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How MTN, Four Banks Perpetrated $8.13 Illegal Deal, by CBN

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  • How MTN, Four Banks Perpetrated $8.13 Illegal Deal, by CBN

The Central Bank of Nigeria (CBN), yesterday, gave details of how MTN Nigeria Limited and four banks perpetrated the $8.13 billion illegal transactions, using false information and deliberate disregard for the rules.

The details, which were contained in a CBN’s letter to the organisations involved in the saga, became necessary following denial of culpability in the illegality that has been described as a crime against the country.

The apex bank said the first error was when the Certificate of Capital Importation (CCIs) at the time of investment by MTN Nigeria showed $59.436 million as shareholders’ loan and $343.153 million as equity, but turned to $399.594 million as shareholders’ loan and $2.996 million as equity investment as at December 2007.

This position was, however, contrary to the CCIs issued by Standard Chartered Bank Limited, Citi Bank and Diamond Bank, which constituted a rendition of false returns to the CBN.

According to the statement signed by the CBN Governor Godwin Emefiele, when Standard Chartered Bank Limited subsequently applied on behalf of MTN Nigeria for the conversion of the shareholder’s loan to preference shares, it did not wait for any board resolution or submit documentary evidence of the resolution to CBN before it hurriedly issued new CCIs in support of the illegal conversion of the shareholders’ loan to preference shares.

On December 10, 2009, Standard Chartered Bank Limited admitted its decision as error in a letter to the apex bank, in which it described the act as an “unintended omission.”

It was disclosed that the bank also issued three CCIs outside the regulatory 24 hours, without the approval of the CBN; failed to issue a procedural letter of indemnity to the CBN against double remittance; and aided the illegal repatriation of $3.448 billion, which it has now been ordered to refund to the CBN with immediate effect.

Stanbic IBTC Bank also reported 35 CCIs valued $313.683 million inappropriately as “other purchases” in a document to CBN in February 2008, instead of “capital importation”.

The bank also issued eight CCIs of $58.359 million in respect of foreign exchange sourced locally, as shareholders’ loan, violating the rule which stipulates that CCIs should only be issued on capital imported.

Like Standard Chartered Bank, it also issued eight CCIs for capital inflows in form of machinery outside the 24 hours regulatory requirement of receipt of shipping documents, as well as that of letter of indemnity to the CBN against double remittance in respect of 20 CCIs transferred.

In all, Stanbic IBTC Bank caused $2.632 billion to be repatriated on the basis of the illegally issued CCIs, hence it was ordered to refund the amount to CBN with immediate effect.

But a source at Stanbic Bank told said that sequel to the order by the CBN to pay a fine and refund the illegally repatriated funds, engagements with the regulator to restate the bank’s sides of the matter have begun.

According to the source, the bank said that the engagement had become necessary as they still claim that the apex bank vetted and approved the transactions in question.

For Diamond Bank, it remitted $348.914 million as dividend to MTN Nigeria offshore corporate shareholders without any documentary evidence of the audited account of the company to justify the basis of the payment of the dividend declared and paid.
This action is a violation of the provision of Memorandum 24(4)(b) of the Foreign Exchange Manual.

It also issued three CCIs outside the regulatory 24 hours, without the approval of the CBN, and illegally remitted $352.222 million on behalf of Standard Chartered Bank and Stanbic IBTC.

Citibank Nigeria Limited followed the bandwagon, as four of the CCIs it issued, which evidenced the inflow of capital imported as cash, were outside the period of 24 hours allowed by regulation upon the receipt of inflow.

The bank also failed to comply with extant regulations on the issuance of letter of indemnity to the CBN in addition to forwarding the transaction history of the CCIs to the apex bank. CBN said the bank purchased $535 million on the basis of photocopies of a document bearing the name of Standard Chartered Bank as the applicant bank and the referenced CCIs.

In all, about $1.766 billion was repatriated by the bank on the basis of the illegally issued CCIs, which should be refunded to the coffers of the CBN with immediate effect.

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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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Access bank

Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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