Afribank: New Directors accused of financial recklessness

Replace all tellers in the bank with OND holders
There is a growing groundswell of ill-sentiments among members of staff of Afribank Plc against the Central Bank of Nigeria’s appointed management team of the bank. The staff, across ranking strata, have accused the Managing Director of the bank, Mr. Nebolisa Arah and other Executive Directors of going on a spending spree when their primary task in the bank, predicated on the CBN intervention was that of recovery.

 Aggrieved staff of the bank protested that despite the parlous state of the liquidity position of the bank, as painted by the management team, the Managing Director and his Executive Directors decided to grant to themselves, loans of up to N25million to purchase vehicles for their personal official use.

“This is simply ruinous, I must tell you,” one of the bank’s senior staff said. “These people were appointed to lead the recovery effort of the bank and that supposes cost saving and limitation on expenditure.

“You can imagine how we felt when we got to know that the directors have approved for themselves the sum of N25million each to purchase official vehicle. Is this supposed to be cost cutting or sheer wastefulness? Of course, we are aware that when the erstwhile directors were sacked, they were not allowed to go away with their official cars. We expected that in the spirit of the time, the directors appointed by the CBN to manage the bank as a recovery team, would make do with the vehicles they inherited from the former management team, you can imagine the cost to the bank if you multiply N25million with the number of the Executive Directors and the managing director. 

Other consideration for the aggravation of the bitter sentiment pervading the baking halls of Afribank Plc has to do with the retrenchment and recruitment tactics of the management team. A bank insider told Fortune&Class Weekly of how the new management team forces old staff of the bank through the front doors of the bank only to replace them by favoured people, who are connected to individual Executive Directors.

“Seriously, this is scandalous,” the insider asserted. “Most staff members had prepared for the worst when the CBN appointed directors were inaugurated in the bank. We knew there would be sweeping reforms and most of all staff would have to go. But most of us get scandalized that rather than use the staff strength down-sizing as a cost saving measure, this management team simply turned it to opportunity to provide employment for their cronies. Those of us that were booted out through the front door were replaced by their cronies through the back door, so the question is: What do the supposed cost saving measures, implemented by the bank’s management, intend to achieve?

“Now, why are they halving our salaries and at the same time recruiting new people. It is scandalous,” the insider said.

Describing the general state of anxiety among the mainstream staff of the bank, another insider confided that as things stand, those working as tellers in the bank are, more or less, existing within the bank’s structure on tenterhooks.

“We learnt that the management team has decided to replace all tellers in the bank with OND holders, we are only waiting for when the sack letters would be distributed.”

Afribank Plc was one of the first set of five banks seized by the CBN for failing to satisfy the apex bank indices for capital adequacy, risk management, liquidity and good governance, on 14 August, 2009.

Our effort to talk with the spokesperson of the bank, Mr. Mosshod was unsuccessful because his phone was switched off all through last Friday.

WHAT CBN DISCOVERED AT ETB

How Adenuga launders IBB’s money through his bank

Perhaps the most persistent subject of suspicion in the Nigerian public space has been the nature of the business relationship between Otunba Mike Adenuga and General Ibrahim Babangida (rtd).

Adenuga owns and directly controls a massive business empire that includes Globacom, ETB, ConOil and several well heeled concerns. Ever since the 1990s when Adenuga started grabbing public attention, most Nigerians have held that Adenuga was simply one of the fronts for the very diverse economic interest of Babangida, the military General who ruled Nigeria with a mixture of guile and violence at a time when the nation’s economy enjoyed a boost of buoyancy especially during the Gulf War. Nigeria is believed to have earned $12billion within a six-month span during the Gulf War (August 1990- February 1991).

However, it would seem the closest an official connection linking Adenuga directly to Babangida as business partners was established in 2006 when the Economic and Financial Crimes Commission (EFCC) arrested and questioned Mohammed Babangida, first son of the former military president over his alleged ownership of 24 per cent shareholding of Globacom, the giant telecommunication company owned by Adenuga who was also briefly arrested by the then Nuhu Ribadu led EFCC.

But then, in what would become a characteristic of Adenuga’s engagements with enforcement authorities in Nigeria, the Bull, as he is fondly reverenced by his many admirers, took to his heels and fled Nigeria after he was granted bail. He would not return until a new Federal Government led by Mallam Umar Musa Yar’Adua took charge of the administration of the country.

THE BULL, AS HE IS FONDLY REVERENCED BY HIS MANY ADMIRERS, TOOK TO HIS HEELS AND FLED NIGERIA AFTER HE WAS GRANTED BAIL

It is now history that within the first six months of the Yar’Adua administration, Ribadu was hounded out of the EFCC and like many other matters being investigated by the agency, the matter of how Mohammed, the young man who was not known to be engaged in any form of business came about the wealth he used in purchasing his holdings in Globacom was swept under the carpet.

TRACKING THE ETB MINNA BRANCH UNEXPLAINED PAYMENTS

For an ETB’s insider, it is common knowledge that the bank branch in Minna, Niger State, must have been established to serve, especially, the needs of Babangida. According to the source, ETB’s Minna branch is located on Bosso Road, on the outskirts of the capital of Niger State and far away from Paiko Road, the city centre where most bank branches in the state capital are located.

“Of course, most of the customers that come to the Minna branch are very unusual looking people coming to collect manager’s cheques sometimes with value of up to N300million,” the source revealed.

“Most staff of ETB Minna branch have continued to wonder the kind of business the bank has with this odd looking people. When they enter the branch, every thing has to stop as the headquarters in Lagos will be directing us on how to go about making payment to these persons. Most often, we draw manager’s cheque to the value of N300million without even knowing which account to debit. The most important for us anytime any of these fellows come into the bank is just to hand over the cheque to them. It is after they would have collected the cheque that the bank headquarters would tell us to debit an internal account of the bank, that is, an account that belongs to the bank.

“We have all learnt to play dumb; of course, we know where the cheques would end up. What manner of business do we engage in Minna that we would be making such payments, sometimes up to N500million in a week. And this is not to just one person. Different people that are not known to the branch, usually come once and we don’t get to see them again. The names we get to write on the cheques are quite interesting, one would see that names were just being twisted to give them semblance of sequencing. But what can we do? We only relate to these people as directed by the headquarters in Lagos,” the source explained.
“I guess this is one of the issues the CBN/NDIC auditors were concerned with when they examined the books of the bank,” the source added.

An official of the bank that would not want his name in print, however, insisted that the CBN sanctioning of Adenuga was simply another political move by people he refused to identify.
“We don’t want to make this a media issue, we know that it is simply politics at play,” the official said.

What the CBN special examination of ETB revealed

Penultimate week, the Central Bank of Nigeria announced the result of the special examination it had conducted on the second batch of 14 banks it had performed its stress test on. The apex bank had on August 14 announced the sacking of five bank chief executives, in tow with their executive directors, as part of the outcome of the special examination of the first set of 10 banks.

Three chief executives of banks were given the boot in the second batch of 14 banks and that included the CEO of ETB, curiously, in a move far away from the sanction earlier imposed on the group of five banks on August 14, the CBN went behind the veil to specially treat Adenuga with the same sack sanction applied to his CEO. A non-executive director should under normal consideration be of little consequence to the running of the bank.

Though the Central Bank of Nigeria is yet to inform the public of ETB’s specific breaches of its rules or those for which Adenuga was removed from the board, a source with the apex bank informed Fortune&Class Weekly that the CBN identified Adenuga as the all pervading influence in the day to day management of the bank.

But perhaps, more worrisome to the auditors from CBN and the National Deposit Insurance Corporation that examined the books of ETB were the various unexplained payments made directly from internal accounts of the bank to various people through the Minna, Niger State branch of the bank. The unexplained payments, according to the CBN source, have over the years, run into billions of naira.

Investigation Reveals Where Bank Loans Went Bad

A Fortune&Class in-house panel of experts has, after a review of the bad loans accrued to the five banks currently under the Central Bank of Nigeria’s direct supervision, submitted that the Federal Government holds largest liability in repayment to the banks. The committee of experts nonetheless observed that the figures made public by the CBN also affirmed that the affected bank officials must have been heavily involved in unethical manipulation of the stock market even as the panel agreed that the banks, indeed, tried to play their economic role of financial intermediation by providing a big chunk of their facility for real sector activities.

The conclusions of the panel’s review may put the lies on the generalized opinion prevalent in the public place of the bulk of the five banks financing going into loans for stock market trading and the importation of petroleum products.

The panel reports that 51 per cent of the N747,000,000,000 alleged bad loan, approximated at N375,487,000,000 was given out by the banks to the real sector. The classification of the real sector, in the consideration of the panelists includes activities in construction, manufacturing, imports of raw materials for industries, farming and telecommunications.

Interestingly, the panel reports that a mere 22 per cent of the N747billion bad loan aggregated at N163billion can be attributed to the stock market while N218billion, about 27 per cent of the bad loan has been tracked to have been borrowed by players in the oil and gas sector.

The Case For Union Bank

Taken on individual profiling, Fortune&Class panelists submit that the sanctioning of Union Bank managing director should raise questions because of the five banks under the CBN’s thumb, Union Bank’s hope of recovering its bad loan is more assured because the bulk of the bad loans atissue are facilities given to entities in the real sector.

Of the total N73.582billion bad loan attributed to Union bank N66billion summed up to be loans to the real sector. The bank’s only stock market related bad loan is the N1,291,737,218 granted to GMT Securities.
In the same vein, the bank’s only outstanding to the oil gas sector is the N6,251,658,228 taken by Zenon Oil and Gas. Panelists argue that Zenon has a higher likelihood of paying up because of its track record in the oil and gas sector.

It is not, however, a shared optimism, as in the hope of recovery of the bad loan from a company like Femi Otedola’s owned Zenon when compared to the N28.5billion Oceanic Bank is expecting Rahmaniyya Global resources, a company in the petroleum products marketing sector, to repay it.
Rahmaniyya’s operations are reportedly hampered at the moment.

Crosscheck of operations at the Apapa depot of the company shows that not much activities are going on there. A senior staff of the company confides that operations have been hampered because of the company’s huge indebtedness to banks. The official took time to protest that the company’s situation became bad because an appreciable percentage of the loans secured at commercial banks were usually given out as kick backs to officials of the banks where the loans originated from.

Where Oceanic Bank May Lose Out

As a stand alone, Oceanic Bank’s loans are locked into the real sector, that is about N122billion of a total N278.2billion. The worrisome aspect of the bank’s bad loan portfolio, as it were, would be the N56billion exposure to the stock market. This figure aroused much concern because just six companies, as recorded, were found worthy enough to enjoy margin loan from the bank. The panelists reasoned that what the figures suggest is that officials of the bank merely decided to employ the services of this small number of stockbrokers to help it exploit the stock market.

The panelists also submit that the larger percentage of Oceanic Bank’s expected repayment from the bad loans tracked to the oil and gas sector of about N100billion hold no prospect of recovery in consideration of the track records of most of the entities that secured the loans.

Intercontinental Bank shares the same fate that may befall the recovery efforts of Oceanic Bank. With N34billion outstanding from just seven stock-broking houses most of which have continued to dispute the figures in the public domain.

Bad Loan Recovery Challenges For Intercontinental Bank

As in the case with Oceanic Bank, all of the brokerage houses involved have protested that the loan accounts were opened jointly with the banks. Some even complained that they never received any cheque book on the account that was in the joint names of the brokerage house and the bank.

In different letters of protest forwarded to the banks, some of these brokerage houses had hinted at being asked to engage in stock market manipulation by the bank. One of such protest letters written and forwarded to Intercontinental bank which Fortune&Class got a copy, reads:
“…Your bank also included clauses in the contract that gives you the sole right to decide which stock can be purchased and when such can be sold. The records presented to us even show that some of the shares purchased with the margin loan included the stock of your bank.”

The letter from the lawyer tells of more worrying aspects of the margin loan where it notes that:
“Our client mentioned the fact that they never solicited the loan but rather your bank approached them with the offer of the loan…even as their accounts were debited for the processing and management fees for the transaction before they had even had any opportunity to review or sign the offer letter.”
For our panelists, it is issues like these that may stunt efforts to recover the bad loans for Intercontinental Bank. This is besides the crisis of the Federal Government non-payment of petroleum products subsidy differentiation to oil marketers that secured a large part of the N79billion loan that was used in importing petroleum products into the country.

‘Afribank played big in the Stock Market…sure to lose big’

Not even the EFCC Chairman can yet fathom how the five companies that Afribank granted about N60billion to trade the stock market, would pay back their exposure in the current lacklustre stock market.

Whose interest was the bank management advancing by farming out the huge sum of N60billion to just five entities? Again, it is believed that the bank played big in the stock market to forward its interest. “That N60billion cannot be recovered in the short term,” one of our panelists said.

Finbank Liberal Lending Policy

Of the five embattled banks, Finbank Plc profiles a liberal lending culture. Though we can’t say for certain how the loans were collaterised, the fact of farming out its loan to a larger number of borrowing entities compared to other banks in the bad loan quagmire, suggests that recovery of debt may be easier Finbank.

The bank’s total non-performing loans as calculated by the CBN is approximated at N42.4billion. Of this, about N15billion was borrowed out to 83 operators in the real sector. This is just as the total sum of N11.1billion bad loan accruing from stock market activities, was granted to nine entities with the highest calculated to still owe about N3billion.

The same liberal lending policy shows in the figure of the loans repayment of N14billion from 17 entities in the oil and gas sector.

The Sector That Is Sure For Repayment

Our panel of experts are of the opinion that bad loans accrued in the real sector may easily be recovered because of the quality of collaterals that would have been provided before approval to draw down. This, however, excludes any insider related dealings.

Compared to loans to the real sector, recovery of bad debts accrued from stock trading activities may be considered hopeless in consideration of the state of the Nigerian stock market, the macro-economic environment and the harsh realities of the global economic meltdown. The collaterisation of loan assets in margin loan is linked to securities purchased, the lender is, however, supposed to dispose of with the securities in the open market when prices go below an agreed threshold. But it turned out that these banks didn’t effect the power of cashing the securities by selling off when the prices of the securities slid below the agreed threshold. Thus, the lenders are left with collaterised securities that are way below the worth of the loans.

Same is the extant downside of the oil and gas sector. With consistent sliding petroleum product prices and the unwillingness of the Federal Government the only buyer of petroleum products in Nigeria, to pay up the difference between the landing cost of petroleum products in the country and the price at which the marketers are mandated to sell to retailers, the expectation of bad loan recovery from the entities in these sector may be challenging.

Who Is Paying Up

The Economic and Financial Crimes Commission has said that it had so far recovered a sum of N25.5billion out of the N1.143 trillion of total non-performing loans of the five banks.

The break-down of recovered debt and the banks are as follows; Intercontinental bank N7, 736, 571, 744.19; Finbank.N1, 590, 417, 332.05, AfribankN7, 551, 121, 378.69, Oceanic bankN8, 033, 481, 868.65; Union bank N659, 240, 400.78.

Executive Directors Took N5bn Unsecured Loans Each

More troubling revelations have continued to emerge from the banking industry in the wake of the sack of five bank chiefs and members of their senior management cadre. Some top banking industry staff have started talking of the justification of the action of the Central Bank of Nigeria’s Governor, Sanusi Lamido Sanusi to sanction the affected bank chiefs and their senior management cadre because of their connivance to fleece the bank.

Specifically, the entire management board of one of the banks is said to being investigated by the CBN to ascertain how each Executive Director got approval of N5billion loan facility.

IBRU FAMILY RECRUITS SENATE LEADERSHIP, PRESIDENT’S WIFE TO SAVE CECILIA

The Ibru family reportedly threw all its influence and moneyed privileges into the battle to mitigate the public embarrassment of Mrs. Cecilia Ibru, sacked Managing Director of Oceanic Bank and wife of the patriarch of the Ibru’s clan, Olorogun Michael Ibru.

Details emerging in the wake of the sudden appearance of the erstwhile Managing Director of Oceanic Bank at the office of the Economic and Financial Crimes Commission (EFCC) last Wednesday, indicate that the wife of the Chairman of the Ibru organization was advised to beat a tactical retreat to allow the family deploy its massive goodwill in the nation’s political arena to stave off the prospect of an embarrassingly long detention for Mrs. Ibru by the EFCC.

Knowledgeable insiders to the horse trading that led to the eventual emergence of the woman fondly revered as the Nigeria’s first lady of banking, confided in Fortune&Class Weekly that the Ibru family pulled all the plugs through the Senate and the Presidency to get certain assurances from the EFCC before Mrs. Ibru was given the green light to submit herself at the EFCC.

“Seriously, we have only heard about the ingenuity of the Ibru family in making money, but I was a witness to another aspect of their lives these past days when I experienced their ability to move around and lobby office holders to intervene in the roiling crisis that had claimed one of their own, Mrs. Ibru. It’s not as if you saw any of the Ibrus physically, but there were many people lobbying on her behalf especially at the Senate,” the source said.

“You know, the second day after the Governor of the Central Bank of Nigeria, Sanusi Lamido (Sanusi) made those earth shaking pronouncements about sacking five bank chief executives, the President left the country in company with his wife, Turai. The next level of authority, in the real sense of it, at that time, was the Senate. And it was to the Senators that the Ibru lobbyists took their battle to get political pressure to be applied on the EFCC boss to provide lighter treatment and shortened detention for Mrs. Ibru. The fulcrum of the argument of the lobbyists is that the Central Bank of Nigeria was making a mountain out of a mole hill by its decisions to sack the bank managing directors and their arrest by the EFCC.

“The lobbyists pleaded with the leadership of the Senate to prevail on the Chairman of the EFCC, Mrs. Farida Waziri, to make a commitment to making Mrs. Ibru’s detention before taking her to the court as short as possible.

“Of course, they got sympathetic ears in the Senate. The Senate leadership made overtures to the Chairman of the EFCC who insisted that Mrs. Ibru must first surrender herself to the anti-grafts agency before she could determine the next step.

“Hajia Binta Turai, wife of President Umar Yar’Adua also played a peripheral role in the Ibru EFCC saga. Two of the first lady’s friends were drafted to talk to the EFCC Chairman to provide a soft landing for Mrs. Ibru, the source said.

Mrs. Ibru had, as part of her battle to stop her arrest and detention, dragged the Central Bank of Nigeria and its governor, Sanusi Lamido Sanusi before a Federal High Court in Abuja over her compulsory removal from office, demanding the sum of N50 billion for “exemplary, punitive and aggravated and general damages.”

The EFCC, however, declared Mrs. Ibru and Mr. Erastus Akingbola of Intercontinental Bank wanted on Sunday, 23 August, after failing to honour invitations for interrogation, sequel to their sack on August 14 along with three other bank MDs, Mr. Sebastine Adigwe of Afribank, Okey Nwosu of Finbank and Bartholomew Ebong of Union Bank.

A statement issued by EFCC Head of Media and Publicity, Femi Babafemi, explained that Ibru and Akingbola “are wanted in connection with fraudulent abuse of credit process, insider trading, capital market manipulation and money laundering running into billions of Naira.”

Investigation Reveals Where Bank Loans Went Bad
A Fortune&Class in-house panel of experts has, after a review of the bad loans accrued to the five banks currently under the Central Bank of Nigeria’s direct supervision, submitted that the Federal Government holds largest liability in repayment to the banks. The committee of experts nonetheless observed that the figures made public by the CBN also affirmed that the affected bank officials must have been heavily involved in unethical manipulation of the stock market even as the panel agreed that the banks, indeed, tried to play their economic role of financial intermediation by providing a big chunk of their facility for real sector activities. (read more)

Red Alert! Benin Airport Is Next Death Trap

Magazine cover 26The airport at Benin, capital city of Edo State has been described as a death trap waiting to snare flights either landing or taking off the airport. Two incidences of near misses last week gave credence to the troubling prospect of the next airport that may become the epi-centre of bad news in the aviation sector.

Not a few passengers on an Aero Contractor’s scheduled first flight to Benin from Lagos this past Monday, 20 July 2009 suffered a shake down resulting from a massive pump of adrenalin as the pilot of the airline reportedly made two unsuccessful but near fatal efforts to land on the runway of the Benin Airport. The pilot had to return to Lagos after the second attempt.

“We arrived at the vicinity of the Benin Airport without any incident, and we were actually in descent to the runway for final landing when suddenly all passengers, and apparently, the pilot saw that we were far away from the airport runway. What suddenly jumped at house from the ground was a mix of green field and trees while the airplane speed was at full throttle,” said a passenger who shared his experience with Fortune&Class Weekly.

“The pilot had to quickly revert position by taking off. He announced through the cockpit’s address system that he had to abort landing procedure because of poor visibility caused by low hanging cloud. He then informed us that he would make a second try, the passenger added.

However, according to the passenger, the second landing effort turned out scarier than the first.

“That second attempt threw every passenger aboard into panic; again, the pilot had to abort the landing and announced that he had to make a turn back to Lagos because of the bad weather. I must confess that when we heard the pilot’s voice on the address system, the voice was much shaken. In fact, we were made to understand that the experience got under the skin of the pilot that he had to surrender the control of the flight back to Lagos to his co-pilot, a female,” the passenger said.

Meanwhile, another reported that as the Aero Contractor airplane, a Boeing 737-500, headed back to Lagos, two Arik airplanes, one from Abuja and the other from Lagos successfully landed at the Benin Airport and this roused a heated debate among passengers on the flight on the possible reason for the successful landing of the two Arik Air planes while Aero Contractor had to abort landing.

Aviation experts we spoke with, however, explained that the Arik Air planes were of smaller carrying capacity which allows them to manoeuvre for landing better than the Aero Contractor’s Boeing 737-500.

Another expert, however, submitted that the lack of appropriate instrument landing system at the airport has made the airport a potential death-trap. The expert argued that the Aero Contractor’s plane made those near disastrous landings because it was not properly directed from the control towers, “and that is because the airport doesn’t have reliable landing instrument to guide the effort of the pilot. I hope the authorities will quickly address this shortcoming before something disastrous happens,” the expert said.

Between Aero-Contractors and FAAN The Rigmarole
This report as submitted by Jonah Etufunwa

It was clear to us that Aero-Contractors must have knowledge of what happened that fateful Monday morning when the passengers had their hearts in their mouths as their aircraft’s attempts to land twice at Benin Airport were aborted. Even the pilot, a male, who became faint-hearted, we learnt, had to be assisted by the co-pilot, a woman, back to Lagos.

Getting to their office at the local airport, Ikeja, we were jolted by the evasive attitudes of officers there.

We wanted to speak with the public affairs manager, but the receptionist told us that the person to talk to us was the commercial manager, who was not in the office then, so his secretary after hearing the story from us, told us to hold on. We waited for more than 40 minutes and later discovered that for more than additional 15 minutes her lines rang without her response as the receptionist tried to remind her that we were still waiting.

The woman who asked us to hang on had disappeared. We could understand her situation; she was not authorized to speak on such matters to the press, but she could have treated us in a much better way. One thing was obvious at Aero-Contractors, a public affairs manager is not on their payroll.

Before leaving we reminded the receptionist that we did not want to report our story without confirmation, but that they were making things difficult for us.

Our investigation took us to NAMA and we were told by a source at their public affairs department that Aero-Contractors’ difficulty with landing could be associated with the aircraft’s malfunctioning or the pilot’s error. “As far as we had given them the right to land, missing the run-way twice is between Aero and Federal Airports Authority of Nigeria, (FAAN). FAAN is the landlord, it provides landing equipment.”

An official of NAMA who would not want his name in print, however, noted that if there was a fog or cloud, it is not advisable to land. “If you are driving, and it begins to rain, visibility can be maximally reduced, that does not mean the road is not good; and at such a situation one may even park for a short while,” the official reasoned with us.

We asked if nothing could have been done to aid visibility in the inclement weather. He said the landing lights are supposed to be on. “Could the light have been off due to one reason or the other,” we further asked. He said that NAMA manages Nigeria’s airspace and they are responsible for airborne aircraft from zero to 5,000 feet and to make sure that their equipment are always functioning to make communication possible with all aircraft landing or taking off, “NAMA maintains powerful generating sets every time. FAAN does same,’ he said.

The following day, last Friday, we were at the office of the General Manager, Public Affairs, Akin Olukunle. After listening to our story of the averted tragedy, he said he was just hearing that for the first time, that he would commence investigation immediately and would get back to us. We knew he would like to also get firsthand information from the Aero-Contractors’ management. We therefore decided to return to Aero-Contractors office. The receptionist knowing we were there the previous day, called the commercial manager’s office. The secretary, (not the one that spoke with us the day before, Thursday) in the absence of her boss, directed the receptionist to a captain, who definitely we thought would solve our problems, but unfortunately when we were asked to speak with someone on phone, we ended up talking with the secretary.

What we got from this secretary was an anti-climax. She blurted: “Go to Control Tower.”

“Where is the Control Tower,” we asked.

The secretary further shocked us, saying, “You say you are a reporter and you don’t know Control Tower? Go to FAAN.”

“Why are you getting angry?” we asked her and she never replied. We did not have to go to FAAN because the air-lord of Nigerian airports, the controllers of the Control Tower, is NAMA, not FAAN and we had already spoken with FAAN’s GM, Public Affairs.

To expedite action, our reporter sent a text message to FAAN’s GM thus: “Pls, assist me with d investigatn of what happened to Aero-Contractors’ aircraft on Monday morning @ Benin. My editor is waiting for the story 2day. When u’v found out, flash me n I’ll call u. Tanx.”

Until Saturday morning before going to the press, we did not hear from the FAAN’s GM.

The Call To Upgrade Instrument Landing System

An Aeronautical Scientist, Mr. Dauda Ajeye Nuhu, had in a presentation argued for the upgrade of certain major airports in Nigeria to the optimum category (CATIIIB) for Instrument Landing System (ILS) approaches.

Dauda writes: “ILS approach is that which allow the automatic pilot land the aircraft in poor visibility without the human pilot’s manual input on the yoke during aircraft landing at airport runway. It is true to say that not every airport in the developed world has Category Three B (CATIIIB) autopilot approach ILS installed on all, but most of the busy airports are. This goes to say that at least certain airports in Nigeria can get these systems installed and certified, especially for International airports and the busiest local airports that run relatively active local flights on day to day basis.

Ogun State Land Scare! Government Blackmails Estate Developers, Land Owners

Volume II, Issue 20

Last Monday, 8 June, 2009, the Ogun State Bureau of Lands and Survey, under the insignia of the State Government, had caused the publication of what it described as a “Final Warning” ostensibly directing the attention of individuals and corporate bodies to activities of estate developers and promoters in about 14 locations in the state where real estate development seems to be intense. The Bureau of Lands and Survey described the activities of the estate developers as illegal.

The second of such publication in two weeks, the last of the same half page public notice, did get the attention of the target population it was intended for; a hail of panic seized the community of estate developers and subscribers to the former virgin lands belonging to Ogun State but which have found new attraction in value because of their proximity to Lagos State. As affected estate developers became restless, so were subscribers, they became distressed. (Read More)

BGL still upset with underwriting AIT, Honeywell public offers

It is just as well that the Securities and Exchange Commission has decided to adopt the recommendation of the Oladotun Sulaiman’s Nigeria Capital Market Reform Committee on the reversal of compulsory underwriting of public offerings.

BGL Securities Limited, one of Nigeria’s lead issuing houses and brokerage firms, is said to still be smarting from the downside effect of underwriting two public offerings last year. BGL Securities was part of the underwriters of the public offering of Daar Communications and Honeywell.

Others -

Losses, Debts Force Sale of Zain

Transcorp To Lose Hilton Hotel, Abuja

Volume II, Issue 18

This week on the June 08, 2009 edition of Fortune&Class Weekly:

• FIRS bars ETB, Spring Bank, Wema Bank – The Federal Inland Revenue Service (FIRS) has barred three banks from collecting taxes and other revenue due to the federal government on its behalf.

The banks, Equitorial Trust Bank (ETB), Spring Bank and Wema Bank were given the marching order because they refused to accede to the request by the FIRS to sign the mandatory collection agreement, a source in FIRS has confided in Fortune&Class.

According to the high level source in the revenue collection agency, the FIRS have had to introduce the mandatory collection agreement as a legal contract between it and financial institutions that desire to serve as collection agencies for it (FIRS). (read more)

Who Is In Charge Of The Stock Market? Daisy Ekine, SEC DG, Moves To Tame NSE DG, Okereke-Onyiuke

The demutualisation of the Nigerian Stock Exchange has become the standard issue to determine the agency that wields ultimate authority and control on the Nigerian stock market. Simply put, demutualisation means that the Nigerian Stock Exchange transforms into the equivalence of a quoted company with its share available to the investing public for subscription and trading.

The imagination of the investing public had been excited since since October last year when  the Director-General of the NSE, Prof. (Mrs.) Ndi Okereke-Onyiuke announced that there would be a demutualisation of the Exchange, announcing in the same breathe that she and seven senior officials of the NSE are to retire voluntarily.

According to the DG of the NSE, at a February 2009 press conference, the Council of the NSE had appointed Accenture, the global management consulting, technology services and outsourcing company to help with the demutualization and transformation of the Exchange to become profit making, she explained at the press conference that “ we have to re-orientate and transform the management and staff (of the Exchange) to look at the Exchange as a profit making company like First Bank, Unilever, Japaul and even our own Central Securities Clearing System.” …

Bank Managers Divert Customers To Black Market Lenders

Chukwuma Soludo, fmr CBN Governor

Some branch managers of commercial banks in Nigeria have become lending authorities by themselves, a Fortune&Class investigation has revealed. The activities of these managers, according to the investigation, has led to the emergence and thriving of a black market for lending which, however, has become a source of worries and consternation for customers who are protesting how they are being exploited by the black market lenders.

For each bank branch, there is the unofficial lender, operated by the branch manager with the connivance of some other bank branch officials. When a customer approaches the branch with a request to raise fund for a business, the customer is as usual, confronted with a long list of requirements to be considered before loan application is approved. …

Agagu is Arrow-Head of SW 8, Wema Bank New Core Investor

Segun Oloketuyi, Olusegun Agagu

It has been reported that barring any unforeseen circumstance, Mr. Segun Oloketuyi, an executive director with Skye Bank, may soon be named as the new group managing director of Wema Bank Plc following the successful acquisition of 27 per cent controlling shares by new core investors, SW8 Consortium, in the bank.

Until recently, officials of the bank and regulatory agencies involved in the ownership structuring of banks in the country have decidedly kept sealed lips on the individuals and interests involved in the SW8 Consortium.

To sate the going curiosity of investors that desire to take position in the bank, Fortune&Class reveal that Dr. Olusegun Agagu, former governor of Ondo State is the arrow head of other mainly political personalities behind the SW8 Consortium.

Agagu served as Minister of Power in ex-president Olusegun Obasanjo’s cabinet between 1999 and 2003 and was elected Governor of Ondo State in 2003. Agagu re-election for a second term was, however, challenged this year by Dr. Olusegun Mimiko who eventually secured the rulings of both the election petition tribunal and the appeal court panel that asserted that Mimiko was the rightfully elected Governor of the State.

Volume II, Issue 17

Tax Evasion! Adenuga May Have Problems With Foreign Banks

A feel of public opinion immediately after the publication of the damning news of company income tax evasion by Continental Oil and Gas and Conoil Producing, two upstream oil companies belonging to Otunba Mike Adenuga Jr., was that the $610million (N89billion) tax demand the Federal Inland Revenue Service had made on the companies would not stir Adenuga’s considerable wealth and business standing. However, it would seem that perception may be different from reality, two weeks after the May 7, 2009 shutdown of operations at the two companies, the gates of the companies still remained no admittance zones with the seal and locks of the Federal Inland Revenue Service (FIRS). Officials of the Revenue Service that Fortune&Class spoke with insisted that though Adenuga has been trying to rally the influence of his powerful friends in and out of government, the FIRS will not back out of the demand order until the full sum of the tax due is paid. …

Fortune And Class Demands Excess Bank Charges Refund From Intercontinental Bank

In a test of procedure and standard of rules governing the banking industry, Fortune and Class Limited, publishers of Fortune&Class Magazine and Fortune&Class Weekly, has taken issues with Intercontinental Bank over excess bank charges incurred on its overdraft account with the bank. And as a first, the management of the company has directed the firm of Forensic Consulting to forward a demand letter for the refund of N243,639.02 being excess bank charges discovered by forensic accountants while reconciling the account. …

Unity Bank Yet To Declare Corporate Result In Two Years

Unity Bank of Plc has defied the standing rules of the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC) on post listing requirements which assert that listed companies must release their quarterly and annual operations and performance result to the investing public through the Stock Exchange and the SEC as and when…

Delisted firms: shareholders rally support to recoup funds

The Independent Shareholders Association of Nigeria (ISAN) is reported be rallying support to help investors of recently de-listed companies on the Daily Official List of the Nigerian Stock Exchange (NSE) recoup their investments in the companies.
According to a report by Proshare NI, Adeleke Adebayo, General Secretary of the Association has confirmed that ISAN had visited…

Agusto & Co Assigns “Bb+” rating to Swap Technologies & Telecoms Plc

Augusto&Co, Nigeria’s respected rating company has assigned a rating of “Bb+” to Swap Technologies & Telecoms Plc. According to a release by the rating company, the rating of Swap Technologies & Telecoms Plc reflects the company’s strengthened capital position, adequate working capital and satisfactory profitability. The rating is hampered by weak operating cash flows resulting…

Telkom Reports That Nigerian Operation Is Difficult …losses In The Country Halve Profit

Losses at Telkom’s Nigerian unit and costs including charges related to stake sales cut the telecoms company’s profit by as much as 50 percent for the financial year to March. Headline earnings a share from continuing operations were as much as 50 percent lower than the previous year. Headline earnings a share, including discontinued operations…

Foreign Fund Managers Show New Interest In Nigerian Stock Market

Fund managers in the United States of America and Europe have been reported by Reuters to be showing more than passing interest in stock markets in Africa with the Nigerian stock market providing the greatest attraction.

The report claimed that having fled Africa in droves during last year’s global financial turmoil, portfolio investors are slowly…

Wonder Bank Fund Laundered On The Stock Exchange Through Capital Oil

There is a strong agitation by financial sector watchers over the possibility of illegal money laundering on the platform of the Nigerian Stock Exchange. A report by Proshare Nigeria indicates that Capital Oil Plc (Capoil), a security listed in the second tier segment of the Nigerian Stock Exchange (NSE) has listed shares purchased with funds…

How We Planned To Save Minority Shareholders In Delisted Companies-Independent Shareholders Association Scribe

In this interview with PETER OBIORA of Proshare NI, Adeleke Adebayo, the General Secretary Independent Shareholders Association of Nigeria (ISAN) at the venue of the 84th Annual General Meeting (AGM) of Unilever Nigeria Plc (Unilever) discusses issues relating to the recently delisted companies on the Floor of the Nigerian Stock Exchange (NSE), what shareholders are doing to help save minority investors, and why companies delist from the Exchange.

Other issues discussed include the delisting of Cappa D’Alberto Plc from the NSE, shareholders efforts to help investors of recently delisted companies, Unilever and 68 Kobo dividend to investors of the company, Cadbury Nigeria Plc (Cadbury) and Okitipupa Oil Plc raising fresh funds. Excerpts: …

CBN Slams Stock Brokers Over Interest Rate…Vetiva Capital Management Ltd Loses Millions To Clients

Are stockbroking firms legally empowered to charge interest on margin account or to undertake any form of lending activity with objective to profit from through accrual of interest rate? This is the question the Central Bank of Nigeria may have resolved with its declaration that stockbroking firms or asset management companies cannot possibly qualify to…

Volume 2, Issue 16

This week on your Fortune&Class Magazine;

FIRS SEALS ADENUGA’S OIL COMPANIES OVER N89 BILLION TAX EVASION
It would sound rather ironical that the totality of the Nigerian state has been compelled to reconsider the structure of its national budget which has a built-in 500 million dollar deficit financing plan, about 30 per cent of the national budget, because of the certain realization that it could not possibly raise the dollar sum in the international finance market as planned, yet, two oil companies owned by Otunba Mike Adenuga Jr. are reported to be indebted to the Federal Government, through various forms of taxes, a sum calculated at 610.6million dollar (N89,147,600,000). …

STOCK MARKET REBOUND IS SUSPICIOUS -Experts
For some more discerning investors and analysts, the pillaging of the Nigerian stock market last Thursday, 14 May 2009 was inevitable. The Nigerian stock market had witnessed a sudden upward trending, albeit unexpectedly, since March, but showing consistency over the last two weeks.

Analysts at Meristem Securities capture the character of the final days of the bull in the market, last week, as prices of stocks generally hugged the sky when they noted in their stock market daily report of Wednesday, 13 May that: …

WHY THE PRESIDENCY WANTS TRANSCORP MD, TOM ISEGHOHI, PROSECUTED
The detention and questioning first by the State Securities Services and later by officials of the Economic and Financial Crimes Commission, of Mr. Tom Iseghohi, Group Managing Director of Transcorp and two other officials of Transcorp Plc, Mohammed Buba, Company Secretary, and the Head of Shared Services, Mike Okoli may not be unconnected with complains emanating from the presidency over the management of the nation’s former sole national carrier, NITEL, a now moribund company the Federal Government desperate wants vended off to a more competent and qualified core investor, away from the majority holding of Transcorp. …

RACE FOR NSE DG HOTS UP
There are subterranean maneouvres and scheming involving some top management staffer of the Nigerian Stock Exchange (NSE) following the expected exit of Professor (Mrs.) Ndi-Okereke-Onyiuke, the Group Chief Executive Officer/ Director General (GCEO/DG) of the NSE in year 2010, according to an investigation conducted by Proshare. …

HEAD HUNTERS GO AFTER ACCESS BANK SHARES
The recent rally in the Nigerian stock market was an enough signal to put most investors to place their stock brokers on the alert mandate, once price of particular stocks reached a given threshold. These, investors, like the generality of the market investors, had watched helplessly their money locked in to shares they bought in the momentous period of the bulls’ domination of the Nigerian Stock Exchange, except that they are willing to sell now to discount their losses because of their huge holdings. …

NIGERIAN BREWERIES STILL THE STOCK OF CHOICE
Analysts at Proshare NI have submitted that only two stocks have attained 2009 highs and these are Nigerian Breweries and Benue Cement Company. In an analysis as contained in Proshare NI market review, the analysts observed that between the beginning of the market rally on March 31, 2009 and May 7, 2009, the Nigerian Breweries stock had gained N16.75K, a gain of 46.85 per cent. The analysts opined that the stock must have picked up possibly due to less number of shares outstanding of 7.56billion which trims down the desire by most investors to dump shares.

Access Bank in dilemma over N3Million excess bank charges

The controversy generated in consequence of an Access Bank Plc customer accusation of stealing and cheating against the bank in description of what the customer, Messrs Abivico Investment & Promotions Company ascribed to illegal and excess bank charges and the part admittance of the accusation of the customer by Access Bank may provide the basis for a legal contest where some of the nation’s banking law would be availed the scrutiny of the law. Read.