Liberian President Commends Ecobank’s Developmental Support

The President of Liberia, Ellen Johnson Sirleaf has commended Ecobank, describing the bank as a true partner in the reconstruction process in Liberia .

President Sirleaf, who was speaking following the Banker Award that recognized Ecobank as the “Best Bank in Liberia ” said the award is richly deserving, as it would send further signals to the international community that Liberia is ready for business and that the government is doing all within its reach to protect the business environment in Liberia .

According to the Liberian Leader, Ecobank has proven that Africans have the expertise and capacity to provide banking services comparable to what is obtainable in any part of the world.

She commended the bank for its expansion initiative which she said is providing financial access and a source of great and immeasurable relief to rural inhabitants. According to her the bank’s support for microfinance activities which is not common amongst commercial banks is another high mark the bank continues to score within the sector in Liberia.

Speaking earlier, the Managing Director of Ecobank Liberia , Mrs. Morenike Adepoju thanked the Liberian Government for creating the enabling business environment that has led to the bank’s ability to provide value-adding products and services to the bank’s publics in various parts of Liberia and subsequently resulting to international recognitions.

She assured that Ecobank will continue to march forward in strides, scoring a first on all performance indicators to the pride of Liberia and its people.

Ecobank Liberia was one of ten Ecobank affiliates within the Group that emerged winners amongst the 148 countries recognized for the 2008 Bankers’ Awards, thereby putting the country on the map of world class banking institutions.

The Banker Awards is often described as the most esteemed and credible banking industry award in the world.

Offshore Professionals Queue for Jobs in South Africa

Recruitment agencies have reported a dramatic increase in the number of international professionals and South Africans living abroad who are seeking employment in South Africa after the waves of retrenchments that have hit the US and Europe.

Penny Chaskelson, the managing director of The Personnel Concept, said the agency had seen an increase of between 20 percent and 25 percent in international professionals inquiring about employment opportunities in South Africa.

“There has been a dramatic increase in responses from all over the world, and that is first and foremost a result of the global financial crunch,” she said. “However, this has also been exacerbated by the fact that some professionals were already happy to move to any location for the right job.”

Georgina Barrick, the managing director of Renwick Talent, said the group had seen a jump in inquiries about employment opportunities in South Africa since September.

Some were from South Africans who had been working in financial services outside the country, mostly in the investment and banking sectors.

“We are receiving about five applications a week and about two-thirds of these are South Africans,” she said. Approaches had come from London and other European capitals, but there had been sudden interest from Egypt, with four inquiries from that country last week.

Martin Westcott, the chief executive of Production Engineers Corporate Services, said the trend of international professionals seeking jobs in the country was logical because the South African economy was still showing some growth.

He said the trend had come at a time when South Africa needed to recruit more skilled professionals to reduce inefficiencies across the spectrum.

“This is as a result of skills shortages. Some companies were even failing to realise their employment equity targets, due to a lack of appropriately skilled personnel.

“The arrival of these personnel in the country could provide us with the opportunity of skills transfer,” he said.

In apparent validation of this trend, the Umsobomvu Youth Fund said that it had taken advantage of the situation by recruiting 20 skilled professionals who would be partnered with 40 young South Africans to develop their skills.

Malose Kekana, the fund’s chief executive, said 15 skilled professionals had been identified. They would be partnered with local youths “with the purpose of grooming them for us. We have put the effects of the financial crisis to good use.”

Kekana said the professionals would not have great cost implications for the fund, as Umsobomvu would pay only for their flights, accommodation and meals.

FORMER MD OF IDEAL SECURITIES SUSPENDED FROM CAPITAL MARKET

The Securities and Exchange Commission has announced the suspension of Mr. George Nchendo Okafor, the former Managing Director of Ideal Securities and Investments Limited from all Capital Market activities.

The suspension, according to a notice on the Commission’s website is as a result of the serious allegations made against him by the Board of Directors of Ideal Securities and Investments Limited relating to his tenure as Managing Director of the company.

The Commission affirmed that the suspension remains in force until Mr. George Nchendo Okafor clears with the Commission all outstanding issues raised in the allegations.

WHEN FIRST REGISTRARS REJECTED FIRST BANK’S CONFIRMATION

But for strident protestation, the management of the Securities and Exchange Commission might have insisted on the January 2009 deadline for the dematerialization of share certificates in Nigeria. Some investors believe this is yet a tall dream for both the SEC and investors especially in consideration of the inadequacy of the Registrars.

Because of lack of appropriate recording system, most registrars have had an automatic recourse to demanding that any investor that wished to dematerialize his or her shares certificate to first go get a bankers confirmation of his/her signature. This attestation, according to the registrars helps ascertain the authenticity of the signature.

The banks had made the confirmation requirement a money making venture, some demand for N5000 for each confirmation. However, an investor informed Fortune&Class Weekly of the shame of the process.

“I have 50,000 units of FirstBank Plc and because of the January 2009 deadline to dematerialize shares certificates I went to my bank which incidentally is FirstBank. After collecting the confirmation, I went to the office of First Registrars where I tendered the banker’s confirmation but I was shocked when officials of First Registrars rejected the banker’s confirmation from FirstBank. Seriously, I am considering writing a protest letter to the Managing Director of FirstBank,” the investor said.

ILLEGAL SALE OF AFROIL SHARES: INVESTORS WANT STRONG SANCTION AGAINST SKYE BANK, OTHERS

Some investors whose investment in Afroil Plc have been locked in as a result of the full suspension on trading placed on the stocks of the company since June last year, have called on the management of the Securities and Exchange Commission to apply punitive sanction if Skye Bank Plc, issuing house to suspended company and other individuals indicted in the alleged illegal sale of Afroil Plc shares.

The stock of Afroil was one of the cases in exemplary manipulation at the Nigerian Stock Exchange last year. Afroil was an unobtrusive penny stock as of 16 February 2007 it sold at a meager 42k. Then beginning from the day after, 17 February, it rose exponentially to a high of N27.46k before flattening out in the N20 range thereafter.

The Securities and Exchange Commission had expressed strong suspicion over the pricing activities of the stock then and had called for its suspension. The SEC conducted an investigation into the company and the stock market post listing requirements.

Details of the investigations of the SEC were worrisome. Afroil Plc was only masquerading as a listed company; it had indeed lost its legal status as a registered company because it had been wound up by an order of a Lagos court ruling on the request of the company’s creditors for receivership. Yet, for mysterious reasons, the company stock suddenly became the toast of the exchange.

SEC, according to an insider, suspected manipulation and decided to trace the whole bits of under the table deal to the issuing house, stock brokers and fund managers that had something to do with the public offer of the company.

After concluding investigation, the SEC dragged Skye Bank and 13 other individuals and corporate entities before the Administrative Proceeding Committee of the Securities and Exchange Commission, alleging illegal sale of Afroil Plc shares and other violations of the Investment and Securities Act 2007 and the rules and regulations pursuant thereto.

Other corporate entities and individuals suspected to have participated in the illegal sale of Afroil Plc shares and who are made to answer to questions by the Administrative Proceeding Committee are: Mr. Ishaq Olakunle Sanni, K.S. Fund Managers Ltd, Rita Ify Ejezie, Eghosa E. Osaghae, Gbolahan Abiodun Agoro and Alhaji Kassimu Tafida Bakori. Others are: Christopher Elukuemen Olumese, Olusola Badmus, Jonah Unigwe Ikhidero (Chairman of the company 1996/2001), Skye Bank (Issuing house) Reward Inv. & Sec. Ltd (Broker/Dealer), PSL Securities Ltd (Broker/Dealer), and Odili Okechukwu & Co. (External auditor).

The SEC had in a hearing noticed that following the conclusion of preliminary investigations into the affairs of Afroil Plc in respect of the illegal sale of Afroil Plc shares and violations of the ISA 2007 and the Rules and Regulations made pursuant thereto, it has become necessary to invite the persons listed above to appear before the Administrative Proceedings Committee of the Commission to explain their roles (if any) in the matter.” The first set of hearing, which was made between November 26 and 27, concerned investors that have been following the Administrative Proceeding Committee, called for stiff penalties for those found culpable in the Afroil affair.

HOW TO PROTECT YOUR INVESTMENT IN BEARISH MARKET

By West Africa Capital Market School

After having reflected on the fact that there is now little doubt that the Nigeria Stock Market is in the midst of a bear run and that the bear would dominate the market over a long period, experts at the West African School of Capital Market, have offered to avail capital market operator the appropriate trading strategies for the bearish market.

“Economic fundamentals do not support a swift return to an upward price trend,” the experts noted in a dispatch to operators and investors. “With oil hovering in the low $40s, there is precious little money flowing from the public sector unless of course there are draw downs from dedicated accounts to fund some sort of large scale infra-structural investment and even this will take some time to trickle through based on emergent large bets against the local currency.”

The experts highlighted eight broad approaches to managing clients’ portfolio for stockbrokers.

1. Avoid investment diversification. Diversification is a great idea in good markets as it cuts down market and sector risk. However, in a bear market, the problem is with the broad market. The broader your selling of low performers, and concentrating your investments in fewer stocks that have shown the best performance, is the way to go. Your risk is no longer corporate performance but low confidence in the overall market and so it does not make sense to be broadly represented.

2. Help clients identify and preserve core capital – you will have to trace client investments by contribution/performance to identify core capital. Let clients know that you are focused on ensuring that they remain “in the game” and are positioned for a market rebound when it eventually comes.

3. Review your website and its contents to reflect the new realities and change research recommendations from “buy’ “sell” “hold” to a “preserve”, “growth” and “aspire” type recommendations. Preserve stocks will provide growth and income necessary to preserve core capital and maintain lifestyles. Growth will beat the overall index and Aspire is for long term gains when the market picks up. Conservative clients may choose to start out with 50 per cent Preserve, 40 per cent Growth and 10 per cent Aspire and then mechanistically adjust the portfolio later.

4. Shift emphasis from selling stocks to financial planning and wealth management if you have the skills for these. Financial planning is far more defensive than wealth management which requires the identification of non-financial wealth and the setting up of the right trust structures.

5. Be wary of new investment types that you don’t fully understand. The property market, for instance, will in all probability self correct especially at the high end where oversupply and tighter bank credit is now becoming an issue. If you are just getting into property come in at the middle and low end. Avoid the Lekki-Epe axis by all means.

6. If you choose to bet against the naira, do so in an intelligent way and realize that dollar rates can crash if government so desires. You need to get an inside track on just what government thinking is. A strong dollar will cut imports in the medium term and do long term good to the reserves but this strategy might go horribly wrong. We have to wait and see.

7. Keep your people engaged as much as you can. The obvious reaction is to slash and cut and sometimes this may be necessary but rather stay positive and prepare for the bull market because it will come back and for a fairly sustained period too. This means lighter more qualified and educated personnel and wise investments in scalable technology. If you are going to sell optimism abroad then sell it at home too and stay on message.

8. How do you know when the market is recovering? You will need to get some of your people busy on creating and maintaining the A/D Line of the NSE All share. Each day deduct the number of stocks gaining from stock shedding value and graph the resultant values. This will show clearly when the broad market begins to recover.

Technically, the market is in base formation right now with small gains being matched by exits/loss capping. Traditionally, base formation is followed by a sharp and sustained movement to the up or downside. You can estimate this by looking carefully at the volume on up days and the volume on down days. The whole idea is to cancel out the noise being generated by the overall index to see where recovery is likely to begin from.

The other option to these suggestions is to do nothing and hope for the best. While hope might be a laudable trait it is certainly not an advised business strategy. We believe that the market is transiting from high volatility/high gain frontier market status to a more sustained emerging market growth type of market. Such transitions are always painful but unavoidable,” the experts submitted.

Investors Accuse Stanbic-IBTC, Chapel Hill Of Fraud In Starcom Private Placement

A row is in the brew in the community of investors, especially, among those that bought into the private placement of Starcomms Plc last year. At the centre of the uproar are two issuing houses to the shares of Starcomms Plc, Chapel Hill Denham and Stanbic-IBTC.

Mr. Adebayo, one of the investors that bought the private placement of Starcomms Plc observed in a fit of frustration that it is very evident that “Starcomms Plc Private Placement” has become the epitome of “fraud.”

“The Placement of 4.95 billion shares, which opened and closed on 3rd June 2008 at a price of N13:00 appeared so attractive to investors at that time as it was over-subscribed,” Adebayo recalled.

Apparently angered at the down-turn of the investment, Adebayo explained that: “The projection in the placement memorandum says that the company will declare a loss of N197 million at the end of 2008 financial year end. Unfortunately, the company declared a loss after tax of N1.014 billion in the second quarter and N2.149 billion in the just released third quarter result.”

Starcomms Plc was listed at N13.56 on Monday, 14th July, 2008, between then and now, the price of the share had slid to a low of N3.86.

“In fact, the price dropped consistently to N7.46 less than two months after listing,” Adebayo opined. “The question to ask now is during that period, who was selling since most investors that bought shares during the private placement still had certificates that were unverified. Could it have been the original owners dumping on new investors? Can someone please explain why the variance between the forecast and the actual result declared is so staggering? Was money being laundered? What happened to the proceeds of the placement? How much expansion has the company embarked upon since the placement?” Adebayo queried.

Another investor frontally accused the two issuing houses to Starcomms placement, StanbicIBTC and Chapel Hill Denham, a capital market operator that was recently selected as one of the market makers for the Nigerian Stock Exchange. Concerned investors argued that the two issuing houses lent their brand names to be exploited by Starcomms to defraud them.

“The placement was actually successful because Starcomms Plc leveraged on the good name and credibility of Stanbic IBTC Bank Plc and Chapel Hill Advisory Partners. But looking at the whole situation closely, it seems there is more to what we can see. It’s so obvious that Starcomms’ goal from the word go was to defraud the public,” an investor submitted.

“Another question begging for an answer is the role of the two issuing houses in this? Or did Lababidi/Starcomms Plc (Chief Maan Labadidi is the Chairman of the board of Starcomms Plc) act alone?” Adebayo asked. While trying to establish a connection and possible connivance to defraud investors, Adebayo questioned the appointment of Mr. Wale Edun, Chairman of the board of Chapel Hill as a non-Executive Director of Starcommc Plc.

“I want to question the connection between the sudden appointment of the Chairman of Chapel Hill Advisory (Mr. Wale Edun) as a non-Executive Director of Starcomms Plc? Have the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) been asking any questions? How have the professional parties to the placement been able to comply with post-listing compliance requirements? Why are the regulatory bodies keeping mute about this great injustice to investors?” Adebayo queried.

Giving further revelations of the intentions of the Chairman of Starcomms to approach the capital market to raise funds for another company that he has interest in, Adebayo said:

“We hear that the same Lababidi now wants to bring another company to the market (Supreme Flourmill Ltd); this only shows that this individual thinks we are all fools in Nigeria. Please beware of this offer,” Adebayo warned other investors.

Commenting on what investment in Starcomms had turned to, Mr. Ajisafe, another investor opined:

“This is a serious matter and I have decided to sensitise everyone on my list thereto. This is, no doubt, a huge fraud and I am of the opinion that the SEC and NSE should stand indicted in the whole affair! Also, the two issuing houses, I believe, have an explanation to make to unsuspecting investors because investors relied on the strength of their analyses to buy the Starcomms offer. This is shameful and I submit that the matter be investigated and all those found to be culpable be treated in line with the IST sanctions. They are no better than Madoff! Moreover, investors should be wary of issues by the concerned issuing houses (Chapel Hill and StanbicIBTC),” Ajisafe submitted.

Another investor said of the suspicion of collaboration to rip investors on the Starcomms’ private placement.

“It is amazing what our corporate gurus are doing to stay on top of the ladder, gone were the days when our industrialists gave to charity, now our so called industrialists have board meetings and make strategies on how to use their companies to defraud the masses. We are all talking about Madoff but oblivious to the presence of individuals perpetrating worse atrocities right here in Nigeria. We all know that hedge funds are not regulated, and that probably explains why they are able to get away with all they do. How do we justify or indeed explain the flagrant act of fraud against the public in a regulated market? Starcomms came into the market to raise capital, many unsuspecting investors rushed at it, expecting high returns on their investments; it is a pity that it is now a different story entirely. It is obvious that being a politician is not the only way to “rush” up the ladder of wealth; the capital market is an untapped goldmine to fraudulently enrich people who are influential in the business and financial sectors, thanks to our Indian “friend.”

In a statement made available to Fortune&Class Weekly by officials of Chapel Hill Denham, one of the issuing houses to the Starcomms private placement, the issuing house noted that “several investors never read the PPM or all the documentation made available at the time of the placement and many bought through brokers and friends, who were among those invited and never actually saw any documentation and never understood that it was sold as a growth stock, which would make a loss in 2008 (albeit, a smaller loss than we expect to see for 2008), a profit in 2009 and pay dividend in 2010.”

Chapel Hill Denham further asserted in the statement that, “What essentially has happened is that a completely unforeseen heavy subsidy led competition by Visafone and Telkom Multilinks, has meant Starcomms spending about N2 billion more on subsidies than was projected. Essentially, a line with a handset costs about $45 each and it was being sold at N10 each. Starcomms board and management felt that it did not yet have the scale from a subscriber perspective at 1.2million gross subscribers, to stay out of this battle for subscribers.”

The statement further explained that Starcomms had over the years to over 2.5 million gross subscribers, higher than the business plan but at a hefty cost.

“This subscriber’s base will be beneficial this year and beyond, as you can imagine that over two million subscribers spending about $15 per month should generate revenue of about $350 million in 2009. This is not a business in distress by any circumstances,” the Chapel Hill Denham statement observed.

The management of Chapel Hill Denham also explained that contrary to the rumour being spread, the founders, the Lababidis actually increased their holding during the private placement, spending about $17million directly and indirectly, through their other businesses.

“The only shareholders who sold during the placement were the two private equity firms, Actis and ECP, for whom the funds they invested from had come to the end of their life and had to return the money to their investors and partners. All of these were disclosed to investors in the private placement,” the statement noted.

No official of Stanbic-IBTC was available for comment.