Business
National Assembly Introduces Jail Terms For Ponzi Scheme Promoters
The Investment and Securities Bill, which might result in jail time for people who advocate Ponzi schemes in Nigeria has been passed by the National Assembly.
The Investment and Securities Service Bill 2023 finally scaled through the final hurdle of the National Assembly when the Senate passed it on March 29.
The bill, which is expected to aid the functioning of the capital market and facilitate the ongoing economic diversification in the country, had been passed by the House of Representatives in December. It is only awaiting presidential assent to become law.
At the plenary, the Senate President, Ahmad Lawan, stated that the bill is expected to protect investors, adequately regulate the market, reduce systemic risks as well as provide for more stringent punishment for operators of Ponzi schemes.
He said, “The bill for an act to repeal the Investments and Securities Act 2007 Act No. 29 2007 and enact the Investments and Securities Bill 2023 to service the SEC as the apex regulatory authority for the Nigerian capital market as well as regulation of the market to ensure capital formation, to protect investors, maintain fair, efficient and transparent market and reduction of systemic risk and for related matters is hereby passed.”
Speaking as of the time the House of Representatives passed the bill, the Chairman of the House Committee on Capital Markets and Institutions, Babangida Ibrahim, stated that the ISB 2023 was capable of transforming the capital market, attracting foreign investors as well as boosting investors’ confidence, among others.
Ibrahim said, “The bill seeks to repeal the existing Investments and Securities Act 2007 and to establish a new market infrastructure and wide-ranging system of regulation of investments and securities businesses in Nigeria, especially in the areas of derivatives, systematic risk management, financial market infrastructure and Ponzi scheme and platforms.”
One of the developments that the new bill brings is the prohibition of Ponzi/Pyramid schemes, which have led to the loss of billions of naira on the part of victims and also affected confidence in the investment climate in Nigeria.
The passed bill prohibits Ponzi/pyramid schemes as well as other illegal investment schemes and prescribes a jail term of not less than 10 years for promoters of such schemes.
Ponzi schemes, also known as pyramid sales schemes, are a money laundering system where investors are lured in with the promise of high returns on investment after a specified period.
The system runs in a somewhat cyclic fashion by paying old investors with deposits of new investors. Usually, this cycle becomes unsustainable when the backlog of old investors eligible for payments exceeds the investments coming into the system.
According to Nigeria’s Securities and Exchange Commission, three million Nigerians lost N18bn when the popular Ponzi scheme, Mavrodi Mundial Movement aka MMM, crashed in 2016. As of 2022, Nigerians have lost over N300bn in Ponzi schemes in five years, according to a report generated by the Norrenberger Financial Investments scheme.
The promoters of a popular investment scheme, Ovaioza Farm Produce Storage Business Limited, are facing prosecution for luring members of the public to an unregistered collective investment scheme. The promoters, Imu Yunusa and Goodness Omeiza have been accused of defrauding their victims up to N2bn.
Reacting to the introduction of the prohibition of Ponzi schemes, Chief Executive Officer of Enterprise Stockbrokers, Mr Rotimi Fakayejo, said that the move was long overdue and a welcome idea.
He said, “I remember very well, this Ponzi scheme that got a lot of people in trouble, MMM. In the end, it is not just about people losing money. It is the disinterestedness in investing. First, they invested in the wrong window and ultimately, they will not invest again.
“Some foolishly and gullibly invested in it and some because of ignorance entered into it and others because of greed. Those who entered into it because of greed know what they were doing, they are just greedy. But the ones who get into it ignorantly, not knowing that such schemes are not authorised by the SEC are the ones who may never enter into any viable or regulated investment window again. Every economy needs investment, for money to be revolving through profitable channels.”
Fakayejo also argued that both those who get involved in Ponzi schemes and their promoters should be punished, albeit, the sanctions would be different.
He said, “The person who goes into it should get a small punishment and the person that starts the scheme should get a huge penalty. For anything, you are supposed to make findings.”
Regarding the proposed jail term of not less than 10 years, Fakayejo stated that the inclusion of asset forfeiture and also a fine of 10-20 per cent of the amount of money collected from victims may not be a bad idea.
Expressing a divergent opinion on the Ponzi scheme prohibition, the National Chairman of the Progressives Shareholders Association of Nigeria, Boniface Okezie, stated that Ponzi schemes have been embraced in other places.
“The Ponzi scheme has worked elsewhere; people have embraced it but the Nigerian market has not embraced it and SEC said that it is not known to them and that it is a scam and so they cannot allow Nigerians to patronize it.”
Okezie also accused the National Assembly of copying foreign laws that may have little or no impact on the Nigerian scene and doubted that the President, Major General Muhammadu Buhari (retd) would sign the bill before the expiration of his tenure next month.
The PSAN boss said, “I do not think the outgoing president will assent to that bill before he leaves office on May 29 because previous bills sent to him, it took him time to assent, not to talk of now that he is going for retirement.”
Speaking on some highlights of the bill in a statement released after the Senate passed the bill, the Director-General of the Securities and Exchange Commission, Lamido Yuguda, said that a recommendation was made in the bill for the inclusion of the National Pension Commission on the SEC board for increased collaboration between the two agencies, particularly to encourage greater investment of pension funds and in capital market products/instruments.
This is a welcome development, according to stakeholders, given the visible role that pension funds play in the capital market already.
Capital market operator, Fakayejo, said that Pencom having a seat on the board of SEC was long overdue.
He said, “The pension funds have been a major investor in the capital market. Look at all the major instruments, either bonds or equities, commercial papers, at the different classes of bonds, whichever way you want to look at it, the pension funds are the largest investors. So, I believe they should have a say in how the market is being regulated.”
Okezie also agreed, saying that the pension funds had been a major player in the capital market.
He said, “The Pension Fund has contributed to a large extent to what are seeing today of the rallying in the capital market. If they are investing in the SEC-regulated market, they should be mindful of where they invest their money so that their money does not get trapped when they need to pay those retirees.”
Commenting on the bill being able to boost investors’ confidence and attract foreign investments like the Chairman of the House Committee on Capital Markets and Institutions, had boasted, Fakayejo, pointed out that the reasons foreign investors left and are leaving are still very much around.
He said the unstable exchange rate was a major deterrent for foreign investors.
“I don’t see anything in the bill that is a plus for foreign portfolio investment. You and I know that the reason they are not here or why they have taken away their money is the instability of the naira. That has been the basic reason they (FPIs) are not here.”
Professor Olawale Ajai of the Lagos Business School also agreed that the country’s business environment has not been investment-friendly.
Ajai said, “Insecurity and the opaque naira foreign exchange regime have not helped in recent times, in spite of strenuous efforts on ‘doing business reforms.’”
Others highlights of the bill include the expansion of the categories of issuers as a key step towards the introduction of innovations and offerings such as crowd-funding as well as the facilitation of “commercial and investment business activities”, subject to the approval of the commission and other stipulated controls.
The bill also expands the definition of a Collective Investment Scheme to include schemes offered privately to qualified investors, and contains an entirely new part which regulates Commodity Exchanges and Warehouse Receipts.
The SEC DG said that the new parts of the bill “are essential for developing the entire gamut of the Commodities ecosystem”.
According to him, a new part on the management of systemic risk has been introduced, covering the following themes: monitoring, management and mitigation of systemic risk in the Nigerian capital market; arrangements with other regulators relating to information required from entities that are regulated by other regulators; sharing of information between financial sector regulatory authorities or government agencies; and use of a legal entity identifier to provide for proper monitoring of systemic risks.
The proposed legislation categorizes Securities Exchanges as either composite or non-composite exchanges. A composite exchange allows for the listing and trading of all types of securities and products, whereas a non-composite exchange specializes in a single type of security or product.
Additionally, the bill expands the responsibilities of exchanges and outlines clear guidelines for revoking registration. It also introduces new provisions regarding Financial Market Infrastructures, such as Central Counter Parties, Clearing Houses, and Trade Depositories.
Business
Content Creation Can Buy 4 Lamborghini’s – Comedian Josh2Funny Reveals
Nigerian comedian and popular skit maker, Chibuike Josh Alfred, known by his stage name Josh2Funny, has shed light on the profitability of the content-creating industry.
In a recent interview with Echo Room, Josh2Funny highlighted the impressive financial potential that content creators can achieve, noting that it is possible for them to comfortably afford multiple luxury cars, including up to four Lamborghini vehicles.
Speaking candidly, Josh2Funny emphasised that content creation has become an extremely lucrative field due to the constant demand for fresh and engaging material. “If you want to buy four Lamborghini from content creation, you can buy it,” he said.
His remarks underscore the significant revenue opportunities available in the digital content landscape.
Josh2Funny explained that the continuous consumption of online content is what drives its profitability. “What do you think we are doing in the content-creating industry? Are we joking? You all are with your phones, when you’re in the bathroom, when you’re [using the restroom], you’re consuming our stuff. It’s like pure water,” he stated.
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The comedian further elaborated that businesses or industries that deliver products consumed on a daily basis often see the most substantial financial returns. Content creation, with its high rate of daily consumption by audiences worldwide, aligns perfectly with this model.
“People are out there, consuming our content every time,” he said, reinforcing the idea that the reach and influence of content creators have never been more extensive.
Josh2Funny’s insights reveal why the content-creating industry has become a lucrative career path for many in Nigeria and around the world. With the continuous growth of social media platforms and the public’s insatiable appetite for entertainment and relatable content, creators are finding new and innovative ways to monetize their craft.
This shift not only highlights the potential for significant financial gain but also showcases the evolving landscape of digital media, where influencers, comedians, and skit makers can turn creativity into a sustainable and highly rewarding business.
Business
NIVEA Black & White Invisible Roll On Deodorant Batch No. 93529610 Not On Sale in Nigeria
A safety alert notification by the National Agency for Food and Drug Administration and Control (NAFDAC) in Nigeria issued on October 31, 2024, regarding NIVEA BLACK & WHITE Invisible Roll-on deodorant (50 ml) batch number 93529610, in relation to the general European Union (EU) Rapid Alert System for Dangerous Non-Food Products (RAPEX), has come to our attention.
The batch is said to contain 2-(4-tert-Butylbenzyl propionaldehyde (BMHCA).
In a statement on Saturday, in Lagos, Beiersdorf, the owner of NIVEA brand, assured that the “the Batch No. 93529610 in question has not been marketed in Nigeria and thus never recalled”.
According to the statement, Beiersdorf was well informed that “Based on current European legislation, the use of ingredient 2-(4-tert-Butylbenzyl propionaldehyde (LilialTM) in cosmetic products has been banned from the European markets as of March 1, 2022.”
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It acknowledged that “The batch in question, in fact, expired in January 2022 and was hence at the time fully compliant with the then valid European cosmetic regulation.
“As a responsible corporate citizen, Beiersdorf is working collaboratively with NAFDAC to safeguard the interest of the Nigerian consumers by ensuring that our locally manufactured product meets the global quality standards.”
It maintained that “The safety of our consumers remains our highest priority, consistent with our ethical philosophy as a business.”
In pursuit of this commitment, Beiersdorf’s entire NIVEA product portfolio formulations have been reformulated to be Lilial-free formulas in full compliance with the EU Regulation on cosmetic products well ahead of its Lilial ban coming into effect as far back as March 1, 2022. For instance, the formulation of NIVEA BLACK & WHITE Invisible Roll-on deodorant has been Lilial-free since at least 2020 across the globe, including Nigeria.
“Our trade partners were informed ahead of time and reminded of their responsibility to remove the outdated Lilial-containing products within the legal timeframe to fulfill their obligations with the European Cosmetic Product Regulation,” it added.
Business
Shell, NNPC Ltd, Others Gift Three Universities ICT Centre, Digital Library
The Shell companies in Nigeria teamed up with the Nigerian National Petroleum Company Limited (NNPC Ltd) and other stakeholders to build Information Communication Technology (ICT) centres and a digital library in Nigerian universities in 2024.
Biztellers reports that it initiative is part of their continuing support for education.
Some of the corporate bodies that executed the projects include the Shell Nigeria Exploration Production Company Limited (SNEPCo) and NNPC Ltd, and the Nigerian Content Monitoring and Development Board (NCDMB).
The benefiting institutions were, the Niger Delta University, Amassoma, Bayelsa State, which got a digital library in April, the Sa’adu Zungur University (formerly Bauchi State University), Gadau in Bauchi State, where an ICT Centre was commissioned in July, by The Shell Petroleum Development Company of Nigeria Ltd (SPDC) as part of the Joint Venture with NNPC, TotalEnergies and NAOC.
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In what would sound like singing-off on the educational intervention initiative for 2024, the Federal University of Technology, Owerri (FUTO), overflew with joy at the unveil of a world-class engineering design studios and ICT hub, courtesy of the SPDC, NNPC Ltd and other Joint Venture partners collaborated with NCDMB.
Reflecting on the three facilities, Country Chair, Shell Companies in Nigeria, and Managing Director, SPDC, Osagie Okunbor, said, “This is Shell working to power lives in Nigeria. The projects have changed the academic and physical landscapes in the three universities and linked the students and lecturers to the global learning arena.”
The facilities at FUTO include two state-of-the-art engineering design studios and a fully furnished 100-seater ICT lecture hall, equipped with computers and smartboards with dedicated power and water supplies. FUTO was selected for the project as part of the “institutional strengthening” in the catchment area of SPDC’s Assa North Ohaji South Gas Development Project. They were launched at a colourful ceremony attended by representatives of the Imo State Government and principal officers of the university.
Imo State Governor, Hope Uzodinma, represented by the Commissioner for Digital Economy and E-Government, Dr. Chimezie Amadi, said, “We deeply appreciate the efforts of our partners in NNPC, SPDC, Total Energies, and NAOC JV, who have invested in the future of Imo State by supporting this critical project. Your commitment to human capacity building aligns perfectly with our goals, and together, we will continue to drive innovation, skills development, and sustainable economic growth for our people.”
Okunbor’s address at the commissioning was read by General Manager, External Relations, Igo Weli, in which he expressed happiness “that the collaboration of SPDC, Joint venture partners, NCDMB, and FUTO has resulted in this successful social investment project that demonstrates our commitment to improving access to quality education for every Nigerian.”
On his part, the Executive Secretary NCDMB, Engr. Felix Omatsola Ogbe, called on Nigerian institutions to domesticate the advancements in AI and other technologies.
“Our AI must understand Igbo, Hausa, Efik, Yoruba, and other local languages,” he said, speaking through Dr. Ama Ikuru, the Director in charge of Capacity Building.
“We must leapfrog the innovations of other nations and become a net exporter of advanced technology to achieve the lofty ideals of Nigerian content development,” he added.
The Chief Upstream Investment Officer, NNPC Upstream Investment Management Services, Bala Wunti, said in his address which was read by the Senior Advisor Stakeholders Relations, Halimat Wilson, “Innovation thrives in an environment where ideas can be freely exchanged and developed. The Engineering Studio and ICT Hub is designed to be such a place where students, researchers, and faculty can collaborate on projects, share knowledge, and push the boundaries of what is possible.
Welcoming guests earlier, FUTO Vice Chancellor, Prof Nnenna Oti, thanked the sponsors of the project “for a landmark donation” to the university.
The Shell Companies in Nigeria have been education since the 1950s through scholarships and other initiatives. These efforts have resulted in the award of thousands of secondary, undergraduate and postgraduate scholarship awards, provision of educational infrastructure and establishment of sabbatical and internship programmes as well as centres of excellence in several universities.