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. 

ETB: SHAKE-UP IN ADENUGA’S BANK

Over the last six months, staffers of ETB, the bank owned by Dr. Mike Adenuga Jr. have had had to resume work with the burden of uncertainty weighing over their shoulders until close of work. Reason for the anxious moments at the workplace is the report of periodic letters being dispatched to personnel of the banks conveying management’s instructions advising the recipients of such letters to voluntarily retire from the services of the bank.

“Nobody is sure of what would happen during work hours,” a staff of the bank told FORTUNE & CLASS Weekly. “The fact is that we don’t know exactly what is going on; I am aware that the bank has been employing new people but at the same time is confounding that some of the people even, we staff consider to be very good at their work get these shocking letters of compulsion to disengage. So, how can one be at ease when one is at work with such things happening to co-workers and one has not made alternative employment arrangement?” the staff queried.

FORTUNE & CLASS Weekly gathered that a number of staff at the managerial level, have, however, taken their fate in their hands by resigning their appointments to avoid the unpleasantness of a sudden ditch by the bank’s management.

“I think those are that are lucky to quickly secure employment with other places are smart enough, if I have the option I will do the same. You can imagine people that had put between 10 and 16 years into the service being unceremoniously given the boots like that? Everybody would naturally be jittery,” another ETB’s staff echoed

“In fact, when one of the much respected senior officials at our branch got the letter informing him to voluntary retire, we were aghast. At first, we wanted to protest but unfortunately we did not have the right platform to do that. Then we told him that he should write in his retirement letter that he was forced to retire and explain in the letter that he had had a clean record of service delivery to the bank. When the concerned staff called his contact at head office of what he intended writing in his letter, the man at the other end said they won’t accept the letter if it is written that way. It’s really so frustrating,” another staff confided.

Mr. Abdul Funsho, Head Corporate Communications, however, insisted that nothing extraordinary was happening at the bank.

“The bank is only repositioning and restructuring for efficient service delivery. The bank is employing more hands by the day. So, it is natural that going forward the bank has to look for skills that match the vision and goals of the bank,” Funsho said.

LET THE MARKET BE!

 

Editor, Fortune&Class Magazine

Editor, Fortune&Class Magazine

What dominated my thoughts all through the slur of last week’s scandalous heehaw of denials of appointment of market makers for the Nigerian stock market and a supposed N600 billion bail-out, was to simply carry my face, literally speaking, away from official confusion brazenly hoisted on Nigerians by people in government.

That many Nigerian investors nurse a heavy heart in contemplation of the likely consequences of the gathering threat of implosion that may throw into the abyss, their hard earned money, invested, in the first instance, through massive urging by stock market operators and regulators, that had assured of the virility of the market, should be enough to make those in authority respond to issues bordering on matters relating to investment with a stronger sense of official responsibility.

 

When a number of respected daily newspapers published the story of the appointment of market makers and the N600billion bail-out, a buzz had generated in the investment community. Loud arguments on the impact or otherwise of the bail-out plan all that had commenced in earnest. But it was to last a mere 24 hours. Next morning, newspapers banner headlines announced that the Federal Government, the Securities and Exchange Commission plus the Central Bank of Nigeria had not even pondered the thought of a bail-out. It was an anti-climax, a cold water drenching anti-climax at that.

Yet, I reasoned that Nigerians deserve an explanation, an official explanation for the recklessness. Of course, this has nothing to do with the media houses that published the stories, as a journalist, I should know. The papers quoted sources at the Nigerian Stock Exchange, the story in fact, revolved around the conclusions of a marathon meeting of the Council of the Nigerian Stock Exchange.

It was not enough to simply make a rebuttal of the story, the appropriate authorities should have gone farther to inform the public of an intent at investigating the source of the rumour (as the news turned out) and of course, assure the pensive investing public of the seriousness attached to the investigation. At times like these, information has become sacred and the sanctity of it should not be eroded. In the first instance, it was the lack of credible information and perhaps, more troubling, the inclination for close circuiting that heckled the Nigerian stock market into the awkward state that it had degenerated.

Openness rules the market; it is at the heart of investors’ confidence, the deficiency of which has maligned the status of the market. It is sad that we won’t, in the character of institutional arrogance that had defaced relationships with the public, get to hear anything about the shenanigan that led to the breaking of that news. You can imagine what it would do to investors’ confidence to know the motive and goal of the people that held the meeting where resolutions concerning market makers and bail-out plan were made.

And to think that the Council of the Nigerian Stock Exchange was at the centre of these suggestions should be humbling. Though the SEC had announced it had nothing to do with it, yet, as the apex regulatory authority of the market, I guess the SEC should ask Prof. Ndi Okereke-Onyuike what her intentions were and why she did not get the input and approval of the appropriate authorities before sneaking the resolutions of her Council meeting to the public place.

More rubbish imagination of some funny, less thinking officials would still certainly assail us in these trying times. Policies would be made in the heat of anxiety without the corollary aggregation of the implementation procedure, it is the way of Nigerian aficionados, and the stock market is not insulated from this. The frustration of expecting so much from the policy-measures introduced by the egg-heads that gathered in Abuja these past August 26, is hurting enough. If I have my way, I ‘ll suggest that they just let this market be, and for the good Lord’s name sake, will somebody tell those big people that the one per cent limit on the fall of stock price is doing more harm to the market?

Let the market fall of its free will, it’s a reflection of the opinion of investors of the market and clearly attests to the value the market should be, as all things natural respond, when it gets to the nadir, it will generate an upward drive of its own volition.      

I personally can’t fathom the reason for the hysteria that seems to consume everyone about the present state of the market. We all saw it coming, but it suited everybody to chorus the great potential of the market when the run was going good. Turning a recalcitrant deaf ear to the admonition of concerned people that kept reminding us of the manipulations and many under-hand, under-table and a whole regime of under-something deals that were killing the market in instalments.

So, we have a burnt pot of porridge, just too bad, but then, even with the gathering storm of continued conjectures of global capital markets impacting on the Nigerian market, I still dare to insist that if the regulators can be more open in dissemination of information to the investing public, the worrisome situation of the market, can still stabilise. Nigeria and many other African countries are not in the range of the seismic undercurrent, that is at present, rocking the global market; but we can only be assured of our revival if those fiddlers and meddlers in the hierarchy of regulators, can be more discerning.

For the retail investors, many of whom, I understand, had taken flight to cash in hand or the bank, you’re doing something called market timing. It’s an implied statement that you’ve figured out the right moment to get out of stocks — and will also know the right time to get back in.

The truth of the situation is simple enough; the right time to move out of stocks was a year or so ago, before various stock indices the world over, fell by one-third or more.

If you missed that opportunity, you’re hardly alone.

But if you sell now, you’ll be locking in your losses. And once you’re in cash, there isn’t much upside. In fact, with interest rates low, you’re likely to lose money in cash, because inflation will probably eat up the after-tax returns you earn from a savings or money-market account.

A guarantee of a small loss may sound good right now. But if you’re not bailing out of stocks once and for all, how will you know when it’s time to get back in? The fact is, any peace of mind you gain by being on the sidelines now will turn into a migraine once you see how much you can harm your portfolio over time by missing just a bit of any rebound.

H. Nejat Seyhun, a professor of finance at the Ross School of Business at the University of Michigan, put together a study in 2005 for Towneley Capital Management, where he tested the long-term damage that investors could do to their portfolios if they missed out on the small percentage of days when the stock market experienced big gains.

From 1963 to 2004, the index of American stocks he tested gained 10.84 per cent annually in a geometric average, which avoided overstating the true performance. For people who missed the 90 biggest-gaining days in that period, however, the annual return fell to just 3.2 per cent. Less than one per cent of the trading days accounted for 96 per cent of the market gains.

This fall, Javier Estrada, a professor of finance at IESE Business School in Barcelona, published a similar study in The Journal of Investing that looked at equity markets in 15 nations, including the United States. A portfolio belonging to an investor who missed the 10 best days over several decades across all of those markets would end up, on average, with about half the balance of someone who sat tight throughout.

So moving to cash right now is just fine as long as you know precisely when to get back into stocks (even though you didn’t know when to get out of them).

At some point, stocks will indeed fall enough that investors will remove the money from their mattresses and put it to work, causing prices to rise significantly. But, as Bonnie A. Hughes, a certified financial planner with the Enrichment Group in Miami, put it, there won’t be an e-mail message or news release that goes out when this is about to happen. It will be evident only afterward, on the few days when the market surges.

WILL THE STOCK MARKET EVER RECOVER?

Many investors have sat and watched in bewilderment as the value of their stocks plummeted, a reason I have been asked over and over if the stock market will ever recover from the losses that have been accumulated over the past eight months. To be specific, investors have lost nothing less that three trillion naira in terms of paper losses alone. I said paper losses because the losses you see in your portfolio are not real until you give a sell order to your stock-broker, stocks are volatile assets whose value can change within a few trading days.

REASONS FOR THE PERSISITENT DECLINE

 1.   LOW INVESTOR CONFIDENCE: The bearish market which started in March has eroded the confidence of many investors, especially, those who entered into the stock market within the past two years. The peculiar thing about these new investors is the fact that a lot of them see the stock market as quick money making venture, and as you know, some of them have never witnessed such a long bearish period as we have witnessed within the past few months. It is also noteworthy that several investors had just begun to recover from the losses they sustained from wonder banks like Nospetco, Sefteg, etc; in 2007. I remember that such investors were condemned for being too greedy by stock analysts and they were admonished to limit their investment to stock market alone. So, at the beginning of 2008, we experienced a massive exodus of investors from the wonder banks to the stock market, but alas, the stock market has been crashing which have made such investors to resign from the investment world. This is no good news for all stakeholders in the market because all over the world, the confidence that investors have in a market determines how successful that market is since they are the ones who move the imaginary hand of demand and supply at all times.

 2.   POOR IMPLEMENTATION OF POLICIES: Our regulatory agencies should take one or two punches for the current situation of things because they have been slacked in their approach to recent developments in the market. A stakeholders meeting was finally called on the 26th August to find solutions to the current situation after six months of a bearish market. Since then some of the policies that were identified have either not been implemented or simply relegated to the background. The most important of this is the creation of a stabilization fund to stem the bearish trend whenever necessary, I don’t know how you look at it, but from my point of view, I think this issue should have taken priority over other policies because without funds that are needed to buy stocks, the stock market can simply not move, it’s as simple as that.

Dear friends, gone are those days that fundamentals count and investors are motivated to buy shares because of good quarterly and audited results published by companies. Investors are not moved by results again and if you want to contradict this argument, check what has happened to the likes of Fidelity Bank, Oceanic Bank, etc; since they declared their fantastic results. The truth is, things are not normal and desperate situations require desperate actions. In addition to this, the authorities have not addressed the investing public since August 26. I have reasons to respect the American spirit better within these past few weeks that the Americans have been hit by an unprecedented financial crisis. Within two weeks, the president of the USA, the Senate president, speaker and federal reserve chairman have addressed the American public four good times trying all they can to update Americans on the situations of things and the way forward but it’s not like that here, investors are always left guessing.

Another controversial policy is the introduction of a minimum one per cent drop in prices while allowing stocks to gain a maximum five per cent in a day; this has caused what some investors call a slow motion in the stock market, a situation that has made the sale of stocks even more difficult than in the past, this was supposed to be a temporary measure but I think it’s here to stay. The list of the number of inefficiencies from our regulatory agencies cannot be exhausted in one piece of article, it is better left as it is.

3.   GLOBAL FINANCIAL CRISIS: the Nigerian crisis actually preceded the ongoing global financial crisis which started in the USA with the collapse of big banks like the Lehman Brothers, Merrill lynch and WAMU. Stock markets all over the world are currently taking the beating of their lives. As a matter of fact, the Russians had to shut down their stock exchange for two trading days in September in order to arrest excessive decline in stocks. Last Thursday afternoon, I saw some investors protesting in the legislative house in Hong Kong because of the losses they have made on their portfolio. Don’t mind the CIBN and CBN which recently came out to say that we are immune to the global financial crisis; the truth is that we are not immune and I will state my reasons.

First, recall that we had touted the entry of foreign institutional investors who were planning to come into the Nigerian market as one of the factors that will lead to a bullish market in 2008, but at present, the JP Morgan, Merryl Lynch, or Barclays of these world won’t come into the Nigerian market for now because they have serious problems to contend with back at home. In fact, Charles Soludo, Governor of Central Bank of Nigeria recently shifted the blame for the recent market drop to some of these foreign investors who have pulled their funds out of the Nigerian stock market.

Despite all these challenges, it is not all gloomy for the Nigerian market because there is always light at the end of the tunnel, this market will definitely recover soon and the road to recovery will form the central theme of my article in the next edition. Watch out for it.

Delay of Public Offer Returned Money: Wema Registrars Accuses Access Bank of Forgery, Manipulation

Cover design 38

Cover design 38

Mr. Gbenga Oyebode (SAN) Chairman of the Board of Access Bank Plc was intent at justifying his bank’s decision to change its registrars, so, he announced to shareholders gathered at the venue of the bank’s 2008 Annual General Meeting that because his bank was dissatisfied with the services of its former registrars, Wema Registrars, over the handling of its last public offer, Access Bank decided to jettison the registrars services of Wema Registrars for a new registrars firm, United Securities Limited.

That public condemnation of the services rendered by Wema Registrars sent a surge of outcries through the ranks of personnel at Wema Registrars culminating in a formal protest to the management of Access Bank and a threat to head for the court of law if the libelous condemnation of Wema Registrars as contained and read by the Chairman of Access Bank at the last AGM was not retrieved and apologies offered. Wema Registrars threatened to sue for a redress of N.5billion if Access Bank refused to address its demands.

Will this be the torrid end to a business relationship that had flourished for close to a decade? Those that have followed events that marked the relationship between the bank and registrars say a legal battle may truly be imminent especially in consideration of the disdain with which Access Bank had dealt with its erstwhile registrars even up to the point of demanding an apology for the public hacking of the quality of services rendered it (Access Bank) by Wema Registrars.

“Wema Registrars was not going to make a fuss over the ways Access Bank had conducted its public offer. As far as we are concerned, we’ve done a good job of even saving them from present sanction by the Securities and Exchange Commission for the many breaches of regulatory compliance guidelines relating to public offer allotment and returned monies.” A Wema Registrars insider says.

“Of course we knew they had decided that they were going to establish their own registrars firm, this was clearly stated in their public offer prospectus, we couldn’t have been bothered, it is their right, but what I think is not right is for them to hang our reputation on a bad name in the public to justify and cover up their manipulations of their own public offer. I don’t think this is appropriate for a financial institution that wished to be respected.” The source protests.

Historically, Wema Registrars had managed registrars related functions for Access Bank since 22 December, 1997, it (Wema Registrars) was in charge of the bank’s first public offer in 1998 where the bank raised the sum of N462,000,000 mainly through 5,347 subscribers. And had since then, managed three other public offers (2001, 2004 and the now controversial 2007). Wema Registrars also handled the bank’s 2001 right issue and 2006 bond issue as well as the share reconstruction exercises between Access Bank, Capital International Bank and Marina International Bank in the run up to the consolidation of the bank.

So, why did the management of the bank’s 2007 public offer turn such a sore point in the relationship between the bank and the registrars?

Another Wema Registrars source argues that this could be adduced to the bank’s desperation to manipulate the offer proceeds and conveniently use Wema Registrars as the fall guy if the regulatory authority smelt the rat, and as things turned out, to also use their (Access Bank) own deliberate obfuscation of the offer allotment and returned monies process as good excuses to persuade shareholders and regulatory authorities of their need to change registrars.

“The fact of intent at manipulating the offer was clear enough.” The source says. “Despite the fact that the offer closed two weeks later than earlier scheduled because of an extension from the original closing date of August 29th 2007 to September 12th, 2007, the registrars did not receive the returns from Access Bank, as required, until very late. In fact, one of the returning agents to the subscription that had sold 261,849,400 units valued at N3,901,556,060 to about 4000 subscribers did not submit details of its returns to the registrars until December, 2007, just some few days to the final submission to the Securities and Exchange Commission.” The source reveals.

“Even at that, so many agents attempted to submit to the registrars much later than this date but they were rejected by the registrars, but obviously, the bank did not reckon with the breaches of the regulatory authorities, so they accepted the agents’ late returns without recourse to the registrars. This led to so much hiccups in the shares allotment process.” The source added.

Matters became rather desperate when the Securities and Exchange Commission specifically directed by a letter of January 4, 2007 to the registrars that by January 11, 2007 the dispatch of returned monies to subscribers that were not fully allotted shares they paid for.

Meanwhile, all monies raised had, at this time, being domiciled in the vault of Access Bank with direct control by the bank. Ordinarily, this should not be. A capital market veteran informs that funds raised during public offers should be the direct responsibility of the registrars until all necessary administration had been concluded on the offer.

“It is at this point in time that the issuing house(s) would turn over the funds to the issuer that is the company raising the funds through public offer.” The veteran explains.

Issues on dispatching returned monies to unallotted subscribers became rather suspicious when, according to a source, Wema Registrars dispatched a letter to Access Bank to prompt an early dispatch of cheques for returned monies but the bank refused to even acknowledge the letter. Two other letters, one on January 21 2008 and the second on February 1, about a month after the dispatch was supposed to commence, did not elicit any form of response from Access Bank. It was not until February 15, a clear month plus four days after the dispatch should have commenced when, Wema Registars, according to inside source, was compelled to write another reminder to Access Bank, outlining the grave consequence of the breaches of regulatory requirement regarding the dispatch of returned monies that the bank decided to give consideration to the registrars request by calling a meeting for February 21, 2008 where issues of the returned monies will be ironed out.

An official that was present at the meeting intimates Fortune and Class Weekly that representatives of the management of the bank decided to change the rules of returned monies to subscribers by insisting that notifications should be made through the media that subscribers with over 50,000 unallotted shares should go to Access Bank’s designated branches to collect their refund.

“We protested that this was a clear breach, informing them that the SEC may not take kindly to the arrangement because the bank should not, in fact, be seen as having control over the funds raised through the public offer at that point in time. But then, they insisted, so we really had no choice but to concede to them. Now, at this point, a draft of the newspaper advertisement for the notice to investors was handed over to the registrars who published it on Monday, February 25, 2008 in the Punch and This Day newspaper.

“Besides, a draft of the letter informing investors to approach Access Bank directly for their refunds was also handed over to the registrars by Access Bank. This was vetted by the registrars, provisionally appended her signature and then returned the draft to Access Bank officials on the understanding that the Registrar would check with the Securities and Exchange Commission to ensure that the actions would not contravene the Commission’s directives on matters relating to returned monies.
When the registrars asked for the draft for further inputs, according to Fortune and Class Weekly source, officials at Access Bank were not forthcoming.

“We were already frustrated when, suddenly, on March 6, more than two months after the dispatch of the refund should have commenced, in fact, it should have been concluded by that date, about 4,000 letters were brought in cartons to the registrars office.” The source says.

The registrars staff were patently aghast at the letters suddenly dumped in their office by Access Bank.
“We were more than surprised when we opened one of the letters. We realised that Access Bank had, in fact, printed our official letter headed paper without discussion or approval from us and, had, gone ahead to print the draft letter we thought still needs some inputs, on the forged letter headed papers of Wema Registrars.

“The clear conclusion we reached at this point in time was that Access Bank did the printing of the forged letter head paper without the registrars knowledge to cover their many breaches of the Securities and Exchange Commission’s guidelines for the refund of the returned monies. This was further reinforced by the fact that Access Bank dumped the offensive letters in our office on the same date the officials of the Securities and Exchange Commission were examining their (Access Bank) books with respect to the public offer.

“The same day they dumped the letters, we forwarded a letter of protest to them (Access Bank), copied to the Director-General of SEC, dissociating ourselves from the non compliance of Access Bank with the SEC’s regulations on returned monies as contained in the forged letters.” The source reveals.
Curiously, sensitive as this matter had turned out; the Securities and Exchange Commission is yet to take an active position on the issue. This troubles other capital market operators that had been following the unraveling of the suspected breaches involved in the Access Bank public offer.

“This is typical.” A capital market operator says. “This explains why so many subscribers to public offers get short changed. You can imagine what beneficial transaction and trades the bank would have undertaken with money that should have been refunded to subscribers for close to a year after the conclusion of the offer way back in September 2007. What is the excuse the SEC would give for not investigating this case which had been formally reported to it by the registrars that managed the offer? The apparent lethargic reactions to sensitive issues like this only lead to loss of confidence in the stock market because the exploitation of the mass of investors is obvious.” The operator protests.
An Access Bank spoke person, Mr Segun Mamora, however insisted that the bank had to be directly involved in dispatching returned monies to its public offer subscribers because it became apparent that Wema Registrars could not manage the volume of responsibility deriving from the massive number of subscribers to the 2007 public offer.

“The fact is that when it was becoming obvious that the time was running out on the schedule of returned monies for the offer subscribers that were not allotted, we had to call a meeting where we met with the Registrars. After evaluating the situation, we all agreed that Access Bank should assist Wema Registrars in the dispatches. A letter was drafted which the parties agreed to and we undertook to dispatch them as agreed.

“There is no issue involved here, Access Bank and Wema Registrars have both gone before the Securities and Exchange Commission to explain the matters involved and it has been resolved.”

[Won’t you rather join FORTUNE&CLASS BUSINESS CLUB on Facebook to discuss with real people?]

WONDER BANKS TALE OF WOES IN KADUNA

Still grappling with the suitable strategy to refund thousands of investors money trapped in 38 so called wonder banks in Lagos State and other parts of South West Nigeria, another rash of failed investment schemes is in the making in Kaduna State.

Some variants of failed investment schemes in Lagos and other states in South West Nigeria have found operating havens in Northern States after throwing thousands into desperation on the heel of the close down of their operations by the Securities and Exchange Commission. According to reports from Kaduna State, some of these operators set up shops and had successfully drawn participants to their schemes with promises of high returns through forex trading and fixed odds.

The first of such operators to take to their heels are those behind Gold Trust International. The operational mode of Gold Trust International has close resemblance to the banished operators in Lagos. Payments to the scheme are to be made directly into a designated bank account. In the specific case of Gold Trust International, accounts were operated in BankPHB and Skye Bank. 

To participate, investors are to buy tons with one ton priced at N10,000 with a reward of N22,500 with the highest ton of 500 priced one million naira with a return of N2,400,000. The ton in Kaduna can easily translate to the slots sold by the schemes operators in Lagos. Reward are to be paid after eight to 10 operational weeks, just as it was promised in the Lagos and other South West schemes.

 Investigations have, however, revealed that the operators in Northern Nigerian cities like Kaduna have become smarter. Rather than wait till the bubble burst for the scheme and most likely get arrested, as soon as the operational weeks were getting near, they closed shop and took to their heels. Most of the investors that participated in the scheme are simply left confused.

As things stand, it may seem that the Securities and Exchange Commission have been caught napping despite its exposure to the way the schemes operated in Lagos and other South West States. It may even become more difficult to refund investors in Kaduna State because there are no accounts to be frozen with investors being hopeful of a refund based on the money retrieved from the bank accounts of various operators as it is being expected in Lagos. The worrying fact is that the operators in Kaduna and other parts of the North had cleared their bank accounts and flee with their loots.

Does this mean that the SEC does not have a monitoring that would be proactive enough to locate and truncate the operations of these wonder banks before they start defrauding people?     

“It is the responsibility of the Securities and Exchange Commission to monitor the investment community and be alert to the flourish of any form of investment scheme that does not conform to the requirements of the regulatory authorities.” A capital market operator said in response to the growing fear of the fraudulent activities of wonder bank operators that had found easy preys among many investment minded Nigerians in Kaduna State.” A capital market operators responded

“When there is a massive number of victims of illegal investment schemes as happened last year in Lagos and other part of south west Nigeria, my conclusion is that the Securities and Exchange Commission has not been up and doing in constantly monitoring the environment. Part of the law asserts that any form of scheme involving money and monetary reward for participation must be registered with the Commission, you can ask what effort the Commission staff have made to probe the activities of these schemes which products are usually brazenly advertised in newspapers and publicized through posters and banners in urban cities like Kaduna.”

When Fortune and Class Weekly checked with the Commission office, Mr. Oloyi, the Commission’s spoke person was not available, however, an official who refused to be named said the Commission is yet to receive any form of complaint relating to the activities of wonder banks in Kaduna State.

Customer Protests e-Banking Fraud at GTBank

 When Mr. Friday Musa, made the extra effort to track sums of money allegedly illegally transferred from his account with GTBank to two accounts with the same bank, he thought he had resolved his banking woes that had made him about N1million poorer. The resolution of his tiff with the bank over the illegally transferred fund was no near resolution even as he presented argument that since there were evidence that the money fraudulently transferred from his account can be tracked to accounts within the bank should have made it easier for the bank to investigate the fraud and refund him his money accordingly.

Musa’s one million naira travail commenced this past Sunday, 6 July, 2008 when he noticed that his email password was not functional. According to Musa, he had rushed to the Opebi-Ikeja branch of the bank where he usually conducted his banking services, on Monday 7 July, 2008, to inform the appropriate official of his fears and suspicion over the non functionality of his email password.

“I was directed to an officer in the bank branch who took my complaint after which he gave me an update form for a new email password.” Musa said. “I had sincerely thought that the email password malfunction was just a mere glitch so I thought nothing of it after I had filled the update and was rest assured the password would have changed.”

“But three days there after, I was at the bank to make some withdrawals from my account only to be told I could not make withdrawal of the sum I required. I was told that four transactions involving withdrawals had been illegally conducted on my account via the internet banking platform of the bank, even as I was informed that the email password change that I had earlier requested had not been effected.”

The simple explanation of the banking troubles of Musa is that he had fallen victim of e-banking. e-banking is supposed to be a convenient banking platform that enables a bank customer to transfer funds at anytime of the day from his account to another accounts or other accounts.

Musa said he did not make such transaction and was even more bewildered when no SMS Alert of the transactions was sent to his mobile phone as it is the practice with GTBank.

Musa’s account was systematically raided between Friday 4 July, 2008 and Sunday 6 July 2008. Naturally, Musa took issue with the bank through a letter dated 10 July 2007. In the letter, he insisted that he did not conduct any form of e-banking transaction during this period and pleaded with the bank to HELP him out of the trouble.

GTBank, through a letter dated 14 July, 2008 gave a terse response to Musa’s pleas. Enyinna Mbagwu and Lanre Kasim, signatories to the letter informed Musa that after conducting an investigation occasioned by Musa’s letter, they were able to ascertain that the sum of N250,000 was debited to the account on 4 July, while on 7 July, three debits were made on the account: N249,000, N250,000, and another N250,000 totaling N999,000. They explained that online transactions done on weekends and other non-working days usually have a value date of the next working day. This addendum might have been highlighted in the letter to explain the fact that the notification of the need to change password made by Musa on the made he reported the malfunction of his email password to the Opebi branch of the bank was belated.

The authors of the bank’s letter to Musa further submitted that the internet transfers were made using his profile.

“To this end, we believe your details must have been compromised…In view of the above, we regret to inform you that the bank cannot accede to your request of a refund of N999,000…Please accept our sympathy on your loss.” The letter concluded just before sarcastically thanking Musa for his continuous patronage of the bank.

But then, Musa won’t be assuaged. “See, I suspected something suspicious was going on because I had always refused the e-banking platform just as I detested using even the ATM, I like to be conservative about my banking transactions because of my fears of fraudulent issue like this.” Musa opined

“Now knowing that I may not be able to make any headway with the bank this way, I demanded that they should track the transfers. At least, that should be simple enough, this is different from a cash withdrawal where the fraudulent person would have taken the money and walked out of the bank into thin air. In this case, the bank can easily track which account the money was transferred to and identify the owner(s) of the account. But GTbank refused to budge in this regard. To effect this, I asked my lawyer to write them resulting in the lawyer’s dispatch to the bank on 22 July, 2008 only for them to reply by a letter of 7 August, 2008 that merely asserted their earlier position on the matter.

“My worry now is that I am sure the money was transferred from my account to other accounts domiciled in GTBank and all I expect them to do is to investigate these accounts and come up with conclusion. If they are reluctant to do these they should simply refund my money so I can concentrate on my business. The distraction is affecting me negatively.” Musa said.

When Fortune and Class Weekly sought to check the allegation with the corporate affairs department of the bank, the front office officials insisted that was no need to see anybody at the corporate affairs department because the matter was a private issue between the bank and its customer, and it is our believe that Mr. Tayo Aderinokun, GTBank’s MD, will not be all pleased about this.