Nobody wants to change the winning team

Emmanuel Anyanwu

Emmanuel Anyanwu

Hyra Motors introduced and markets the now popular Geely and Brilliance car brands in Nigerian auto market. In this chat with ol’VICTOR OJELABI, Mr. Emmanuel Anyanwu, the company’s sales/marketing manager, presented an expository overview of the world of Asian made vehicles.

How many years have you been working for Hyra Motors as sales/marketing manager?

I’ve been with Hyra Motors for quite a while. Thank God, Hyra Motors has been around for three years. A company which was duly registered on 13th April 2006, and putting that into consideration, within a short period of time, we’ve witnessed tremendous progress.

As a marketing manager, what has been your greatest challenge since you joined the company?

Well, the biggest challenge has been how to develop a marketing campaign, especially changing the mind-set or perception of the average Nigerians towards the Chinese automobiles. It has not been easy, going by the history and heritage of Asian cars. Most people, of course, know that before now anything out of China was probably not the best. But I can say now that in the Nigerian automobile industry, the Chinese have done well. Given the antecedent, they have just been around for less than a decade in comparison to brands that have been here for quite longer. So I had a serious challenge of building awareness for the brand I represent, that is, Geely and Brilliance Autos. It took a lot of strategic planning to reposition ourselves to, at least, win the confidence of the average Nigerian buyer.

In the last two years, what manoeuvre as a sales/marketing manager has led to your greatest achievement?

Eh, I give all the glory to God who makes man what he is. Well, one particular act that I consider my greatest achievement is my resolution from day one not to give up on Chinese brands. And since I’ve decided not to give up, then I can look back and say thank God for the resilience, the steadfastness and focus. That is the most striking achievement, the fact that I didn’t give up on the Chinese brands.

How have the sales of your brands been like?

In fairness to you, what we’ve achieved less than three years, is probably what someone else has done in five to 10 years with the popular brands. And for this, I don’t want to take credit for it, but to God. We put up many strategies, but victory came from the Almighty. Permit me to be a bit spiritual because that is the ultimate. You know, sometimes you can plan so well, but it is still only God that gives you the grace to succeed. If we compare our stand, I mean in this our gestation period to what was obtainable by most popular brands, I think we’ve done very well.

We have something that most people are becoming very used to, which is the way we deal with them, taking care of their vehicles in terms of maintenance and any other necessary repairs.

In essence, you are saying that facilities like after-sales service attract or help increase your sales volume?

Three things are responsible for the growth of our sales volume, one is the fact that we are appropriately priced. We have offerings that are competitive in price for its range in its category, I can beat my chest to say they are about the most affordable four door salon cars in Nigeria. But that is not the key reason why we’re experiencing growth in sales. I also mentioned the fact that our after sales services are the best; no wonder, we were declared the best new automobile company in year 2007/2008. Of course, there is this other part of us that is becoming the toast of everybody. The parts of our vehicles are just the most affordable. You see, three things make a very good auto deal: performance, after sales service and affordable price. If you can’t buy the car, there is no point thinking about the pleasure you cannot afford.

What about durability?

Durability is all about performance. It is all encompassing. Performance in terms of the car performing below specification, if a car could do XYZ, that is, talking about the basic features. And of course, we look at the fact that this car has been on the road for three years without anybody complaining. Now, I know of some brands, I would not mention their names, which came into this country that couldn’t survive two years. I remember people telling us that in less than a year, all your cars would be off the road. As I speak, our cars have been on the road for much longer.

Aside from Geely and Brilliance, what other brands are in the company’s portfolio?

For now, we deal only in Geely and Brilliance, talking about the saloon cars. But we also have in the pipeline other brands we would be showcasing very soon. These are all other categories of vehicles…

Can you be more specific?

Yes, we are looking at some other categories like truck, saloon cars, and any other category that would attract you to us.

And don’t you think the commitment in trying to sell the Geely and Brilliance would wane, if you digress into selling all these categories you mentioned?

No. You see, Geely and Brilliance having done so well, we would leverage on our expertise. We look at the human resource angle to our business. We have gotten the best hands, satisfying the maxim of the right people in the right place. We also have the will and the determination to move the industry forward. We aren’t just in the business to make profit, we are in the business to add value to basic operations as far as the marketing of automobile is concerned. And that is why we are already in some other West African countries. Our ultimate objective is not just to sell cars, we want to deploy the expertise in technology of those who have been in this thing for decades.

Despite the good looks of Geely and the claims of your marketing department, some users still complain about the durability of some interior components like the door knobs and fragile backrest. What is your take on this?

Well, I am very surprised to hear these because these are not complaints that I’ve documented. If customers do complain, I document it, I don’t know how this complaint came about and where. But between you and I, what we are realistically aware of in terms of customers’ complaints, is that if they travel out of Lagos, they weren’t sure if they would get an outlet to service their vehicle. And we quickly put up more service centres to cater for this. But for the door knob and the rest, I stand to be corrected, there has never been any record on those. No Geely door knob has fallen off and no headrest as dangled as you said. We are in Nigeria where anything is possible, people say all sorts of things because they don’t want competitors.

Okay, all said and done, let’s talk about the new bride, Geely CK2. What makes it worth the noise?

Well, Geely as a brand is worth the noise. And for the new Geely CK2, it gives us joy to have in the stable another version. CK2 1.3GL is an improvement on the former CK 1, which is our fastest selling model because it meets the requirement of an average Nigerian. Bearing in mind the purchasing power, the new Geely is just some few thousand naira above the CK 1. Then, looking at the structural improvement, there are lots of changes. When you look at the interior of the car, the quality of the materials that have been used is much better than what it used to be. The fabric used is easier to clean, while the body boasts of impact repelling material. The CK 2 comes with a lot of things which take the car to the level we can say it is satisfactory.

What is your market projection for the car?

We are looking at over 200 per cent growth in volume because as we speak, the orders we have on ground is about 90 per cent before the final unveiling.

And what do you think is responsible for that?

Actually, as I told you, when you give people what they want, they always want to say ‘thank you’ by being dedicated to the brand. We’ve won the confidence of the average Nigerian users. We’ve represented ourselves very well in giving cars that have performed well, that are durable, the parts are affordable. What else do you expect the man to do but to commend you as far as automobile is concerned. So they are saying, ‘hey! Hyra Motors, we stick to you,’ because the troubles they’ve gone through in the past, Hyra Motors has been able to fill that gap. Nobody wants to change the winning team.

How many cars did Geely sell globally in 2008, and what fraction of it accrued to Hyra in Nigeria?

At this point, it’s like somebody is asking how much profit you made last year. Anyway, Geely has done very well. From the Far East to core Asia, to Europe and Africa, Geely has been able to do well over 45,000 units. And then you see, for us in Nigeria, we are proud to say our contribution to that is commendable compared to the chance we have.

How do you intend establishing dominance of your brands in luxury sport car segment?

The main thing is that we are not driven by passion that is not traceable to reality, but one that is traceable to reality. We would always try not to be left behind in the technology advancement of our auto industry.

Will you allow Nigerian reviewers to test drive your cars?

Sure, we do. In fact, a team of journalists left my office a while ago, and they were here to test drive one of our new models. Well, I believe it is necessary to establish all the parameters, whether it is on emission or transmission. Due to the bad state of most Nigerian roads, whatever facts that might have been recorded for any vehicle, will definitely be attacked by the Nigerian context, which necessitates the need for Nigerian auto journalists to test drive.

What is the company’s corporate service to your customers for the support given over time?

We’ve shown tremendous appreciation to customers in the area of sponsorship by taking part in what they do.

As a dealer and user, what are the challenges one faces in the process of owning a car in this country?

Well, it is very unfortunate that the major challenge people face is that of finance. Now that people desire brand new cars, their paycheck is not brand new. But we have a stop gap measure which is not tailored to satisfy individuals, because you have to be very careful not to incur bad debt. It is called the Hyra Auto Leasing Facility for corporate bodies. We allow them to make down payment of 40 per cent on the value of any car they want, then we spread the balance over six months. This facility is currently being enjoyed by corporate bodies that don’t want to tie their cash from the acquisition of their cars.

And the result?

It has paid off. More orders are coming in, although we have to screen them. All you need is to present a copy of your Certificate of Incorporation, guaranteed from your directors and some other arrangements. The main thing is that at the end of the day, with the presentation of your post dated cheques, you get your facility.

Advertisements

Expert Decries Bank Charges On Returned Cheques As Illegal

As published in the Oct 13, Issue 38. ULD by ol’Victor Ojelabi

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.

Cancellation of uniform year-end saves banking sector …bank stocks now best buys – experts

As published in the Sept. 28, Iss. 33. Site Admin. ol’Victor Ojelabi

The idealism of Central Bank governor, Prof. Chukuma Soludo, did transform the nation’s banking industry. From a motley crew of pretender-financial institutions, Prof. Soludo presented to the nation on the first day 2006 a manageable community of 25 banks that have passed his test of the N25billion mark.

On the attainment of this feat, believed before 01-06-2006 to be an impossibility, the Nigerian banking public celebrated the Professor of Economics and, of course, got inebriated with the promise of greater things to come from the banking sector. Banking experts caught on to propelling excitements steaming from the office of the CBN governor, “with more money from consolidation, banks were going to drive the active sector” was the chorus.

The industry did make a jump to new levels of growth, Nigerian banks, have since 2006 been involved in financing billion plus naira projects in the hefty oil and telecommunications sectors, that was unheard of in the pre-consolidation era. Personally, I am enamoured with the gleam of glamour and high tech platforms on which Nigerian banks dispensed financial services to the public.

The banking consolidation certainly has an impact in galvanising a trendier banking culture and it shows in the lifestyles of bankers and their institutions that have become celebrities in the public place with each competing for media attention in a rather morbid claim to the nation’s number one ranking in the banking sector. So much that Nigerians were regaled with figures of banks that had crossed the one billion dollar shareholders’ fund, some other countered on their multi-trillion naira asset and all that. For the naïve watcher of the banking sector, the easy conclusion would be a sector that is vibrant on all measures of indices. The investing public was apparently taken in, for good reasons too, banks had become the main drivers of the Nigerian Stock Exchange, accounting for the biggest chunk of trading activities in the market in terms of volume and value.

All these together must have emboldened the CBN governor to push farther his idealistic template to ensure a banking industry that can compete with any other across the world on credibility of operations and status ranking in translating turnover to profit. Unfortunately, this altruistic illusion was the undoing of the CBN governor. Soon after he announced that the nation’s banks must all adopt the same December year-end, all manners of strange things started happening.

The same year-end implies that each bank would stand alone in presenting report of activities to investors. This would provide the basis for comparing the profile of banks against one another and of course, lend credit to claims by each bank.

Then a state of near stultification of the ordinary banking operations commenced. Banks started a desperate hunt for deposits to shore their vaults in the run up to the year-end deadline. To secure these deposits, banks were ready to obligate themselves to very high interest rate. There were clear signals that the economy was grinding to a halt as banks lending activities were thrown to the back offices in preference for deposits drive.

The inter bank rate, the rate at which banks lend themselves money sprinted beyond the year on year average, there were suspicion that banks needed to use this borrowed funds from other banks to make their books look good.

The signs of trouble were noted in the CBN Quarterly report but not many gave much thought to it. The report notes that “With tight liquidity conditions in the money market, following the upward review of the MPR from 9.0 to 9.5 per cent in December, 2007, deposit money banks (DMBs) accessed the CBN lending facility more frequently to square up short-term positions. Consequently, a cumulative sum of =N=8,658.91 billion was granted to DMBs on overnight basis in the review period, compared with =N=523.91 billion in the preceding quarter.”

The report further asserts that “available data indicated mixed developments in banks’ deposit and lending rates in the first quarter of 2008. With the exception of the average savings deposits and seven-day savings rates which, fell by 0.26 and 0.16 percentage points to 2.97 and 5.38 per cent, respectively, all other rates on deposits of various maturities rose from a range of 7.75 9.90 per cent in the preceding quarter to 9.48 10.71 per cent. On the other hand, the average prime and maximum lending rates fell by 0.44 and 0.07 percentage points to 16.05 and 18.17 per cent, respectively. Consequently, the spread between the weighted average deposit and maximum lending rates widened from 15.01 percentage points in the preceding quarter to 15.20 percentage points. On the other hand, the margin between the average savings deposit and maximum lending rates narrowed from 10.77 percentage points in the preceding quarter to 10.31 percentage points. The increase in interest rates during the review quarter was attributed to the upward review of the MPR in December, 2007. At the inter-bank call segment, the weighted average rate, which was 8.25 in the preceding quarter, rose to 10.30 per cent, reflecting the liquidity squeeze in the inter-bank funds market.”

The CBN was rather being merely academic with its reasons for the lending rates’ differentials and liquidity squeeze, by the time the reports for subsequent quarters are made public the spiking of credit relationship between banks on one hand and with the CBN on the hand, would tell of the tension that would have run the banking sector aground if the CBN had gone ahead with same year-end policy.

The unusual tempo of activities in the sector eventually got the CBN scared of the dire consequences if it insisted on going ahead with the same year-end policy. It was obviously a beaten Prof Soludo that informed the nation of the CBN’s decision to cancel the same year-end policy as a result of what the apex bank described as observed unhealthy trend/development in the industry whereby some banks were mobilizing deposits at very high interest rates that were inconsistent with economic fundamentals which was becoming a threat to market stability.

The CBN confirmed in the public announcement that it was compelled to cancel the same year-end policy “in the light of the developments in the economy and the misplaced perception that the interest rate trends are linked to the requirement of a common year end and therefore decided that the year end will no longer be a requirement. Consequently, each bank and discount house is at liberty to adopt its own accounting year end as it deems appropriate and can inform the CBN accordingly.”

The announcement has certainly calmed the brewing storm in the sector, so it is back to business as usual. Banks will continue to declare enormous profit, banks would continue to inundate the investors with sparkling financial positions and because banks drive the national economy in an awkward inverse relation to the active sector that should, in the ordinary sense of economics, drive the national economy, banks would continue to make more money than any other sector of the economy. This is why any investor wishing to make the fast break in the stock market should now start hunting for banks’ stocks. With the exception of Unity Bank and Wema Bank that are currently on suspension, all consolidated banking stocks listed hold great prospects, principally because bankers know how to play the Nigerian economy better than any other sector player. This is a lesson in fundamental consideration in investment decision making.

WE ARE VINDICATED

Since mid-2007, we had stridently made calls for reformation of the Nigerian stock market, we had published stories of infractions that threaten the integrity of the market, we had revealed manipulative antics of some operators and their collaborators, and had asked for more pro-active monitoring and supervision of the market, especially in transactions involving moribund companies. Some had hailed our courage for revealing the truth, some had vilified us, and some did not even pay any attention to our positions. But a five-month bearish run in the market has justified our position calling on all market players to play by the rules. The roll-out of emergency measures to put in abeyance the unwholesome domination of the capital market by the bears, have justified our principled position.

Yet, the surveillance continues.

Finally! Arisekola takes control at FirstBank

Arisekola - a turban in the bank?

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.