Banking
Sanusi-led CBN lacks corporate governance — FRC
…No board approvals for financial transactions
…Investment in Islamic liquidity management had no board approval
…Governor as chairman of board, error of law
ABUJA – The Central Bank of Nigeria under the leadership of Lamido Sanusi was accused of lack of corporate governance by the Financial Reporting Council in its report to the President on the CBN.
The report signed by Jim Osayande Obazee, FRC’s Executive Secretary, said that there was very weak corporate governance in the CBN as transactions that needed board approval were carried out in the apex bank without such approvals.
Recall that the Lamido Sanusi-led CBN had removed some bank executives on the basis of lack of corporate governance.
The FRC report on CBN stated: “A number of transactions and even of a financial nature were carried out without board approvals as no board approvals were provided as requested.
This shows a very weak corporate governance of the CBN and clear evidence that statutorily allowing the CBN Governor to be both the chief executive officer of the bank as wnepotismell as chairman of the board is the greatest error made in the conception of the CBN act 2007.
According to the Financial Council Report, the board approval for the equity investment in the shares of International Islamic Liquidity Management Corporation of Malaysia to the tune of N0.743 billion is also not provided. The share certificate is also to be provided as it seems that section 34 of the CBN Act has been violated.
It said that the date of the board approval of the apex bank’s financial statements was not disclosed. It further disclosed that in the CBN response, “Your Excellency is therein informed that the management letter on the financial statement is yet to be discussed by the Board Audit and Risk Management Committee.
This is contrary to section 3 (b) of the CBN Act 2007. This is supposed to take place, considered by the Board and decision taken.”
Accounting issues identified usually lead to adjustments in the financial statements before the approval of the board is secured on the accounts. It said that a number of issues on the draft management letter can testify to this.
According to the Council, what this means is that the financial statement submitted by the CBN Governor to the President was not approved by the governing board of the apex bank.
The Financial Reporting Council report on CBN 2012 account further observed that the Financial statement was highly abridged with poor disclosures of transactions and events that are of financial nature.
The breakdown provided to some items seems to be allocation of figures to arrive at predetermined numbers.
Giving clear instances, it said the breakdown of loan provisioning amounting to N586.703 billion has figures that seem more like figures to ensure that the total is arrived at.
Therein is staff loan of N34,789,071; bankers’ payment of N900; National Biotechnology Development Agency of N1051. It also contains CBN contributory pension fund of N122,562,355.
This should not have been accounted for under this classification. It also contains figure for Wema Bank – N50,061,710,108 and AMCON – N500 billion without the unsubstantiated balance of N236,521,506.05.
A breakdown for the Center for Excellence contains several invoices with amounts that are identified simply as ‘others.’
The report said that AMCON made a loss of over N2.4 trillion and also had a negative total equity of over N2.3 trillion at the end of 2011.
AMCON’s 2011 accounts were signed by the board on 8 October 2012. This is to the full knowledge of the CBN since it owns 50 per cent of AMCON share capital and has directors on the board of AMCON.
It said that the CBN rightly explained that AMCON’s bonds are gilt-edge securities of the Federal Government of Nigeria (FGN) {in their response, 7 (d )} but did not disclose to Mr. President that a large portion of this sovereign instrument is to mature by December 31st 2013 and the inability of FGN to fulfill the guarantee may affect credit risk rating of Nigeria negatively.
The fact that it was not budgeted for in 2013 by the FGN coupled with the fact that the CBN was even expecting N713 billion therefrom, were enough reasons for the leadership of the CBN to have drawn the attention of Mr. President to the matter in accordance with section 2 (e) of the CBN Act 2007.
The Council in its report said: “Your Excellency is invited to note that the explanation provided by the leadership of the CBN is unsatisfactory.
Accordingly, your Excellency may wish to take the necessary steps to brief the Senate on the matter and on the financial implication in the immediate future as AMCON’s bond falls due and the sovereign guarantee called thereto; exercise the powers conferred on Mr.
President by section 11 2 (f) of the Central Bank of Nigeria Act 2007 or invoke section 11 2 (c) of the said act and cause the CBN governor and the deputy governors to cease from holding office in the CBN.
The Financial Reporting Council further recommended that the President should direct the council to carry out full investigation of the activities of the CBN, in accordance with section 62 (3) of the Financial Reporting Council of Nigeria Act no 6, 2011 within a period of 90 days or in accordance with section 11 4 of the CBN act 2007. It also asked the President to decide that those found to be culpable be prosecuted accordingly.
The Council further said: “It is important that quick and decisive action is taken so that the opposition to the Federal Government does not take advantage of the information and use it against the government that your Excellency was aware of the lax in CBN and allowed it to stay for political reasons.
It is also important that the CBN governor and or the deputy governors do not decide earlier than your Excellency as they may resign their appointment to foreclose the action of the Federal Government and whatever action taken thereafter shall be regarded as politically motivated.
– VANGUARD
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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