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Forex deals: Firm drags CBN to court, accuses officials of bribery

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A tomato processing company, Erisco Foods Limited, situated in Oregun Lagos, Nigeria has dragged the Central Bank of Nigeria before a Federal High Court in Lagos in suit no: FHC/L/CS/402/17 claiming N20 billion as general damages in consequence of illegal, wrongful, unlawful and unconstitutional conduct by the apex bank denying the company to purchase the United States dollars equivalent from the CBN because of its refusal to offer gratifications to officials of the bank.

Joined as second defendant in the suit is Stanbic IBTC bank.

The claimant explained that it heeded the Federal Government of Nigeria offer under the CBN Commercial Agriculture Credit Scheme CACS, by which the FGN gives financial support to Nigerian manufacturers in the agricultural sector by way of loans/credit facilities at interest rates not exceeding 9% per annum and also granting FX to them at the CBN official rates. Erisco further claim that under the scheme, it enjoyed a facility of N500million through its bankers, Stanbic IBTC Bank, and it generated employment opportunities as it additionally employed hundreds of Nigerians.

In the normal course of its business and need for expansion, the plaintiff  avers that funding from its own sources on 16th June, 2015 paid USD$460,000.00 to its foreign suppliers (Messrs Urumqi High Tech Development Zone Elite Trading Co. Ltd.) in China (being 50% of the total cost) for importation of tomato concentrate, the major raw material for its operations. The balance sum of USD$460,000.00 was to be paid by the company (Erisco) to the supplier before the supplier would ship the imported tomato concentrate to the plaintiff in Nigeria.

The tomato firm however, claimed that before it could pay the foreign suppliers the balance of USD$460,000.00, the CBN on 23rd June, 2015 by a circular banned 41 listed items as items that will no longer be valid for foreign exchange (“FX”). In otherwords, importer of the 41 listed items in the said circular of 23rd June, 2015 will have to independently source for FX to pay for such goods as the CBN will no longer sell FX for the importation of such goods at the official exchange rate of the Naira to the US Dollars. And amongst the 41 listed items was “tomatoes/tomato paste.

By this ban, Erisco avers that it could no longer access or obtain FX from the CBN through its bankers (STANBIC IBTC) for the purpose of its tomato business, particularly the importation of tomato concentrates which is the major raw material for its tomato processing lines.

Erisco disclosed that it was shocked and surprised at the action of the CBN in banning access to FX at the official exchange rate for the importation of tomato concentrate, the major raw material of the plaintiff’s tomato processing business as the CBN was fully aware of and had infact, approved and disbursed funds to them under the CACS scheme for setting up of additional four tomato processing lines which uses only imported tomato concentrate as its major raw material and by which hundreds of millions of Naira credit facilities are outstanding.

The plaintiff further alleged that in view of the fact that it had prior to 23rdJune, 2015, when the CBN circular dated 23rd June, 2015 took effect, already paid USD$460,000.00 to its foreign suppliers leaving a balance of USD$460,00.00, it applied through its bankers to approve the purchase of the balance sum of USD$460,000.00 at the official exchange rate to enable it fully pay the foreign suppliers for the importation of the already secured tomato concentrate and thereby conclude the already existing and ongoing transaction for the purchase of imported tomato concentrate.

Erisco claims it was surprised to be informed by its banker that all its request foresaid to the CBN to approve the purchase of the balance sum of USD$460,000.00 at the official exchange rate was not approved, and that the CBN’s circular dated 23rd June, 2015 was not retroactive.

The company claim it took effect from 23rd June, 2015 and regulate transactions from 23rd June, 2015 onwards. According to the firm, “it does not regulate prior, ongoing or existing and part performed transactions, only fresh transaction commenced after 23rd June, 2015 that ought to be regulated by the 1stDefendant’s circular dated 23rdJune, 2015.”

Erisco further avers that by its corporate operational philosophy of zero tolerance for corruption, had refused to offer gratifications to officials of the CBN.

Consequently, the officials of the bank resolved that it will be dealt with for refusing to “play ball” as all those who “play ball” purchased their needed FX at the official exchange rate from the CBN not notwithstanding that the items they want to import are amongst the 41 listed items banned from accessing FX at the official exchange rate in the CBN’s circular dated 23rd June, 2015.

Erisco, in its statement of claim listed over 50 companies with newspaper publication attached, that were granted FX by the CBN despite the CBN circular of 23rd June, 2015 thereby claiming that its refusal to offer bribe to officials of the CBN resulted to its action against it.

It is, therefore, urging the court to order the defendants to pay it the sum of N20 billion as special and general damages to assuage the economic misfortune it has suffered.

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Senate backs AMCON’s plan to publish debtors’ list

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L-R: Senator Samuel Nnaemeka Anyanwu, Vice Chairman, Senate Committee on Banking, Insurance and other Financial Institutions; Chairman of the Senate Committee, Senator Rafiu Adebayo Ibrahim and Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru discussing during the Senate Committee retreat on the Amendment of the AMCON Act at the Intercontinental Hotel, Lagos on….Thursday
The Chairman Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Adebayo Ibrahim, has said that Nigeria can be made great again, if the legislature as a matter of urgency empowers the Asset Management Corporation of Nigeria (AMCON) to go after recalcitrant obligors. He said that is the only way AMCON can meet its mandate of achieving the tough mandate for which it was set up in 2010.

He said since AMCON over the past seven years have done its best to resolve these debts but are   still encountering resistance from obligor, the 8th Senate of the Federal Republic of Nigeria under the able leadership of Senator Dr. Olubukola Saraki, would have not option that to urge AMCON to compile and publish the list of all these debtors on major daily newspapers in the country. The move, he argued would place before Nigerians those who are holding the nation’s economy to ransom since they account for 80 per cent of AMCON’s N4.8trillion obligation.

The Senator, who spoke today at the opening of a 2-day retreat at Intercontinental Hotel, Lagos where they convened to discuss the all-important AMCON Act Amendment Bill, hinted that the Upper Chamber, as part of its oversight function, has decided that AMCON at this critical time in its lifespan must be given all the support it requires to perform as expected by all Nigerians. He however urged the Management of AMCON to collaborate with the Federal Ministry of Finance (FMF), the Central Bank of Nigeria (CBN), and the office of the Attorney General of the Federation to propose that the President of the Federal Republic of Nigeria and Commander-in-Chief of the Armed Forces issues an Executive Order on seizure of assets of persons who are indebted to AMCON.

In a keynote address he delivered at the commencement of the retreat, Sen. Ibrahim said the upper chamber is intent on having serious discussions as soon as possible with major stakeholders such as the CBN, the FMF, the Nigerian Deposit Insurance Corporation (NDIC) and relevant committees from the legislature among others, where issues hindering AMCON from performing optimally including the funding model of AMCON would be discussed to enable the recovery agency of the Federal Republic of Nigeria finish its assignment on a high.

According to him the Upper Chamber will at this stage bare its fangs by amending the AMCON Act because AMCON has been a key stabilizing and re-vitalizing tool in the Nigerian financial system and so will be supported by the legislature to enable the Corporation achieve its statutory objectives. He said the legislature therefore supports the proposed plan by AMCON to publish the list of especially the 350 obligors that accounts for nearly 80 per cent of the total huge debt of AMCON.

Earlier in his presentation, Managing Director/Chief Executive Officer, AMCON, Mr. Ahmed Kuru reminded the Senate Committee that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. He disclosed that AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the Federal Government therefore, Kuru said he is convinced that it is doubtful that the government can afford to expense AMCON’s debt in the short term.

It was for that reason, AMCON, after seven years of negotiating with the obligors with no commensurate recovery result, has decided to change its strategy, which now pays strict attention to enforcements as a way of compelling especially the recalcitrant obligors to come and pay up their debts. To achieve this however, Kuru said the Corporation will be heavily dependent on the legislature, most especially members of the committee to facilitate the amendment of the AMCON Act since most obligors of AMCON that are politically exposed and business heavyweights now employ different antics in law to tie the Corporation up in courts.

Further highlighting other challenges faced by the Corporation, the AMCON CEO, again said, “One of the major areas for amendment is the matter of vesting proprietary interest of all collateral assets acquired by AMCON from commercial banks. The proposed amendment will have retrospective effect. The vesting of proprietary interest of all collateral assets in the resolution vehicle was implemented in Malaysia and was instrumental to their success in recovering debt obligations.

“Our second challenge has to do with the disposal of assets due to the economic downturn. AMCON’s current assets under management (AUM), that is assets obtained from debt resolution, has a book value of N182 billion, which we are unable to sell. Our ability to successfully divest these assets, at competitive market price, is severely hampered by several factors including valuation methodology, unperfected title documents, state of the economy, purchasing power. The third challenge is the uncooperative attitudes of select obligors who are either unwilling and/or unable to settle their indebtedness. Such debtors prefer to resort to all manner of diversionary tactics as opposed to dealing with the problem of their indebtedness. It sees most of them are buying time, to where we do not know.”

Kuru also stated that from all indications, AMCON has in the past seven years exhausted the low hanging fruits and have had to roll up sleeves for a drawn out battle because it has become harder to get obligors to settle their debts. Throwing more light on this, the AMCON boss said, “To clarify, obligors indebted to AMCON for the sum of N1.3 trillion have sued us in various courts in Nigeria raising technicalities to avoid meeting their obligations. This has hampered our recovery efforts and our objective of obtaining the best achievable financial returns on assets acquired from the banks.”

For that reason, he informed that AMCON had presented the issue with 350 accounts that represent about 80 per cent of AMCON’s current exposure of N3 trillion as at May 31, 2018. AMCON, he said is still grappling with the issues that are multi-faceted, which consequently led the Corporation to reposition its debt recovery approach to focus on enforcement against obligors who are not willing to settle amicably.

In conclusion, Kuru said, “I will like to emphasize, once again, that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the Federal Government, it is doubtful that it can afford to expense AMCON’s debt in the short term.”

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C&I Leasing Plc expands, acquires ‘Petrotech JV’

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C &I Leasing Plc, a leasing and business service conglomerate has just concluded the buyout of 27.5% minority stake in C&I Petrotech Marine Ltd- a Joint Venture company with six vessels presently deployed to a long-term contract with Shell Petroleum Development Company of Nigeria (SPDC).

The parties engaged Wizer Advisory as an independent advisor for the valuation of the shares. As a result of this transaction, C&I Petrotech Marine Limited is now a fully owned subsidiary of C&I Leasing Plc.

Recall, C&I Leasing Plc recently recorded a successful N7 Billion Bond issue- the first series in a N20 Billion debt issuance programme. The company had stated that the funds raised would largely be invested in business expansion and restructuring of the company’s debts over a period of five years among other initiatives which will guarantee increased profit margins and returns for shareholders. Today’s buyout transaction of C&I Petrotech Marine Limited minority shareholders is evidence of C&I Leasing’s commitment to investing in its business growth and expansion.

According to the Managing Director of the Company, Mr. Andrew Otike-Odibi, “Our journey into the Maritime sector as a service provider for the Oil and Gas sector actually started through the C&I Petrotech Marine Joint Venture in 2010 and has over the years culminated in the ownership of over twenty vessels consisting of crew boats, pilot boats, tug boats, patrol boats and platform support vessels for providing services such as line and hose handling, berthing and escort services, mooring support, fire-fighting, pollution control, security and floating and self-elevating platforms.”

“This clearly reiterates our commitment to growing our Marine service business and gaining leadership in the field”.

It is hoped that this buyout will further the company’s drive to restructure and reposition its marine business for enhanced profitability.

C & I Leasing Plc has been in operation for over two decades and has since evolved from being a simple consumer finance leasing company licensed by the Central Bank of Nigeria in 1991 to  becoming a  diversified,  leasing  and  business  service  conglomerate  providing  support services to various indigenous and multinational organizations in West Africa along three lines: Fleet Management, Personnel Outsourcing and Marine Services. The C&I Leasing group of companies has its operational offices in Lagos, Benin, Port-Harcourt, Calabar, Enugu and Abuja. The company has also been listed on the Nigerian Stock Exchange since 1997 and is invested in the following subsidiaries – Leasafric Ghana Limited, Epic International FZE Dubai and now C&I Petrotech Marine Limited.

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UBA emerges best institution in Digital Banking across Africa

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Pan-African financial services group, United Bank for Africa Plc, has once again made an addition to its growing list of enviable laurels as it was named Africa’s best bank  in the Digital category at the prestigious Euromoney awards in London.

This further lends credence to UBA’s dominance in the digital banking space. The Euromoney awards ceremony which was held on Wednesday, July 11, 2018 covers more than 20 global product categories, best-in-class awards and the best Banks in over 100 countries around the world, recognising institutions that have demonstrated leadership, innovation, and momentum in the markets in which they operate.

In selecting its recipients, Euro money’s principle is hinged both on quantitative and qualitative data to honor institutions that have brought the highest levels of service, innovation and expertise to their customers.

At the awards ceremony, UBA beat other nominees taking away the prize for best institution in Digital banking across Africa, an affirmation of its recent investment in cutting edge technology, one of which gave birth to Leo, the chat banker that has disrupted banking across Africa.

In a bid to be the undisputed leading financial services industry  in Africa in the area of innovation and technology, UBA has steadily included new and emerging trends to its range of solutions in-branches, across subsidiaries and on digital platforms. The emergence of LEO, has been a continuous directive to push the banking sector beyond financial services and to show that the bank truly comprehends the shift in operations and the movement of the global world with technology today.

The Euromoney award, which is a recognition of innovative products and services introduced by the bank in recent times and targeted towards meeting customer needs, comes on the heels of recent awards to UBA, including Finnacle Client Innovation Awards and Best Bank Awards won by five of its subsidiaries across Africa by The Bankers Magazine. UBA was also declared the best Bank in Africa in 2017.

Receiving the award at a well attended event in London, the Group Managing Director, Chief Executive Officer, United Bank for Africa, Kennedy Uzoka, appreciated the organizer’s for the recognition, noting that UBA’s dedication to hard work and particular emphasis to offering quality services to customers are being acknowledged.

According to Uzoka, the award affirms the Bank’s strong management and un-matched commitment to service excellence.

He said: “This only goes to show that our resolve in continuing to deploy innovative solutions that place customers first, using cutting edge technology for their collective satisfaction and excellent banking experience is important to us. This recognition will further spur us to do more in meeting the needs of our customers with unrivalled services.”

Uzoka stated “for us at UBA, the award is quite an accomplishment, considering Mark Zuckerberg, CEO Facebook and President Emmanuel Macron of France’s recent endorsement both of which centred around highlighting the distinguishing value of UBA’s leading digital opportunities”.

“Also, our recent launch of Leo in 15 African countries is evidence that UBA has on its agenda, the objective of digital creativity especially in service for our trusted customer base across the African continent.  This award reminds us as an institution not to relent in our pursuit of excellence and to continue to lead the new digital age in Africa, within the financial services industry’.

Clive Horwood, Euromoney Magazine’s Editor explained that:  “Despite fierce competition, one bank stood out in the last year for the inventiveness of its efforts in digital banking: United Bank for Africa. One of its signature launches in Nigeria was Leo, an e-chat service using artificial intelligence to help customers execute transactions on Facebook”.

“Recently, Mark Zuckerberg gave a nod to the service, during a talk at a recent developers’ conference – a sign of its recognition at the highest levels of digital technology. The bank also recently added retina and fingerprint recognition and technology to reduce business travel greenhouse emissions. If it fulfils its ambitious plans to partner with fintech companies, UBA could continue to lead African banks in the area of digitilisation. “Horwood noted.

UBA is one of Africa’s leading banks with operations in 20 African countries and in London and New York, with   presence in Paris.

Adjudged to be at the forefront of innovation and convenient banking, UBA is one of the first financial services institutions on the continent to deploy Finacle 10x, a new information technology platform that boosts its services and electronic banking channels.

Today, UBA provides banking services to more than 15 million customers globally, through diverse channels and over a thousand touch points.

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