion, while the LGCs received N16.829 billion.

It said that the sum of N43.021 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue.

“From the N543.518 billion VAT revenue, the Federal Government received N81.528 billion, the state governments received N271.759 billion and the LGCs received N190.231 billion,” it said.

It said that in September, Oil and Gas Royalty, Excise Duty, EMTL and CET Levies increased considerably while VAT and Import Duty increased marginally.

It added that Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and others recorded significant decreases.

Finance

Former AGF, EFCC Opt For Plea Bargain Settlement in Alleged N1.6bn Fraud Case

Published

1 week ago

October 15, 2024

Ugwoke Ogbodo

The Economic and Financial Crimes Commission (EFCC) has informed a Federal High Court sitting in Abuja of its plan to settle out of court in a subsisting N1.6 billion fraud matter against a former acting Accountant-General of the Federation (AGF), Anamekwe Nwabuoku, pending before the court.

Counsel to the anti-graft body, Ogechi Ujam, informed the presiding judge, Justice James Omotosho upon resumed hearing on Monday of its resolve to opt for plea bargain agreement with the defendant.

When the matter was called, Ujam told the court that on the last adjourned date, Nwabuoku and his co-defendant, Felix Nweke, had submitted proposal for settlement out of court.

She said the parties in the charge had agreed and that the agreement had been submitted to the EFCC’s Chairman, Ola Olukoyede, for approval.

The lawyer to the EFCC then asked the court for a date to file the agency’s plea bargain agreement and amend the charge of the defendants.

In the same vein, Nwabuoku’s lawyer, Isidal Udenko, and Emeka Onyeaka, who represented Nweke, also admitted opting for a plea bargain.

Justice Omotosho subsequently adjourned the matter till December 2 for the adoption of a plea bargain agreement.

Recall that the anti-graft agency had preferred an 11-count money laundering charge against the duo.

Nwabuoku and Nweke, a former Deputy Director in the Ministry of Defence, are being prosecuted for alleged money laundering offences to the tune of N1.6 billion.

While Nwabuoku is the 1st defendant in the charge marked: FHC/ABJ/CR/240/24 dated May 20 and filed May 27 by Ekele Iheanacho, Nweke is the 2nd defendant.