A Federal High Court in Lagos has adjourned till Dec. 4, hearing in a dispute between MTN Nigeria and the Central Bank of Nigeria over alleged illegal repatriation of $8.1 billion by the telecoms company.
Justice Saliu Saidu also adjourned till Nov. 8, hearing in a case of $2.0 billion tax non-payment made against MTN Nigeria by the Attorney-General of the Federation (AGF).
MTN filed the suits. It is seeking an injunction to restrain the CBN and AGF from taking further actions to reclaim the alleged debts.
The CBN alleged that the telecoms firm improperly repatriated dividends. The apex bank requested that MTN should return $8.1 billion to its coffers.
On the other hand, the AGF claimed that MTN did not pay taxes on foreign payments and imports of approximately $2.0 billion. It demanded that the company should pay the sum.
MTN, however, denied the allegations.
On Dec. 4, the court will hear an interlocutory application by the MTN seeking to retrain the CBN from taking steps to reclaim the alleged debt.
The court will also hear an application by the CBN challenging the jurisdiction of the court to entertain the case.
Chief Wole Olanipekun (SAN) appeared for the MTN while Mr Seyi Sowemimo (NAN) appeared for CBN.
Tag: CBN
CBN
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Alleged $8.1 billion repatriation: Court hears MTN vs CBN case Dec. 4
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CBN announces new minimum capital base for Microfinance Banks
The Central Bank of Nigeria (CBN) has announced N5 billion as the minimum capital requirement for national microfinance bank in the country.
In a circular released and signed by the CBN Director of Financial Policy and Regulation Department, Mr Kevin Amugo, it was disclosed that the capital base for unit microfinance bank is N200 million, while for state microfinance bank is N1 billion.
According to the circular, “the new minimum capital requirement takes immediate effect for new applications while existing microfinance banks shall be required to FULLY comply with effect from April 01, 2020.”
The CBN explained that these new requirements became imperative as a result of the role of microfinance banks in economic growth and development.
Quoting the Microfinance Policy, Regulatory and Supervisory Framework introduced in December 2005 and revised in 2011, the apex bank explained that the key focus of the policy was, among others, to increase financial inclusion rate in the country; improve access to financial services for the active rural poor; and pursue poverty eradication.
“The microfinance banking sub-sector, in pursuit of the above objectives, had been contending with such challenges as inadequate capital base, weak corporate governance, ineffective risk management practices, dearth of requisite capacity and mission drift.
“The CBN has reviewed the state of health of the sub-sector and is of the view that microfinance banks, as presently constituted, would be unable to meet the critical targets set out in the Microfinance Policy, hence the need for specific reforms to strengthen the sub-sector and reposition microfinance banks towards improved performance,” the bankers’ bank said.
The circular said to meet the new requirements, existing microfinance banks are expected to explore the possibility of mergers and acquisitions and/or direct injection of funds.
The Revised Regulatory and Supervisory Guidelines for Microfinance Banks, Code of Corporate Governance for Microfinance Banks and sector-specific Prudential Guidelines for Microfinance Banks would be issued in due course.
Institutions that meet the capital requirements as well as demonstrate the existence of strong corporate governance in their operations would be allowed to open account at the CBN office within their state of operation. Such institutions would also be channels for micro funding activities of the CBN and the Development Bank of Nigeria. -
$8.1bn transfer: Court fixes date to hear MTN’s case against CBN
A hearing in the court case between MTN and the Central Bank of Nigeria in a dispute over the alleged transfer of $8.1bn of funds by the telecom firm has been set for October 30, a lawyer for MTN said on Friday.
MTN has denied claims that it depleted Nigeria’s foreign exchange reserves, the South African telecom group’s lawyer, Wole Olanipekun, was quoted by Reuters as saying on Friday, after the central bank accused the company of moving $8.1bn abroad in an ongoing row with the bank, which is battling to shore up its currency.
Nigeria is MTN’s biggest market and accounts for a third of its annual core profit.
The CBN had said in its counterclaim to the court that MTN contributed to depleting the country’s reserves through the purchase of dollars via unapproved certificates. MTN has denied any wrongdoing.
Nigeria faced a severe shortage of dollars in 2016 caused by low oil prices, leading to a sharp devaluation of the naira. The currency crisis triggered a recession, which the country emerged from last year.
MTN said in a court filing on Thursday that it paid the naira equivalent to purchase a total of $8.1bn from the central bank in several tranches over a nine-year period and that it did not negatively impair the reserves.
Nigeria has burnt reserves to keep the naira stable. Central bank data on Thursday showed that the bank spent $2.2bn in the month to October 16 to defend the currency, while the reserves fell to an eight-month low of $42.8bn.
Central bank officials met with MTN and its lenders this week to discuss the dispute. The bank said it was looking for a resolution.
The Minister of Information and Culture, Lai Mohammed, was quoted by Reuters on Wednesday as saying that the central bank and MTN could soon agree a deal.
A separate hearing between MTN and the Attorney General of the Federation over an alleged $2bn unpaid tax bill has been scheduled for November 8 at the same court in Lagos, Olanipekun told Reuters -
Breaking: 4 months after, Senate confirms CBN Deputy Governor
The Senate on Wednesday finally confirmed the appointment of Mr. Folashodun Adebisi Shonubi as Deputy Governor of Central Bank of Nigeria (CBN).
TheNewsGuru (TNG) reports Shonubi’s confirmation followed a report of the committee on banking, insurance and other financial institutions on his nomination by Senator Rafiu Ibrahim.
Senator Emmanuel Paulker seconds that the Senate do receive and consider the report of the committee on the nomination of Shonubi for appointment as the Deputy Governor of CBN.
TNG recalls President Muhammadu Buhari had in June approved the nomination of Shonubi as Deputy Governor at the CBN subject to Senate confirmation.
The President wrote the Senate a month after seeking confirmation of Shonubi. The letter was read by the Senate President, Bukola Saraki, after a one-hour closed-door session.
The Senate, however, proceeded on an annual recess, suspending the confirmation of Mr. Shonubi. Also billed for confirmation before the Senate went on the recess, is the confirmation of Dr Muiz Adeyemi Banire as Chairman of the Board of Assets Management Corporation of Nigeria.
Shonubi was the Managing Director of the Nigeria Inter-Bank Settlement System Plc (NIBSS) – the financial payments, facilitation and settlement platform.
NIBSS has been instrumental to the growth in electronic payments in the Nigerian financial industry.
Mr. Shonubi holds double Masters Degrees respectively in Business Administration and Mechanical Engineering, from University of Lagos.
He is a resourceful Information Technology-driven banker with over 22 years professional experience.
Prior to his appointment as the Managing Director of NIBSS Plc., Mr. Shonubi was Executive Director, Information Technology and Operations at Union Bank of Nigeria Plc; a member of the Board of Union Homes and Director, Information Technology and Corporate Services in Renaissance Securities Nigeria limited, with responsibility for the Group’s IT infrastructure in Africa.
Mr. Shonubi also had a stint with Citibank Nigeria Limited as its Head, Treasury Operations (1990-1993).
Between 1999 and 2007, he worked in MBC International as Deputy General Manager and supervised their IT operational platforms. He served in First City Monument Bank Limited as Vice – President and in Ecobank Nigeria Limited as Executive Director.
He has served on a number of sub-committees of the Bankers’ Committee, including the Ethics and Professionalism sub-committee.
The nomination of Mr. Muiz Banire Adeyemi By President Buhari for appointment as Chairman of the governing board of the Assets Management Corporation of Nigeria (AMCON) was also confirmed.
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$8.1bn fine: Emefiele hints on possible reduction, settling issues 'amicably' with MTN
The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele on Sunday said the apex bank may reduce the $8.1billion it ordered MTN Nigeria to repatriate as part of efforts to resolve the crisis.
Recall that the MTN and the CBN are in a dispute over the transfer of $8.1 billion of funds which the bank said the company had sent abroad in breach of foreign-exchange regulations. Nigeria accounts for a third of MTN’s annual core profit.
“I don’t think it will be staying at $8.1 billion,” Emefiele said during a visit to London, adding he expected the issue to be dealt with “amicably and equitably”.
“I want to believe that the figures will reduce. Whether they will be dropped completely, I honestly cannot say at this time.”
Emefiele said the CBN had received documents two weeks ago from MTN and four lenders involved in the case –
Standard Chartered, Stanbic IBTC Bank, Citibank and Diamond Bank – and was in communications with all parties involved.
“The central bank will be examining these, then it will be escalated up to my level,” he said, adding he expected to get the results in a couple of weeks.
The two sides are locked in a court dispute over the transaction. The central bank filed a counter-claim on Friday to a court request by MTN, which is seeking to stop the bank from forcing it to bring back the money.
Emefiele said the MTN case was a one-off, and the central bank was not looking at transactions involving any other companies operating in Nigeria.
“We respect the sanctity of these companies,” he said.
Shares in MTN lost almost five per cent over the past week.
Emefiele also said the CBN would continue to intervene in the foreign exchange markets, adding that he believed in a stable exchange rate regime.
Nigeria has been battling to defend its currency and shore up its reserves of around $44 billion, hobbled by lower oil prices. At the same time, the oil exporter has suffered from high inflation, which edged up to 11.2 percent at its last reading – well above the central bank’s 6-9 percent target.
Emefiele said Nigeria’s current stance of monetary tightening would continue.
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Spraying, hawking naira notes will land you in jail, Bankers Committee warns
The Bankers Committee on Friday warned against bastardising the national currency, saying those who spray and hawk the naira notes at parties risk going to jail.
TheNewsGuru (TNG) reports mobile courts are to try those bastardising the national currency, and if found guilty, sent to jail.
Issuing the warning after its meeting in Lagos, the Bankers Committee said the mobile courts would be deployed nationwide to try those mishandling the currency.
Spokesman of the Central Bank of Nigeria (CBN), Isaac Okoroafor, said the Police and Ministry of Justice would be involved in the operation.
“If a celebrant is dancing and you spray him/her, you may go to jail from the party venue because the law enforcement agents will be there, waiting to arrest you.
“It is the duty of law enforcement agencies to catch offenders and take them to court. Our collaboration with the police will intensify as we move to implement the mobile court for offenders,” he stated.
Admonishing Nigerians on how to give cash gifts at parties, Okorafor said: “If you want to give, put the money in an envelope, and give it the celebrant”.
“Let’s know that anybody hawking and writing on the naira will face six months in jail or N50,000 or both,” he added.
Mrs. Handa Ambah, Managing Director of First Securities Discount House (FSDH) Merchant Bank, said people selling naira notes would be punished severely.
“We need to let them know that this is money. The fact that you cannot spray money at parties does not mean that you cannot put money in an envelope and pass it to the celebrants,” she said.
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Hawk, spray naira notes, go to jail from party venue, CBN warns Nigerians
…to deploy mobile courts at strategic places across Nigeria
The Bankers Committee on Thursday warned those who “spray” naira notes at parties risk going to jail from the party venue.
Issuing the warning after its meeting in Lagos, the Bankers Committee said the mobile courts would be deployed nationwide to try those mishandling the currency.
Central Bank of Nigeria (CBN) spokesman Isaac Okorafor said the police and the Ministry of Justice would be involved in the operation, adding:
“If a celebrant is dancing and you spray him/her, you may go to jail from the party venue because the law enforcement agents will be there, waiting to arrest you.
“It is the duty of law enforcement agencies to catch offenders and take them to court. Our collaboration with the police will intensify as we move to implement the mobile court for offenders.”
Admonishing Nigerians on how to use cash as gift, Okorafor said: “If you want to give, put the money in an envelop, and give it the celebrant. Let’s know that anybody hawking and writing on the naira will face six months in jail or N50,000 or both.”
Managing Director of First Securities Discount House (FSDH) Merchant Bank Mrs. Handa Ambah said people selling naira notes would be punished.
She said: “We need to let them know that this is money. The fact that you cannot spray money at parties does not mean that you cannot put money in an envelope and pass it to the celebrants.”
Access Bank Managing Director Herbert Wigwe said the committee also agreed to channel a large part of the Cash Reserve Ratio (CRR) to agriculture and manufacturing to promote agricultural value-chain and manufacturing.
Union Bank Managing Director Emeka Emuwa said the committee agreed to deepen access to financial services adding that there is a draft framework being designed to ensure that more people have access to banking services.
Emu said access to financial services remains a big incentive to the economy and empowerment tool for the citizenry.
CBN Director Banking Supervision Ahmad Abdullahi said there is still relative confidence in the economy, in view of the rise in the prices of crude oil and the level of external reserve.
He said all hands must be on the deck to sustain the momentum.
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CBN clears air on ‘depleting’ foreign reserves, 2019 political spending
The Central Bank of Nigeria (CBN) on Monday explained that the recent reduction in the level of the country’s foreign reserves have anything to do with political activities.
Director of Corporate Communications of the CBN, Mr. Isaac Okorafor gave this explanation at the 13th Abuja Chamber of Commerce Mines and Industries (ABUCCIMA) Trade Fair in Abuja said foreign reserves fell “because of global squeeze on emerging markets, which was consequent upon increasing interest rates in the United States of America.”
Okorafor noted that other developing and emerging markets like Turkey, Brazil, South Africa, Argentina and even China were facing similar dilemma.
Despite this squeeze, Okorafor assured that notwithstanding the fall, the present level of the NIgeria’s foreign reserve now stands at “$44 billion which is capable of financing between 14 and 17 months imports which is way above internationally acceptable three months.”
He also gave assurance to customer of defunct Skye Bank that their deposits were safe in Polaris Bank.
Okorafor stated that Polaris Bank was duly registered at Corporate Affairs Commission (CAC) and licenced by CBN.
He also told the audience at the fair that the overall impact of CBN’s numerous interventions, will continue to enhance the operational capacity of Small and Medium Enterprises (SMEs).
These interventions the CBN said “has translated into a reflation of our economy with attendant growth and development.”
The CBN he said will continue to ensure that it delivers on its core mandate of ensuring monetary and price stability. However, it cautioned that “it will also continually roll out proactive and innovative policies which would ensure that all economic sub-sectors especially the SMEs in Agribusiness receive the desired support.”
According to Isaac Okorafor “we are determined to ensure that Nigeria’s economy remains in a state of consistent growth even as we focus on economic diversification and national food sufficiency.”
In his response, President of ABUCCIMA, Prince Adetokunbo Kayode who was represented by Prof. Adesoji Adesugba disclosed that the Chamber has restructured and now operates through four Centres.
The prime Centre he revealed “is the Abuja Trade Centre (ATC). The other Centres are the Trade Dispute Resolution Centre (DRC), the Business Entrepreneurial Skills and Technology (BEST) Centre for Skills and Capacity Development as well as the Policy Advocacy Centre which is out to help MDAs to deliver on their respective mandates.
The 13th Abuja International Trade Fair Prince Adetokunbo Kayode said “seeks to Promote accelerated development of commerce and industry; Promote revitalization and diversification of the Nigerian economy by promoting the nation’s non-oil exports; Direct attention to the role of private sector in the Nigerian economy; Provide access to resources and technology findings; and Attract foreign investment into the Nigerian economy.
The ABUCCIMA boss expressed appreciation to the CBN for the apex bank’s swift response “which have succeeded in ridding our economy of sharp practices by some financial institutions or houses.”
In the area of Development Finance, Prince Kayode applauded the CBN for ensuring “the supply of finance to various sectors of the economy which has promoted the growth of the economy in a holistic manner making development, welfare improvement to proceed at a faster rate.” -
NSE listing: MTN likely to scrap Nigerian IPO after CBN, FG fines
The management of MTN Group Limited is considering cancelling its much-awaited listing on the Nigerian Stock Exchange (NSE) via an Initial Public Offering (IPO).
Some weeks ago, the Nigerian Communications Commission (NCC) said MTN agreed to list its shares on the local bourse before May 2019.
This was part of an agreement reach to reduce a $5.2 billion fine slammed on it in 2016 to $1 billion for failing to disconnect unregistered subscribers on its network.
Late August 2018, the Central Bank of Nigeria (CBN) directed MTN Nigeria to refund $8.1 billion to the country, claiming the firm did not properly repatriate the amount to South Africa some years ago.
Days later, the Attorney General of the Federation (AGF), Mr Abubakar Malami, said the company should pay $2 billion in tax arrears.
In a report on Tuesday, Bloomberg said the wireless carrier said it may no longer seek to raise capital through the IPO.
However, MTN is looking at other ways to trade the stock in Lagos, including a so-called introduction, in which existing shares are listed.
Quoting the Chief Financial Officer of MTN Group, Mr Ralph Mupita, in an interview in Johannesburg, the report said MTN’s board still needs to make a final decision.
“The IPO type of listing has become challenging under current market conditions,” Mr Mupita said, adding that, “We are exploring other options. The Nigerian business would not get fair value under current market conditions. A listing by introduction is the simplest way forward.”
MTN could complete the listing by the end of this year or first quarter of 2019, the CFO said. Despite the dispute with the central bank over the repatriation of $8.1 billion out of Nigeria and a separate tussle over $2 billion in back taxes, MTN is committed to a listing, said Mr Mupita.
“We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings,” Mr Mupita said. The central bank last week said it is considering new information provided by MTN and four banks into the outflows and that it expects to resolve the matter soon.
MTN’s shares pared an earlier gain of as much as 3.7 percent to close 2.1 percent higher at 89.40 rand in Johannesburg on Monday. In the weeks after Nigerian authorities challenged the transfer of funds, MTN plunged 35 percent, but the stock has since recovered about half of that drop.
“That cost our shareholders $5.5 billion,” said Mr Mupita. MTN’s investor base is about 44 percent South African. Other major shareholders are based in the US, the UK, Europe and the Middle East.
MTN still sees a great business case for Nigeria, Africa’s most populous nation, with less than a third of users currently on the internet, Mr Mupita said.
“We are engaging with authorities and investors and hope to reach a speedy resolution on the matter, to deal with the overhang on our share and the concerns of shareholders about Nigeria’s investment climate for foreign companies,” Mr Mupita said.
Nigerian authorities have come under criticism following an impasse with MTN and lenders including Citigroup Inc., Standard Chartered Plc, Standard Bank Group Ltd. and Lagos-based Diamond Bank Plc that threatened to spook investors.
“Investors are getting very nervous and the last thing Nigeria needs is for investors to be nervous,” said Mr Bismarck Rewane, CEO of Financial Derivatives Co., speaking from Lagos. The government should resolve the issue with MTN “as quickly as possible.”