Paper Review - Friday, July 30, 2010
SEC may step into Stock Exchange crisis
An opportunity appears to have been opened for the Arunma Otteh-led Securities and Exchange Commission (SEC) to push its agenda of full regulatory oversight following a fresh allegation of financial impropriety against the management of the Nigerian Stock Exchange (NSE) which grossed a hefty N42.2 billion income in four years. The SEC is in possession of a strongly worded petition sent by Aliko Dangote, a very senior council member of the Nigerian Stock Exchange that could force it to open investigations into the finances of the Exchange, and test Otteh’s resolve to ensure that SEC performs its market regulatory role effectively. On Tuesday, an academic and member of Central Bank of Nigeria’s Monetary Policy Committee, Doyin Salami, expressed concern over regulatory slacks in the market, challenging SEC to begin to bite to bring corporate governance sanity to the market, especially its managers. A SEC source said the petition appears to express deeper concerns over the financial management and health of the Exchange, particularly what he described as “corporate governance and transparency challenges” in the financials. Independent investigations yesterday revealed that the Exchange’s auditors had raised a 20-point query over the 2009 accounts and have, therefore, refused to sign and pass them, as satisfactory answers to the query are yet to be provided by NSE management. In the petition seen by BusinessDay, the NSE management is accused of not presenting to the council or members the audited accounts, seven months into the current financial year. It is also accused of “not presenting to the Finance and General Purpose Committee, interim financial statements for the first and second quarters of 2010.”
http://businessdayonline.com/index.php?option=com_content&view=article&id=13230:sec-may-step-into-stock-exchange-crisis-&catid=1:latest-news&Itemid=18
MEND threatens fresh attacks on oil facilities
THE Movement for the Emancipation of the Niger Delta (MEND) has threatened fresh attacks on oil facilities in the Niger Delta over what it believes is the slow pace of action by the administration of President Goodluck Jonathan in tackling the problems of the oil region. The militant group also insisted on the retention of Prof. Wole Soyinka as part of the Aaron Team since, in their words, “his presence and guidance through this stage will be invaluable to the credibility of any talks with the Federal Government.”
MEND, which said it always preferred dialogue to armed conflict, has confirmed that though there has been some indirect contact with government, it would not waste its time and energy on what it described as “aimless talks, which avoid the sore issue of resource control.” The Nobel laureate had last week during the 13th Professor Wole Soyinka Lecture organised by the National Association of Seadogs (NAS) allegedly threatened to pull out of the Aaron Team if MEND fails to resume talks with the government by the end of this month. MEND spokesperson, Jomo Gbomo, in an online interview with The Guardian, said that Soyinka's comments might have been informed by his frustration over inactivity regarding the talks with which he had been associated. This inactivity, according him, is solely the fault of the government, which believes agitation in the Niger Delta can be quelled by “bribing criminals and traitors.”
“Professor Soyinka was approached by MEND to volunteer his presence as an observer to our anticipated talks with the Nigerian government on account of his unblemished reputation as a fair campaigner for justice in Nigeria. His presence and guidance through this stage will be invaluable to the credibility of any talks,” said Gbomo.
http://www.guardiannewsngr.com/index.php?option=com_content&view=article&id=18449:mend-threatens-fresh-attacks-on-oil-facilities&catid=1:national&Itemid=559
SEC says Afribank, executives manipulated 2007 public offer
The Securities and Exchange Commission (SEC) yesterday accused Afribank and its senior executives of manipulating the bank’s December 2007 public offer in an elaborate scheme that was deliberately designed to buy back its shares deceive the market. In doing this, SEC said Afribank contravened the Investment and Securities Act 2007. It also alleged that Afribank also perpetrated a fraud in connection with the purchases and sales of Afribank shares. A statement issued by the SEC last night said : “Afribank made a Public Offer (“Public Offer”) that closed in December 2007. After the Public Offer, Union Bank advanced credit facilities to three stock broking firms, Fidelity Finance Limited, Spring Capital Limited and Falcon Securities Limited, and three subsidiaries of Union Bank Union Trustees, Union Assurance, and USL Nominees. “These entities bought Afribank shares in the names of 1,258 subscribers, which accounted for 66.4% of the public offer. Subsequently, all six (6) entities repaid their loans to Union Bank, using funds made available to them through four (4) Afribank related entities and subsidiaries. Then on the instruction of the Afribank MD, the Afribank shares held by the 1,258 subscribers were consolidated to reflect beneficial ownership of nine (9) companies owned by the Bank and its directors in a total of fourteen (14) accounts. “These actions are alleged by the SEC to constitute false trading. False trading is prohibited by the ISA in provisions that prohibit activities that may create a false or misleading appearance of active trading by engaging in the purchase or sale of a security that does not involve a change in the beneficial ownership of the security. Also allegedly violated is the general fraud provisions that prohibit the employment of a device, scheme or artifice to defraud that would operate as a fraud or deceit on any person in connection with the purchase or sale of a security”. The below listed seventy-one entities have been sued in court for their varying roles and responsibilities in the above alleged schemes.
http://businessdayonline.com/index.php?option=com_content&view=article&id=13229:sec-says-afribank-executives-manipulated-2007-public-offer-&catid=1:latest-news&Itemid=18
CBN reads Riot Act to bank debtors
Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, has said there is no hiding place for recalcitrant banks’ debtors as new arrangements had been put in place to ensure full recovery of debts. Speaking on Thursday, at a seminar for finance correspondents and business editors in Benin-City, Edo State, Sanusi disclosed that part of the measures was the Asset Management Corporation of Nigeria (AMCON), which would come on stream in the next few weeks to handle debtors, adding that every legal instrument would be exploited to get the money back to the system. He emphasised that while it was not a crime to borrow money from the banks, it was imperative that they pay back the loans as at when due. The CBN governor regretted that larger percentage of the N1.5 trillion owed the 10 sick banks in the country, were not non-performing, stressing that every one that stole money or indebted to any of the banks in the country would face the consequences. “It is not a crime to borrow money from the banks. However, it becomes criminal when you refuse to pay back. This is what the AMCON that will soon be established is set to do. It will buy over the non-performing loans and the debtors are expected to enter into agreement with it to restructure their debts. Certainly AMCON will explore all legal avenues to recover the debts”, he stated. Sanusi disclosed that the efforts of the banks and relevant security agencies had so far resulted in the recovery of over N300 billion, adding that efforts would be intensified to recover other debts.
http://www.tribune.com.ng/index.php/news/8985-3
Screening of NCC board members: Senate dissolves committee on communications
For the first time since the tenure of the present Senate, the Senate on Thursday dissolved its committee on communications over “attempts to ridicule” the upper chamber. The 54 committees of the Senate were constituted in 2007 shortly after the inauguration of the Senate on June 5, 2007. The committee, headed by Sylvester Anyanwu (PDP-Imo) had submitted a report of the purported screening of members of the Governing Board of the Nigeria Communications Commission (NCC) to the Senate for consideration. The Senate, which immediately commenced consideration of the report, however, stopped mid-way following the disclosure by a member of the committee, Umar Argungun (PDP-Kebbi North), that no screening took place. Argungun wondered how the committee chairman came about the report being presented to the Senate. Another member of the committee, Tanko Ayuba (PDP-Kebbi), said that he signed the report of the screening only “this morning”. “This is the time to own up. I signed this morning but didn’t attend any screening,” he said. The vice chairman of the committee, Joseph Akaagerger (PDP-Benue) appealed to the Senate to go into a closed door session to resolve the issue but was rejected by Senate President David Mark. Mark said: “There will be no closed door session. The committee has put itself in an embarrassing situation. I am sad by this. One committee should not ridicule the Senate. “I am truly disappointed in the committee. None of the committee members can exonerate himself and all of you appended your signatures. “I am short of words but insist that we will not go into closed session. This committee stands dissolved.” Anyanwu, who pleaded against the dissolution of the committee, said: “We feel sad but can still correct the short-coming”. However, after much pressure from Deputy Senate President Ike Ekweremadu and Mohammed Maina, Deputy Chief Whip, Mark agreed to go into a closed door session. But after a closed door session that lasted about 45 minutes, the Senate President announced the disbandment of the committee, adding that the members of the governing board of the NCC, who were at the Senate gallery to witness their confirmation, would be screened openly by the Senate.
http://businessdayonline.com/index.php?option=com_content&view=article&id=13224:screening-of-ncc-board-members-senate-dissolves-committee-on-communications&catid=85:national&Itemid=340
CBN to probe own-officials’ role in banking crisis
TO avert a repeat of the banking crisis witnessed in the country between 2003 and 2009, the Central Bank of Nigeria (CBN) yesterday announced that it has concluded plans to investigate the role played by officials of the apex bank in paving way for the development. Any official indicted, whether retired or still serving, will be penalised to serve as deterrent to others. Also on the card is the promise of the apex bank to pursue the prosecution of all characters indicted in the mismanagement of these banks to ensure they are jailed. The CBN Governor, Mr. Sanusi Lamido, who dropped the hints said arrangement has been concluded for a public hearing on the matter by the National Assembly, principally to receive documents and obtain testimonies of actors at the apex bank and other regulatory bodies such as the Nigerian Deposit Insurance Corporation (NDIC) during the period preceding the crisis that affected the nation’s financial industry. The hearing comes up soon. Sanusi spoke in Benin City, the Edo State capital at the on-going 15th edition of the CBN seminar for finance correspondents and business editors.
He explained that the investigation has become imperative because of suspicion that some managers at the apex bank failed to act when red flags were flagged by their subordinates concerning danger signals in some banks. The development, he revealed, created a precarious situation in the industry such that by the time the current management at the apex bank intervened by August last year, most banks in the country were operating in circumstances of bubble capital; non-performing loans and thievery.
Sanusi said: “ By the time we intervened in the banking crisis in Nigeria last year, there were more than N900 billion loans booked. Out of this figure, 90 per cent was non-performing. These were loans with no tangible collateral. The problems were bubble capital; non–performing loans and theft.
“Some of the banks were covering their loans with commercial papers. Some innocent people even had loans booked in their names when they never applied or obtained any loan. That is why with the benefit of hindsight, because I know where the dead bodies are hidden, I went for them immediately I was appointed CBN governor.
http://www.guardiannewsngr.com/index.php?option=com_content&view=article&id=18445:cbn-to-probe-own-officials-role-in-banking-crisis&catid=1:national&Itemid=559
Labour opposes Sanusi on deregulation, electricity tariffs
RECENT policy pronouncements by the Governor of Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, are drawing the ire of the Nigeria Labour Congress (NLC), which described them as ‘anti-people.’
Also, Prof. Pat Utomi and a teacher at the Obafemi Awolowo University (OAU), Ile-Ife, Prof. Oluwagbemiga O. Jegede, on Wednesday said the problem of power may persist for much longer in the country unless the Federal Government decentralise the sector. The Head, Information Department of NLC, Onh Iduh, in a statement in Abuja yesterday, berated the CBN governor for not having an adequate grasp of the excruciating economic hardship that Nigerian workers are going through, which is occasioned by poor pay, infrastructure decay and general apathy to the wellbeing of the working class.
NLC said: “The CBN governor had on Tuesday, July 27, 2010, while receiving the Group Managing Director of NNPC, Mr. Austen Oniwon, stated that deregulation of the downstream sector of the petroleum industry was inevitable. The following day (July 28, 2010), Sanusi was again quoted to have called for an immediate increase of 200 per cent in electricity tariff. Earlier in June, Sanusi had called on the Federal Government to remove subsidies on petroleum products because he felt the beneficiaries of subsidy are members of an oil cabal and not the people for whom it was meant.”
The NLC declared that it sees these recent comments by Sanusi as highly misleading and totally anti-people in the face of excruciating mass poverty in the land It stressed that while Congress held Sanusi in very high esteem for what it interpret to be his deep sense of patriotism, “we are gradually becoming very uncomfortable with his utterances, which have come to portray him as an arrowhead of government’s anti-people policies.” It was of the view that Sanusi fails to understand the fundamentals that underpin the two central sectors that affect the Nigerian people directly. Explaining its belief on the direction that electricity tariffs should go, NLC maintained that the basic step government needs to take is to first improve on power generation and distribution capacity before coming to the question of pricing.
It added: “It would be illogical and totally unreasonable to charge higher tariffs when Nigerians are at the moment paying for services they are not enjoying, apart from the huge hard-earned resources they expend daily on fuel to power generators.”
http://www.guardiannewsngr.com/index.php?option=com_content&view=article&id=18450:labour-opposes-sanusi-on-deregulation-electricity-tariffs-&catid=1:national&Itemid=559
Firm faults FAAN over debt claims
Following Senate’s outcry, last week, over the insolvency state of the Federal Airports Authority of Nigeria (FAAN) occasioned by debt and alleged mismanagement, Maevis Nigeria Ltd, the concessionaire in charge of airport operations’ automation, has said the agency (FAAN) was frustrating its efforts at carrying out its duties, especially, as it relates to recovery of debts. Maevis, which is also saddled with the responsibility of ensuring compliance with concession agreement terms by other FAAN’s concessionaires, said it had generated over N17 billion to the coffers of FAAN between August 2008 and June 2010 since it took over the implementation of automated invoicing and collection of four streams of income at Lagos airport. The company is making these claims following allegations that it owes FAAN N4 billion. While Maevis insists that it is not indebted to FAAN, a document made available to BusinessDay shows that the firm may have been advised by the government agency not to request airlines to pay up debts but for current services on a pay-as-you go basis. A letter entitled: ‘Re: Final Demand Letter’ (aeronautical and non-aeronautical invoices) dated July 24, 2010 with Ref. No. FAAN/HQ/GM/CAR/DFA/VOL.1, signed by Nana Aliyu for director of finance and accounts of FAAN to the managing director of Maevis, showed that FAAN had informed Maevis to only demand from airlines current dues and not old debts. According to the letter, the ministry of aviation has through a committee directed that “all outstanding debts owed by domestic airlines should be settled over 36 months; it is only the current debt which is due for payment on a pay-as-you-go basis. The above is for your information and necessary action, please”. The letter, which was written to Maevis referred to a letter it (Maevis) sent to Arik Air on June 18, 2010 on payment of charges. According to Maevis, it is frustrating when the firm receives a letter from FAAN not to request from airlines old debts and when the same agency is accusing it of not collecting same. “Maevis is not in anyway indebted to FAAN. How can we also effectively carry out our duties when the agency is not willing to change from the old ways of doing business?” Tunde Fagbemi, managing director, Maevis, had told the Senate in Abuja. As at today, debt to FAAN from airlines and various concessionaires amount to over N17.9 billion apart from those that are yet to be accounted for. Anyim Udeh, chairman, Senate Committee on Aviation who raised the alarm that FAAN may soon collapse like Nigeria Airways, last week, revealed that airlines owe FAAN N9.266 billion; management concessionaires owe N4.747 billion; handling agencies owe N1.757; government agencies, N562 million; oil marketers owe N433 million while others that were not mentioned owe N1.172 billion.
http://businessdayonline.com/index.php?option=com_content&view=article&id=13222:firm-faults-faan-over-debt-claims&catid=85:national&Itemid=340
CBN gov orders refund of N4bn Edo statutory allocation
THE Governor of the Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, has ordered officials of the bank to deduct N4 billion from a commercial bank, being the amount the bank illegally deducted from the statutory allocations of the Edo State government and refund same to the state. Sanusi gave the directive on Thursday, when he paid a visit on the Edo State governor, Adams Oshiomhole, at the Government House, Benin City. The CBN governor said it was wrong for the commercial bank to continue to hold on to the said deduction, even after it had been directed to pay the money. The directive followed complaint by Oshiomhole that the commercial bank had illegally deducted about N4 billion from the allocations of the state government and that all efforts made to recover the money, even after the apex bank had earlier gave the instruction, proved abortive. The CBN boss said since the concerned bank was yet to obey the directive of the CBN, officials of the apex bank should “debit at source and write us immediately.” According to him, “if there is a directive from the CBN that the payment be done, there is no reason why they should not do that, once we are sure of that, we debit at source and inform the banks.” The CBN boss had earlier said the ongoing reforms in the banking sector and other sectors of the economy of the country was a good omen and urged Nigerians to support it. Responding, Governor Oshiomhole commended the courage of the CBN boss in insisting on certain reforms in the banking sector, just as he said his administration was committed to reviving the tax system in the state which, he added, had gone a long way in boosting the financial standing of his administration. Oshiomhole urged the people to defend the changes going on in the country’s economy, otherwise changes would not occur and even if they occurred they could easily be reversed.
http://www.tribune.com.ng/index.php/news/8996-cbn-gov-orders-refund-of-n4bn-edo-statutory-allocation
Air Nigeria introduces new incentives for travellers
AIR Nigeria has introduced a special promotion to reward its eagleflier members who book and pay as well as check in for their flights using the online portal. With the introduction of the promotional offer, eagleflier members who quote their frequent flyer number at the point of online reservation will accrue additional bonus miles when they conclude the booking, and make the payment online. These miles can be redeemed for reward tickets, flight upgrades to business class, payment for excess baggage and other benefits. Announcing the special offer for the airline’s loyal passengers, the Head of Marketing, Mrs. Olufunmilayo Aiyepeku said that the promotion sought to reward customer patronage, especially patronage from loyal eagleflier members and also encourage non members to come and experience the many exciting rewards of flying consistently with Air Nigeria. Aiyepeku said: “Air Nigeria is a responsive airline that is continually seeking ways of improving travel convenience by aligning its systems with modern practices. Our discerning passengers have the added advantage of making their secure transactions online on our website– www.myairnigeria.com - at their convenience as well as being rewarded when they do so”. She noted further that passengers that were yet to enroll as eagleflier members could benefit from the ongoing promotion by picking up membership forms and filling out the required information at any of the airline’s ticketing offices, onboard any Air Nigeria flight across its route network or enrolling on the Air Nigeria website. The promotion is slated to run for three months from July 19th to end on October 19th 2010.
http://www.guardiannewsngr.com/index.php?option=com_content&view=article&id=18355:air-nigeria-introduces-new-incentives-for-travellers&catid=32:business-travel&Itemid=563
PPPRA, PENGASSAN accuse ‘greedy’ marketers of foul play in rumoured fuel scarcity
Stakeholders in the oil and gas sector of the economy have debunked rumours making the rounds that the nation is about to face another round of fuel scarcity. Specifically, oil workers under the aegis of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have accused those they referred to as “greedy marketers” of being behind the rumours, saying it was being peddled to create chaos and panic buying for profiteering purposes. However, the rumours may not be unconnected with the recent claims by the National Union of Petroleum and Natural Gas Workers (NUPENG) that the formula adopted by the Petroleum Products Pricing Regulatory Agency (PPPRA) for importing products into the country is “disappointing”, following which the union had threatened to stage a protest in Abuja. But reacting to the rumoured scarcity on Thursday, Victor Ononokpono of the PPPRA, said over 3 billion litres of fuel is in the system, saying there was no basis for any scarcity. “Some unpatriotic industry players are merely creating unnecessary panic. We have alerted the National Security Adviser (NSA) and the State Security Service (SSS) in case these people have the intention to hoard or divert product”. His position tallies with Sylvarius Okoli, chairman, Depot and Petroleum Products Marketers’ Association (DAPPMA), who also told BusinessDay that available product in the system was enough to serve domestic needs for the next 30 days, saying there was no cause for alarm. President of PENGASSAN, Babatunde Ogun, also ruled out the likelihood of fuel scarcity in the country, alleging that “some greedy persons” were the ones behind the rumour for profiteering. Ogun, who condemned the rumour, said that the marketers were embarking on discrediting reports on the fuel situation, to create panic buying so as to make profit out of the chaos that can arise from it. “Some greedy marketers who are fond of speculating in order to create fear in Nigerians and cause panic buying and hoarding in order for them to cheat Nigerians and make more profits are behind the rumour,” Ogun said.
http://businessdayonline.com/index.php?option=com_content&view=article&id=13221:pppra-pengassan-accuse-greedy-marketers-of-foul-play-in-rumoured-fuel-scarcity&catid=85:national&Itemid=340
Daniel, Bankole in open feud over Ota bridge
DECORUM was thrown away yesterday (Thursday) as the Speaker of the House of Representatives, Dimeji Bankole and the Ogun State Governor, Gbenga Daniel, engaged in hot verbal brick-bats at the commissioning of the Sango-Ota bridge. Trouble started when Governor Daniel who arrived at the scene in the company of the Minister of Works, Sanusi Daggash, took the microphone at the commissioning and seemingly put down the Speaker, saying: “People should not hail Bankole over the completion of the fly-over and that the actual person who deserves to be praised is former President Olusegun Obasanjo.”
The governor added that Bankole had no hands in the Sango-Ota bridge project and therefore deserves no praise-singing or accolades as the crowd at the ceremony wanted to give.
According to him: “Let us give honour to whom honour is due. Former President Obasanjo and the late Umaru Musa Yar’Adua and Goodluck Jonathan deserve kudos for the project. What is the input of our younger brother who is parading himself as the owner of the project? Please tell him to go and look for another project.” After this, Daniel began singing apparently to further disparage the Speaker. But while this was going on, Bankole who arrived at about 4.30 p.m., apparently having been briefed about Daniel’s snide remarks was visibly angry. He went straight to meet the governor, who was about to leave he venue, inside his vehicle, shouting that Daniel was going nowhere. He also demanded from Daniel why he should speak ill of him in the public. The governor’s security men at that point attempted to prevent the Speaker from entering the bus while the Speaker’s aides forcefully attempted to pave way for him. The resultant effect was confusion as those present started scampering to safety.
Bankole eventually had his way into the bus in which Daniel was about to drive away and spoke angrily to the governor for slighting him. Later, tempers were calmed and the guests returned to their commissioning venue. Speaking to journalists after he returned from the venue of the incident at the Presidential Wing of the Murtala Muhammed Airport, Lagos, Bankole denied that there was any altercation between him and Daniel.
http://www.guardiannewsngr.com/index.php?option=com_content&view=article&id=18441:daniel-bankole-in-open-feud-over-ota-bridge&catid=1:national&Itemid=559
Senate passes INEC Act 2010
The Senate on Thursday passed the INEC Act 2006 (Repeal and Re-enactment) Bill 2010. The passage of the Bill came after the Senate debated and considered the report of the conference committee on the INEC Act 2006 (Repeal and Re-enactment) Bill 2010. The Bill seeks to repeal the 2006 Act and re-enact the 2010 Bill which will control wastages of fund, streamline election days and bring about free, fair and credible elections in the future. Senate President David Mark in a remark said that the passage of the Bill would instill confidence of the people in the electoral process and urged everybody to ensure that they lived up to their responsibilities. The Senate also passed the 2010 NDDC harmonised budget of N240.58 billion and adjourned plenary session till September 21. Similarly, the House of Representatives on Thursday passed the NDDC 2010 budget of N240.5 billion as against N236.5 earlier submitted by President Goodluck Jonathan. Jonathan had submitted a proposal of N236.6 billion to the House of Representatives but the House Committee on NDDC raised it to N240.5 billion. The sum of N5.8 billion, N6.9 billion, N1.7 billion and N226 billion was for personnel cost, recurrent expenditure, capital expenditure and development projects, respectively. The Senate on July 28 rejected the NDDC budget for want of adequate information on the total expenditure and ambiguity in some of the clauses. The House like its counterpart criticised the late submission of the budget as the National Assembly was preparing for its recess. The sum of N55 million was allocated to recruitment services, N144 million for National Health Insurance Scheme (NHIS) while 12.5 percent contributory pension would gulp N571.2 million. The directorate of education, health and social welfare was allocated a total of N197.5 million. Meanwhile, the House has adopted its conference committee report on the amendment of the Electoral Act and re-enact the INEC Act to regulate the conduct of federal, state and area council elections.
http://businessdayonline.com/index.php?option=com_content&view=article&id=13223:senate-passes-inec-act-2010&catid=85:national&Itemid=340
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