NEW NAME FOR EXPLOITATION: THE BUSINESS MODELS OF THE OIL GIANTS

The successes of business entities are model dependent, and to every business concern is attributed a peculiar way of doing things. That is exploiting opportunities for profit, at least, this is what entrepreneurship is all about; make money the way it suits you. So which of these two identified business models would you rather adopt? The two models are cheekily referenced in the corporate enclave as the Shell Model and the Chevron Model.

By the way, Shell and Chevron are two of the nation’s multinational big players in the oil and gas upstream sector. Upstream sector translates to oil and gas exploration and production.

First, the Shell model: this is predicated on big pay and a consequent bigger responsibilities profile. Industry sources explain that Shell employs a staff to collect the salary of two but is given the work of three staff on the same responsibility scale.

The Chevron Model: Simple, lease everything from teaspoon to vessels. Industry insiders account claim that Chevron is ready to go. I don’t know if you know what I mean. It means that with a little ruffling up, Chevron is nimble enough, not being burdened with acquired assets in Nigeria, to just jump on the next flight out of the country.

Now, you can go, think out your own exploitative model. It’s all about making money, isn’t it?

TALE OF SIX ROGUE COMPANIES BEHIND PETROLEUM PRODUCTS ROUND TRIPPING AND THEIR GID FATHERS

You heard of petroleum marketing companies being investigated for round tripping petroleum products and still fleecing the nations of billions of naira through deceptive request for refund from the Petroleum Support Fund?

Yes, investigation is on-going and as we go to press, we have it on good source that six smalltime marketers have been fingered for detailed investigation, and well, for your ears only a former top notch in the Federal Government recently relieved of his high office, plus another one, who was part of the regulatory agency.

The six companies were said to have found influential moles at the Nigerian National Petroleum Corporation and its marketing arm, the Petroleum Products Marketing Company (PPMC). Know how the deal works? Here is an abridged detail; these six secure product allocations from PPMC, move in vessel to load products that were already imported into the country, make a foray to the high sea, then turn around, head for Nigeria and berth at designated PPMC ports as if they just brought in fresh supplies from wherever. The scheming round trippers off-load and well, after processing their paper, apply for fund from the PSF. For that effort, the former big man in government goes home with N25million on every successful returns made by his sea farer round tripping marketers.

Avail yourself a brief on what PSF is all about:

 The Federal Government established a petroleum support fund effective January 2006 to stabilise the domestic prices of petroleum products against volatility in international crude and products prices. A substantial amount of that by government schedule will go for kerosene subsidy, thereafter, whatever is left on a monthly basis will go for petrol.

 

The fund, which is domiciled in the Central Bank of Nigeria (CBN), available for companies and depot owners licensed by the Department of Petroleum Resources (DPR), the disbursement of the fund to marketers importing petroleum products follow collation of product figures in all refineries, jetties and depots located in various parts of the country.

 

Now, let’s do some comparison: None of the six companies,  prime suspects, are importers, “they don’t even have loading bays,” our very knowledgeable insider says.

THEY SAY ADENUGA’S WISH TO SIGN OFF ETB SUFFERS A SET BACK

Perhaps some ETB staff that were in the know of the negotiation of the acquisition of the bank by FirstBank were excited at the prospect of changing boss from the authority of Otunba (Dr.) Mike Adenuga to the structured management of FirstBank. Feelers from the bank owned by Adenuga indicated that some staff members were really perturbed when months after the very discreet discussion between ETB and FirtBank hit the dirt.

Background sourcing indicated that Adenuga is intent at concentrating on his money spinners, the telecom and oil and gas ventures in his vast business empire and considered the relinquishing what they claimed to be the troubles of running his ETB to the banking giant.

Some of the staff considered this a momentary set back though.

WHEN THE ZEAL IN A CRUSADER DIES OUT

Mr. Niyi Akinsiju

Mr. Niyi Akinsiju

There must be something decidedly derelict about the civil service. I have seen several otherwise distinguished professionals that impacted their operating industries in the private sector turned hapless, loud talking caricature of their old selves.

 

 

In the instant domain of my observation is the Federal Minister of Finance, Shamsudeed Usman, a former Deputy Governor at the Central Bank of Nigeria. Though the CBN is not a private sector based concern, the apex bank has over the years bathed off the lethargy that usually counts in the characterization of the labourous working of the civil service. So we might as well assume that any one that had the privilege of working in the CBN had a quasi private sector orientation.

 

Not a few Nigerian were exhilarated when Usman was announced as the lead Minister at the Federal Ministry of Finance in the early days of President Umar Musa Yar’Adua’s government. Usman is now helped by Mr. Remi Babalola, a professional banker nurtured and nourished in the culture of the private sector. Nobody could have questioned the good judgment of the President, at least, it represented a continuation of the second term disposition of the presidency of Olusegun Obasanjo, who made away with the historian and politicians that held sway in the ultra sensitive Finance Ministry during his 1999 to 2003 first term in the presidency.

 

The appointment of Usman and Babalola revived the hope of furthering the modest economic gains recorded during the stay of World Bank chief, Ngozi Okojo Iweala, at the Ministry of Finance.

 

And I must say that the duo at the Ministry of Finance started well, that is, if you are one of those that gets easily enamoured oral rendition of what government wished to do and a generalized critique of current state of things the new officials met on ground.

 

This certainly seems to be the trend, newly appointed officials raged righteously at how heinous the responsibilities of the office they just resumed had been criminally abandoned by successor, and he shows his zeal, a candid reformist one at that in the manner of his outcry to the public. Unfortunately, this hysterical reaction merely last some few months, at best, a year. The newly appointed officials seem to get swallowed into the civil service vortex and thereafter fall into the now obvious description of furious motion without movement.

 

I recall the near radical presentation of the Ministry of Finance team to the public as presented by Usman when the administration was barely four months old. The presentation tagged The New Road Map To Economic Reforms succinctly captured the work load of the new helmsmen at the Ministry of Finance. Usman said of his intention to accelerate institutional reform and I quote him here.

 

“While it is acknowledged that the Federal Ministry of Finance is one of the pilot ministries under the first phase of the public sector reforms implementation, the evidence on the ground suggests the need to broaden and intensify the reform and restructuring, both within the Ministry and in a number of its agencies.

 

“In a number of its Departments and Agencies there is a fundamental lack of focus and strategic direction. A few examples will help to illustrate the point. the Economic Research and Project Management (ERPM) Department seems to have drifted from its core mandate of research and planning to supervision of the Ministry’s capital projects, a function for which it lacks the necessary expertise. As a result, the quality of the research reports produced by the Department leaves much to be desired.

·         the Home Finance Department (HFD), in addition to its many critical functions, is still granting approvals to government MDAs for foreign exchange transactions. In an era where foreign exchange transactions have been virtually fully deregulated, such approvals are completely anachronistic and, therefore unnecessary.

·         the National Board for Community Banks is still around, somewhere under the Ministry, ostensibly supervising the Community Banks, long after the CBN, where such responsibility squarely rests, has replaced community banks with microfinance banks.

·         A Budget Monitoring Department exists in the Ministry. It currently, however, has only one functional Division, which is somehow, still performing the functions of debt servicing and monitoring, which have since been effectively taken over by the Debt Management Office (DMO), itself being supervised by the Ministry. There is the need, furthermore, to reconcile the functions of the Budget Monitoring Department with similar functions performed by other MDAs of government, such as the BMPIU (now Bureau for Public Procurement), the National Planning Commission and NEIC, so as to avoid unnecessary duplication.

 

Thus, we intend to undertake a major restructuring of the Ministry, in order to avoid the overlapping of functions across Departments, eliminate outdated functions and redundancies and refocus the Departments and Agencies towards their core functions. The reform will also address the glaring problem of inadequate IT infrastructure knowledge and functionality. We also intend to resolve the serious delay in the completion of the second phase of the Ministry’s Headquarters project. The construction is already about 18 months behind schedule due, essentially to serious disagreement between the main contractor and the consultants to the project.

 

Working with other relevant agencies in the reform agenda also, such as the Public Sector Reform Bureau, we intend to champion reforms not only in our Ministry but also in the wider, public sector as well.

 

Well said, it was an obviously outraged Usman that presented the parlous state of his Ministry to the public. And to imagine that a World Bank chieftain once administered that den of rots as described by Usman. Anyway, I still thank the Minister for providing an insight into the cesspit of government in his early days in office when he still, obviously, burn with the redeemer’s passion.

Yet a review of the ministry’s activities still underscores the fact that nothing has changed, in fact, under Usman, what Nigerians have been regaled with are those genuflecting, ill explained seven-point agenda. I personally can’t yet discern a direction for the economy, fact is that I always have this feeling of journey back to the helpless economic drift of the 1980s God Forbid.  

 

Beyond the dump site that his Ministry can be compared with when he gave that presentation, Usman also talked about what he would do with other segments of the larger economy and related agencies. His words: “The most critical objective in the reform of the Nigeria Customs Service, however, is the reduction of the delay in the clearing of goods through the Nigerian ports of entry. Currently it takes an average of two weeks to clear goods through the Nigerian ports. The procedure is so cumbersome and frustrating that it engenders two events: The first is that it forces even the legitimate importer either to divert his imports to neighboring countries’ ports, or to succumb to unholy corrupt practices, in order to clear his goods. The second is that it creates a fertile ground for the illegitimate and or corrupt importer to undertake brisk business, at great cost to the Nigerian economy.

 

“Arrangements are therefore on, in consultation and conjunction with other key stakeholders engaged in the Nigerian ports of entry, to reduce this delay considerably. The target is to reduce the average clearing period from two weeks to two days. It is tough, but with the support and cooperation of all other stakeholders, it can be done. If other countries can get goods cleared through their ports in as little as six hours, Nigeria should be able to do it in 48 hours.

 

“It is a well accepted fact that a good tax system can be a major pillar of support for democracy. It can be posited, for example that one reason why the electorate has been so non-chalant in the face of the apparent fiscal mismanagement by some public officials, is the weakness in the personal income tax system, where the electorate does not directly feel the pinch of such transgressions. Considerable attention will be paid therefore to a broad range of efforts to improve tax administration all over the country, including the establishment of an efficient, computerized system of tax payer registration, working with other relevant agencies.

 

“Sustaining the Capital Market Reforms. It is important to acknowledge the growing confidence in theNigerian capital market arising from the recent reforms undertaken by Nigeria, including the banking sector consolidation and the repayment of the London and Paris Clubs debts. This has led to a substantial portfolio investment inflow into the Nigerian capital market. In 2000, the foreign portfolio investment inflow into the market stood at N51.1 billion compared with N1.0 billion in 1999. Since then the market has witnessed a tremendous increase in the inflow of funds from overseas, with a record high of N375.9 billion in 2005 and N117.2 billion in 2006. In this regard, it is very important to continue with measures that will strengthen and sustain confidence in the market. It is equally important to provide safeguards that will minimize the risk of the kind of meltdowns that have happened in the capital markets of some emerging market countries and the markets of some more developed countries. Such strengthening will be assisted by the following measures: a) the plan to broaden and deepen the market by, among others, the use of more instruments. In this regard the SEC will work closely with the DMO in the development of the bond market and its greater use by the Federal, States and Local Governments, as well as by corporates.b) Developing stronger mechanisms to check insider dealings and other forms of market abuse. c) Creating greater public awareness and utilization, of the capital market, especially the Abuja Commodities and Securities Exchange and d) The SEC will liaise with other key stakeholders to try to reduce further the cost of doing business in the Nigerian capital market”.

 

That was the Minister back then. Now, if you ask my opinion of the promises all that, and I guess it would tally with yours, I think the Minister’s speech writer is gifted with a lot of imagination and audaciousness.

 

So, what has changed with the Customs and goods clearing time from the ports? Is there an appropriately working tax collection and dispersal platform at work? And worst of all, the Minister actually saw into the future when he talked about averting a possible market melt down in the Nigerian capital market but It seems soon after those tough talks, the civil service packed him up, fed him the bland officious indulgence that others before him had got inebriated with…and well, as they all did, Usman drowled into complacency only to wake into the shocking reality of the sludge in the civil service. Shame!

ANOTHER BANKING CRISIS IMMINENT!: MOVE YOUR MONEY TO STRONG BANKS…EXPERT ADVISES

Mr. Ori Adeyemo, a Forensic Accountant and crusader for best practices in the banking industry, has warned that the Nigerian banking industry is facing an imminent collapse unless urgent and reasonable measures are taken by the Federal Government to curtail the slide into what he described as anarchy and chaos. 

“By the nature of my job, I am privy to the fact that the books of most Nigerian banks have been in very bad shape over a long time, not minding the spurious financial returns that they post to deceive gullible Nigerians from time to time.

“I am aware that anytime the year end of a bank is months away some banks stop all lending activities to embark on aggressive mobilization for deposits and engage vigorously in short-term inter-bank placements in order to jerk up their balance sheets.  I am aware that it is at this point in time that spurious bank charges unashamedly suddenly appear in the account of the customers if only for the purpose of declaring huge profits to the shareholders at the next Annual General Meeting (AGM).”

Questioning the survival strategy of the affected banks at declaring huge profit while yet not engaged in lending activities which is supposed to be the primary activity of a commercial bank, Adeyemo said: “I reliably gathered that some banks no longer lend money to their customers, this is a palpable sign of distress just as some do not lend beyond three months maturity period.  Now, with their stupendous overhead to defray on a monthly basis, how are they supposed to cope? Most banks have lost huge sums to the stock market while actively engaged in trading their shares. That was when most Nigerians wrongfully thought that the stock market was a ready treasure till.”  

In a review of how banking activities had impacted on the downturn in the capital market and had also thrown banking industry into worries of losses of huge sum, Adeyemo explained: “Over the past few months when the obvious slide in the stock market started, investors have lost not less than N3.5 trillion as a result of the depression in the market.  I understand that the loss came about from the maturity of the credit facilities which were taken by investors to buy FirstBank Plc public offer from other banks for which various collateral security such as share certificates, landed properties, etc; were deployed.  It must also be stated that FirstBank Plc returned over N600 billion of unallotted shares after holding the funds for over eight months at a paltry five per cent  per annum interest rate.  Meanwhile, the aggregate of charges which customers would have borrowed the returned funds from other banks cannot be less than 25 per cent  per annum.  The effect is that at the expiration of a credit facility, a demand is made on the investor to pay up or sell off the shares by the exposed bank thereby leading to a supply glut in the market as desperate investors simultaneously besiege the market looking for how to dispose various shares.  The net effect is a continuous loss of value on a daily basis.

“The investors who operate margin account with these banks are worse off since the exposed banks would have been mandated to dispose of the collaterised shares once the price drops to a threshold usually set at about 130 per cent of purchase price not minding the initial equity contribution made by the customer.

“It is a hidden truth that the hitherto astronomical rise in the price of the shares in the Nigeria Stock Exchange is as a result of price manipulations by banks.  These banks I understand give money to stockbrokers who they mandate to transact in the shares of the sponsoring banks thereby jerking up the price sequel to the bank entering into the market to source for fresh funds.  For example, a bank may give say N1 billion each to five stockbrokers to be trading in its shares.  These stockbrokers are given a target to meet within a specified period of time, say six months prior to a public offer.  The brokers then set out to buy and trade in the bank’s shares in the market in order to create an artificial scarcity thereof leading to a continuous upscale in market price.  After say six months, when the price would have risen to the desired height, the bank would then announce its entry into the market with fanfare whilst discounting the new offer price after the shares would have been put on technical suspension.  There and then, you will see gullible Nigerians rushing over themselves to buy these over-priced shares with huge funds secured from the banks.

“Now, with the loss of value of shares at the Nigerian Stock Exchange, banks have lost a lot of money but they are keeping quiet about it.  Also, the money which they lent to customers for the purpose of margin account has been wiped away having drastically dropped to a dismal level of say 20 per cent of initial purchase price.  In other words, these banks cannot even sell the collaterised shares as doing so will erode whatever security that they can rely upon since the share certificates have become worthless papers.  The banks too cannot bully the margin account customers to defray their debt whilst charging interest at an illegal default rate.  If the total loss of value in the stock exchange is N3.5 trillion, then the contribution of the banks alone cannot be less than N2 trillion being the most active players

“Is it not curious that at this point in time no bank can tell their percentage of risk exposure? This helps the banking public to know which banks are in good standing and which ones are not.”

Last week, after a period of assuring Nigerians that all was well with their banks, chief executives of banks decided to formally request the Federal Government to intervene in the nation’s financial sector to forestal the effect of the ongoing global financial crisis on the system.

Meeting under the aegis of the Committee of Banks’ Chief Executives, the bankers agreed to request the Federal Government to intervene in the nation’s financial market through a package of measures similar to those introduced in developed countries and that the Central Bank (CBN) should continue to support the interbank money market.

In response to the request for bail-out from government by the banks chief executives, Adeyemo observed: “I am not against bail-out of the banks that we have in Nigeria. My worries border on the unethical conducts of the banks that rather than focus on dispensing professional banking service would rather be engaged in all sorts of things like printing, security guards, stock-broking, estate developing, recharge card sale, telephone handset vending, etc; while neglecting its core functions of banking.  The bail-out will certainly salvage the economy while at the same time reinforce citizens’ confidence.  However, I am against allowing some of the present day fat-cat cocky executives from benefiting from their fraud and corrupt malpractices after ruining their so-called vast empires.

“I can tell you that things have become so bad that some ranking officials of some banks have started moving their own deposits away from their own  banks to some of the first generation banks. On the whole I see that just about six banks of the 24 operating banks would cross the healthy mark if a thorough examination of their books is conducted today. So, I need to warn Nigerian depositors to start conducting their own due diligence on their  banks.

“Depositors should start asking questions, they have to interact with other customers to know how the bank is attending to them. Do they have issues with facilities, are their issues with immediate payment of withdrawals and others.”

Adeyemo said in the light of saving depositors’ fund, he subscribes to a Federal Government initiated bail-out of the banks, but has his own suggestion on how it should be applied: “I subscribe to the Federal Government buying preference shares of maximum 30 per cent into the banks on a temporary basis of say a five-year period. The FG must not, however, attain majority shareholding in the banks.  This way, the board of the affected bank would be restructured with the Federal Government’s representatives on the board on a minority scale.  The Government may then sell off their investment as situation improves.”

Adeyemo noted with regrets that if the National Assembly had heeded his warnings when he petitioned it to probe banks, perhaps the present time reality would have been avoided: “It is a sorry case that the chicken is coming home to roost so shortly.  I candidly recall that it was in November 2007 that I forwarded two petitions to both the Senate and House of Representatives warning that with the present bad and precarious financial state of health of these banks, there was a need to institute a probe into their activities, otherwise the Federal Government may be required to bail them out in due course.  This petition led to the probe of the banking industry in May/June 2008 until the probe process was compromised.  I believe that if the probe had been conscientiously and painstakingly executed, maybe we would not find ourselves in this mess.”

AFTERMATH OF FALL-OUT WITH DANGOTE:FEMI OTEDOLA SEEKS ALLIANCE WITH JIMOH IBRAHIM

A re-alignment of business interests and affiliation is believed to be in the offing and it involves three of Nigeria’s most celebrated billionaires. In recent times, the news have made the rounds of a business skirmish between Alhaji Aliko Dangote and Mr. Femi Otedola, both had been known to be buddies and have been reported to have jointly engaged in business ventures over the last five years.

The chummy relationship between the two, however, is believed to have been embroiled in suspicion and a brickbat of sort on account of Dangote pitching his support for his kinsman, Sayyatu Dantata over the acquisition of the majority shareholding in downstream Chevron Nigeria Plc, a shareholding in which Otedola had confided his interest in Dangote.

Reports close to Otedola and Dangote indicated that on the heels of Dangote’s preference for Sayyatu, Otedola might have to go his way in matters of business relationship with Dangote, the officially profiled richest man in Nigeria.

But then, in the context of doing business in Nigeria where government influence is all pervading, a businessman must understand the act and intricacies of balancing power plays by networking with power players.

“Of course, you know that political power and influence determine a lot of things in business in Nigeria,” a source told FORTUNE & CLASS Weekly. “So to survive in business at the level these people operate, you have to know the right people and understand how to continue to pander to their needs. The relationship between Otedola and Dangote was principally predicated on this kind of facilitation. For instance, during the presidency of Chief Olusegun Obasanjo, the two had enjoyed some privileges of state support because Otedola enjoyed the favour of Obasanjo. Obasanjo extended his favour to Dangote because he was friend to Otedola, who is his Yoruba southwest kinsman. And since Nigeria’s democracy has a peculiar command structure, everybody within the circle of the Obasanjo’s presidency had to extend all the courtesies of power to the two businessmen,” the source explained.

With the shift of power to Northern Nigeria, our source reasoned that the centre of power influence revolves around a core group of Northerners and until the disagreement that unravelled the relationship between Dangote and Otedola, the two had farthered their business interests by acting together to relate with individuals that influence the power structure.

“With the parting of ways with Dangote, Femi must naturally form new alliances because he has grown quite massively in the business sector. And if I must tell you, the fact is that not many people are happy with big time players if they are not within the circle of the influential,” FORTUNE & CLASS source reasoned.

According to reports gathered last week, there are strong indications that Otedola, who owns Africa Petroleum, one of the country’s largest downstream sector operations and other long list of A-class business entities, might be gravitating towards Barrister Jimoh Ibrahim, the billionaire core investor in the nation’s biggest insurance concern, NICON Insurance.

“I understand that the two have started talking and I think it is natural. Barrister Ibrahim has survived a most violent onslaught by some adversaries in business and government. Do not forget that his business troubles started during the presidency of Obasanjo despite the fact that he, like Obasanjo, is from the Yoruba speaking southwest. This did not stop the presidency from contending with him on a number of issues that culminated in his sacking from NICON where he had invested so much. But as it turned out, he was able to resolve all the contentious issues and regain control of the company. And to top it all, he became quite friendly with the current president, Umar Musa Yar’Adua,” another source gushed.

“I think the two would find common ground to relate,” the source further asserted. “This is because the two of them are involved in the downstream sector of the oil and gas sector and are adventurous enough to pursue their business expansion dreams vigorously. I can say that very soon, the two of them would become a pair if the effort of elders facilitating the alliance is successful,” the source said.

EXPERT DECRIES BANK CHARGES ON RETURNED CHEQUES AS ILLEGAL

Mr. Ori Adeyemo, a forensic accountant and crusader for streamlined bank charges, has decried bank charges on returned cheques and described the fee deducted from accounts in consequence of returned cheques as illegal.

“It is trite that by virtue of Section 10, subsection of the defunct Central Bank of Nigeria (CBN) Bankers’ Tariff, a bank is allowed to charge N1,000 for a returned corporate cheque whilst debiting N300 for a returned individual cheque (to be borne by the drawer),” Adeyemo said.

“It is also true that by the provision of Section 11, subsection 6 of the subsisting CBN Guide To Bank Charges effective January 01, 2004, a returned cheque attracts 0.5 per cent of amount, maximum N5,000 (to be borne by the drawer).

“In both cases,” Adeyemo argued, “the CBN guidelines stipulate that only the drawer of a cheque should be penalised for a returned cheque and not the supposed beneficiary (who never took value for consideration anyway.)  Unfortunately, we all know that this situation is not true in Nigeria as banks whimsically charge both the drawer and drawee for a returned cheque, thereby amounting to double-jeopardy especially for the drawee who never took any benefit.”

 Affirming the contradiction in the statutes relating to fees sanctions as a result of returned chques, Adeyemo said: “I must emphasise that the CBN is wrong to have inserted returned cheque fee into the defunct Bankers’ Tariff as well as the subsisting CBN Guide To Bank Charges being in crass breach of the Dishonoured Cheque (Offences) Act of May 20, 1977, which makes it a nullity for the following reasons:

a.     That a returned cheque is a criminal offence and not a civil offence.

b.    That only the injured party (that is, the supposed beneficiary) has a right to complain about a returned cheque to the Nigeria Police or better still, the Economic & Financial Crimes Commission (EFCC) and definitely not a bank.

c.     Returned Cheque Fee is a penalty which only a court of competent jurisdiction can impose on a citizen of the country. 

d.    No party to a contract can impose any form of penalty/fine on other parties to a contract as doing so is repugnant to natural justice.  

e.     That a bank has no special or pecuniary interest in a returned cheque being just a clearing vehicle for a deposited cheque.

f.     That Section 9 of the subsisting CBN Guide to Bank Charges, clearing of cheque or draft in Nigeria is free.  Moreover, no bank can charge any fee for collecting any deposit in Nigeria.

g.    That according to the Dishonoured Cheque (Offences) Act of May 20, 1977, upon conviction; an individual is liable to two-year jail term without an option of fine while for a body corporate a penalty/fine of not less than N5,000.

h.     Only the Attorney-General of a state (without excluding the Attorney-General of the Federation) has a right of criminal prosecution of a defaulter and definitely not a bank.

i.      That Section 25 of the Interpretation Act (which provides that a person shall not be punished twice when guilty of an offence under more than one enactment) shall apply in respect of offences under this act.

j.      Since this Section 11.6 of the subsisting CBN Guide to Bank Charges as it relates to a bank charging its customer Returned Cheque Fee is in breach of the Dishonoured Cheques (Offences) Act being a legislation of the National Assembly, the Dishonoured Cheques (Offences) Act will prevail.

“In simple language, I am saying that since a bank is not a party to a returned cheque, then such bank cannot lay claim to it.  We should cast our mind to the law of privities of contract wherein it is clearly stated that only parties to a contract can sue for the enforcement of a contract and not even those in whose interest the contract was made,” Adeyemo insisted.

“You will agree with me that the initial beneficiary of a clearing cheque is the bank that went to clear the cheque that should have taken custody value for the drawee but that alone does not give room for the bank to lay any claim on the money since the bank is not the real beneficiary of the fund but just a mere custodian.

“Therefore, I cannot but submit that the present CBN Guide to Bank Charges, is fraught with illegalities to the crass detriment of bank customers thereby allowing banks to smile away at all times, leaving the customers short-changed.  In fact, this was one of the issues I had wanted to address in May 2008 at the House of Representatives’ probe of the banking industry until it was fraudulently compromised by the banking cabal working in concert with the then leadership of the House Committee on Banking & Currency.”

Adeyemo argued that on account of the subsisting convention of fee sanctioning for returned cheques, he had been demanding a review of the CBN Guide to Bank Charges: “I cannot but request for a thorough review of the CBN Guide to Bank Charges wherein the opinion of every stakeholder in the industry will be accommodated as against the present one which was drafted by Mr. Jim Ovia, the Zenith Bank Plc Managing Director and so wholesomely adopted by the CBN without any input from the bank customers, thereby skewing the graph in favour of the banking industry.

“In simple words, I submit that it is totally illegal for any Nigerian bank to penalize a customer for a returned cheque, as doing so will translate to the fact that the banks have become laws unto themselves, having illegitimately taken over the job of the judiciary,” Adeyemo submitted.