Volume II, Issue 17

Tax Evasion! Adenuga May Have Problems With Foreign Banks

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

Fortune And Class Demands Excess Bank Charges Refund From Intercontinental Bank

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

Unity Bank Yet To Declare Corporate Result In Two Years

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

Delisted firms: shareholders rally support to recoup funds

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

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

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

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

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

Foreign Fund Managers Show New Interest In Nigerian Stock Market

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

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

Wonder Bank Fund Laundered On The Stock Exchange Through Capital Oil

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

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

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

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

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

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

Three Nigerian Banks break into Forbes List of World Biggest Companies

The year 2009 is rather an unlikely year for any Nigerian company… continues here.

EXPERTS ALLEGED STOCK EXCHANGE ENCOURAGED MANIPULATION OF BANKS’ STOCKS LAST DECEMBER

In a recap of the character of the stock market in the closing days of 2008, a market expert has revealed that the sudden but short burst of upward price movement witnessed in the banking sector of the Nigerian Stock Exchange in December, 2008 may not be unconnected with the efforts of some banks with December year end.

“The matter is simple enough, by December, 2008, prices of many banking stocks had fallen by more than 100 per cent of the prices at the same time in 2007. This naturally affects their capitalization as it would reflect in the financial reports, it was later we realized that some of these banks deliberately pushed liquidity towards targeted stocks, especially their own, to boost the price movement which would also reflect an impressive capitalization position in the financial report to impress their shareholders and other stakeholders,” the market expert said.

“But then, it would seem as if the short gains on some of these stocks confused some retail investors that fell prey to this manipulation. They thought the hitherto falling market prices had bottomed out (the prices of stocks have reached the lowest possible price) but they were wrong. The upward swing was artificial and they bought into it only to be held in that position as prices continued to crash,” the expert confided.

Finally! Arisekola takes control at FirstBank

Arisekola - a turban in the bank?

As published in the Sept. 28, Issue 33. Uploaded by ol’Victor Ojelabi.

Public attention, especially in the investment and banking sectors, have been riveted on Mr. Sanusi Lamido Sanusi, FirstBank Plc’s Executive Director, Risk and Management Control, whose appointment as the Managing Director-designate of FirstBank Plc was announced about two weeks ago.

For insiders of the bank, however, the board’s ratification of the appointment of Sanusi may not be without the deft hand of business mogul, Alhaji Alao Arisekola. Top level insiders confided that the elevation of Sanusi, an economist turned banker, was in consequence of a balancing act necessitated by Arisekola’s desire to further his interest in the bank.

A respected source in the bank’s senior hierarchy observed that Arisekola who holds substantial interest in FirstBank may have, by rallying the support of members of the board for the appointment of Sanusi who takes over from Mr. Moyo Ajekigbe who retires as the bank’s Managing Director in December 2008, he (Ariskola) would have positioned Dr. Ayoola Oba Otudeko, currently a non-executive director of the bank to assume the influential office of the Chairman of the Bank’s Board of Directors.

“Though FirstBank is not inclined to consider issues in appointment or other decision making process on grounds of ethnic origin or affiliation, it is obvious that a bank with the shareholding character and size of FirstBank, creating geographic balance in official appointment and occupation, may be necessary once in a while,” a source in the bank, said.

“Of course, in the appointment of Salisu, he is highly exposed to the rudiments of modern banking and therefore deserving of his designated posting, but again, don’t forget that there are other highly skilled executives in the management cadre of the bank who could have been made the Managing Director, but it would not have been appropriate in the circumstance because Alhaji Umaru Mutallab, the current Chairman of the Board of the Bank, who is of Northern Nigerian extraction like Sanusi, would also be stepping down from that capacity as soon as he attains the age of 70,” Fortune and Class Weekly source, said.

According to our source, Arisekola, who is believed to be the name behind the large shareholding indirectly held by Oba Otudeko in the bank (Otudeko holds the largest shares of the bank, 2.46 per cent, indirectly, before the bank’s May-June 2007 public offer) decided to show his hands in who becomes who in the bank’s hierarchy.

“It is natural that if he wants his man (Otudeko) who hails from the Southwest to step into the shoes of Mutallab, the office of the bank’s Managing Director must, of course, go to the North,” Fortune and Class source, reasoned.

“It’s like taking control from behind the scene which I really don’t have any problem with. The Managing Director-designate is a superb professional and has shown himself to be a worthy scholar with an active mind on public and religious issues. I tell you, this may be the next level of evolution of CEOs of large private sector holdings like FirstBank. CEOs that are not just limited to their professional callings but are willing to contribute to the debate on developmental and other ancillary issues in the country, this, I believe from my reading of Mr. Salisu, is his inclination. On the other hand, If eventually Oba Otudeko assumes the office of the board’s chairman, I am assured of a well-heeled board room giant as the corporate governance face of the bank. Now, that is like benefitting from the best of two worlds,” another Fortune and Class Weekly source said.

Meanwhile, a statement from the bank has hailed the succession plan of the bank as being a furtherance of the bank’s corporate governance practice. The statement notes that Sanusi will be understudying Ajekigbe, with a view to assuming office in a seamless manner. “As is well known, the bank’s corporate governance posture has won it much respect and awards both locally and internationally, the appointment is expected to take effect from January 1 2009.”

The new managing director is coming from a background of championing remarkable developments in the bank’s enterprise, risk and management control mechanisms. He was General Manager at United Bank for Africa Plc (UBA), where he anchored the transformation of the previous Credit Risk Management Division into an Enterprise-Risk Management sector and spearheaded UBA’s Basel 2 focus by establishing the framework, policies, processes and systems necessary for compliance with the guidelines of the new capital accord.

Sanusi graduated with a B.Sc. in Economics from Ahmadu Bello University (ABU), Zaria in 1981 and was later in the M.Sc class and started his working career in academics, teaching undergraduate Economics (1983-1985) at the Ahmadu Bello University. He then proceeded to a banking career, first with ICON Limited (merchant bankers), where in a period of about seven years he gained wide experience in Issuing House activities, Financial Advisory Services, Privatization, Debt-Conversion and Credit and Marketing, before joining UBA.

Sanusi is expected to provide reinvigorated leadership taking the bank to the next level, drawing from the vast experience of Mr. Ajekigbe, an industry icon in his own right. The seamless transition will ensure that FirstBank remains focused and maintains its leadership position in the industry.

Mr. Ajekigbe is retiring at the impressive peak of an outstanding career with FirstBank, spanning over 30 consecutive years, the last six of which he is serving meritoriously as Managing Director/Chief Executive. He has been able to stabilize the bank from the crisis situation which he inherited on his appointment in 2002, thus reinforcing the confidence of the bank’s diverse stakeholders and the global financial public.

FRAUDULENT CREDITS HAUNT NIGERIAN BANKS -Industry Sources Warn

Despite continued assurances made by Central Bank of Nigeria’s Governor, Prof. Chukwuma Soludo restating the healthy state of Nigerian banks, reliable banking industry sources have indicated otherwise.

The sources warn that many commercial banks’ risks exposure is quite high, this, the sources averred is responsible for the growing tension in banking operations in the country.

“Of course, most banks keep issuing spectacular financial results, declaring huge profit after tax. But we can tell you that all you see are mere accounts engineering for which financial sector regulatory authorities should be held responsible.

“It is unfortunate that the auditing processes of companies have not been criminalized, if they are, all the shenanigans happening in the banking sector would have been exposed. We can tell you that several banks have lost there shareholders funds. The same capitalised funds that the CBN Governor is hailing as the proactive measure of consolidation that have supposedly saved the Nigerian banking industry.

“But have you ever imagined to the dividends several banks declare at their year-end? If you look at their books properly, they morphed the supposed dividends in their assets account. Yet what the requirement is that funds attributable to dividend should be set aside and, indeed, forwarded to the registrars for onward delivery to shareholders.

What some of the banks do, however, is to transfer some funds to the registrars, which usually are under their direct supervision because they are the banks’ subsidiaries. The registrars just make a show of posting dividends, but then, what you will soon hear is unclaimed dividends. The truth is that the dividend warrants were not dispatched in the first sense.

“Again, So many concerned Nigerians are looking to commercial banks exposure to the stock market as the next likely cause of distress in the Nigerian banking industry, yes, we agree that the stock market may be a possibility, but more than the eventuality we expect from continued worries arising from banks’ risk exposure in the capital market is the heavy exposure to fraudulent credits granted to some highly rated Nigerian and foreign businessmen that have become more or less moribund.

“We can tell you of a celebrated businessman who owes several banks a total of about N412billion debt and as the days pass it is becoming increasingly impossible to recover the sum from him. Besides, there is another gentleman who recently stormed the petroleum products marketing sector. He secured a facility of more than N50billion to finance his diesel supply business and joined other top players in the market to slash price for competitive advantage. But now, the situation have turned bad for him, again it is becoming increasingly bad for him.

“A Nigerian branch of the group of companies owned by an Asian ranked in the list of the world’s ten richest people had on the strength of the track record of the wealthy individual behind the company wracked up about N92billion facility form different Nigerian banks. For this individual, the slide in the global financial market has badly affected his business empire that he is to talking about official bankruptcy. With such a situation what is obvious is that it would become near impossible to repay the facilities secured from Nigerian banks.

“We qualify most of the facilities so secured by these businessmen as fraudulent because the processes of securing are often compromised. We have investigated how conniving accounts officers of some of these banks compromise the whole process of risks and collateral valuation. These account officers are usually promised a percentage of the amount to be loaned out; they forward favourable reports to the management, again, there are members of the management who are insiders to these compromised processes; they easily approve the reports for their personal gains.

“What all these boil down to is that if the CBN Examiners properly conduct the review of the books of most of these banks as required, the revelations will be shocking. On this basis, we want to warn that depositors’ funds with several Nigerian banks are at risk. People should start becoming cautious as they relate with their banks. Just a small slip could cause a lot of damages to depositors’ funds.