Volume II, Issue 18

Magazine cover 18This week on the June 08, 2009 edition of Fortune&Class Weekly:

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

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

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

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

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

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

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

Bank Managers Divert Customers To Black Market Lenders

Chukwuma Soludo, CBN GovernorChukwuma Soludo, fmr CBN Governor

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

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

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

Segun Oloketuyi, Olusegun AgaguSegun Oloketuyi, Olusegun Agagu

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

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

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

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

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FORENSIC ACCOUNTANT CASTIGATES FEDERAL INLAND REVENUE SERVICES FOR PROTECTING OIL COMPANIES

Issues in appropriate auditing process and accountability have, over the years become a constant source of worries and had, often led to cases of finger pointing by Federal Government agencies responsible for regulating the oil and gas sector and the mostly multinational oil producing companies in the country.

The contentious issue had always revolved around the huge discrepancies between amount that up stream oil companies say they paid and what the government says it actually received.

Financial experts and officials of the Nigeria Extractive Industry Transparency Initiative had, since 2004 continued to dismiss the measure of transparency and accounting standards as generally poor.

But a United States of America based Nigerian forensic accountant has accused the Federal Inland Revenue Services of shielding the influential multinational oil companies from the investigative probing of forensic accounting. The Federal Inland Revenue Services is the primary government agency responsible for assessing tax and other revenue due to the government from oil and gas exploration and production activities of shielding.

Mr. Nat Cole, the Forensic Accountant observed that he had been aware of a flourishing practice of under reporting of revenue due to the Federal Government from the multinational oil companies in Nigeria and had approached the Chair person of the FIRS to approve for him, at no cost to the government, the responsibility of auditing the oil companies on the auditing model of forensic accounting’. Cole said.

“The Federal Government and other stakeholders in the oil and gas sector have always been suspicious of figures declared by multinational companies in the now vexed joint venture arrangement with the government in oil exploration and production. In fact, the Nigeria Extractive Industry Transparency Initiative had, in an audit covering the period 1999 to 2004, uncovered huge discrepancies in the figures returned to the government by the oil companies and the figures that are, actually, due to the government.

“As a veteran forensic accountant with more than 28 years auditing the oil and gas sector in the United States and other countries in Europe, I had volunteered my services to the FIRS to audit the books of the oil companies without charges to the Federal Government. I told the Chairman of the FIRS, Mrs. Omoigui Ifueko-Okauru of the limitations of the conventional auditing style to get the actual status of revenue accruable to Nigerians through payment to the government by the oil companies.

“The fact is that by deploying the forensic model of auditing one would be avoiding the what you see is what you get model of auditing. The fact is that with the auditing, you can only work within and by the figures the companies present to you. You won’t be able to ask questions beyond the figures presented. But with forensic accounting and auditing procedure you apply investigative techniques and that will uncover more facts that can be authenticated.

“But the FIRS seems not be to be bothered about what I all of us believe are the wrong things the oil companies are doing as they deliberately act to short change us. I offered my service and I think it is the responsibility of the FIRS management, if they are really serious about getting the right picture of what is happening in the oil and gas sector, to approve the forensic auditing of the companies in the sector.

“But I fear that the FIRS may not be willing to do this because it might be protecting the oil companies from what I can’t really understand. Well, the truth is that the oil giants have become so influential in government that they seem to do things at will and get away with these inappropriate things. It won’t be until we muster enough courage to confront them that the nation would be able to get what is rightfully its, from the oil giants.” Nat explained.