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2009-08-24:News Reports for August 24, 2009 --- 001



CBN Begins Fresh Audit Of Banks

By Rotimi Durojaiye , Group Business Editor, Lagos

Anxiety still runs deep in the financial sector, as a fresh audit of the 24 banks begins on Tuesday, which may culminate in more sacks besides the five Managing Directors (MDs) who lost their jobs in the cleansing done by the Central Bank of Nigeria (CBN) on August 14.

Investigation showed that the CBN began last week another examination of the books of the five troubled banks - Intercontinental, Afribank, Finbank, Oceanic, and Union - to garner more evidence against the sacked MDs.

But sources in the banks countered that the examination should have been done before the hammer was applied to bring the MDs and bank debtors under public scrutiny.

The new audit will be on domestic and international operations, including credit lines; and the passports of officers in key departments have reportedly been seized to prevent them from travelling out of the country.

It is alleged that staff are being asked to implicate their former MDs in return for promotion.

It is also alleged that the audit is to get strong evidence which the CBN did not have before getting rid of the MDs.

"That, " said a source, "is the reason behind the spate of arrests of bank chiefs which as at last Saturday numbered about 15. Arresting and harassing them is aimed at getting all the evidence of 'mismanagement ' needed to nail the bank chiefs. "

It was learnt that the computers at the five troubled banks have been seized and the telephone lines bugged by security agents seeking information.

The CBN may have been jolted last week by the resistance put up by two of the banks former MDsww - Erastus Akingbola of Intercontinental, and Cecilia Ibru of Oceanic - who appear ready to fight the CBN to the last man.

Sources said the CBN did not anticipate hitting such firewalls.

Back in 2004 when the CBN under Chukwuma Soludo shocked the industry by demanding N25 billion as minimum capital for all banks, there was no resistance, except for murmurings which quickly fizzled out as the banks swung into action to beef up their capital base.

The requirement led to about 50 banks losing their core identities, but there was little or no faulting of the motive behind the initiative.

However, top on the table now are the mounting contradictions in the figures released by the CBN and bankers ' faulting of its mode of examination as well as its motives.

While Ibru and Akingbola are said to be on the run, the Economic and Financial Crimes Commission (EFCC) has so far arrested 15 bank executives, some of them belonging to the subsidiaries of the troubled banks.

Among the activities expected this week is the outcome of the deadline of seven days given by the EFCC for bank debtors to pay up.

On Sunday, federal Attorney General and Justice Minister, Michael Aondoakaa, threw his weight behind efforts by CBN Governor, Lamido Sanusi, to reposition the banking system.

A statement issued by his Media Assistant, Onov Tyuulugh, said the drive is to ensure confidence in banks, and urged shareholders to consider it a positive step to avert calamity.

 Source:Daily Independent 


Shareholder groups are culpable in banks’ poor reports - analysts

Shareholders have their own share of the blame in the current crisis bedeviling the banking sector, according to analysts who spoke on the sack of five bank executives by the Central Bank of Nigeria (CBN).
The analysts observed that the shareholder groups across the country have failed in their responsibility as a watchdog especially on the activities of top management of banks.
The proliferation of shareholder groups that were hitherto critical of the operations of bank executives invariably helped them to conceal vital information from stakeholders, according to analysts.
The shareholder groups, including their representatives on banks’ audit committees should get their share of the beatings for not speaking out when things were going from bad to worse in the affected banks.
In Nigeria today, there are several shareholder groups that are serving different interests and sectional groups even as some of them have been politicised by company executives who have been using them to get key resolutions endorsed at annual general meetings (AGMs).
Pundits say that the situation became worse after the retail shareholders were stylishly compromised by boards and executives.
It is common knowledge that companies now take their AGMs to remote cities in order to escape the wrath of shareholders who are independent minded and capable of challenging the directors on their activities as board members.
Some of these independent minded people may not be rich enough to fund their trips to such places whereas they buy plane tickets for their cronies amongst the shareholder groups and also accommodate them in choice hotels.
These same set of people are given preferences to speak at AGMs while key resolutions are easily adopted without much deliberations.
A market analyst, Tony Akinsanya, said “elections of shareholders into audit committees have become a do-or-die affair among the shareholder groups because of the perks that come with such positions”.
Another analyst and shareholder, Nona Awoh, said “you cannot have a committee of people who are not knowledgeable and expect things to work better”. He added that the CBN rule on the election of members to the audit committees was being violated by some banks.
According to him, the law specifies that nomination of members to the committee should be submitted to the company secretary within 21 days but this is not being enforced.  
However, Muhktar Muhktar, another shareholder and a member of the audit committee of a quoted firm, said: “The banks hide a lot of things from us. What they do is to prepare three different accounts which they give to the CBN, directors and shareholders and you discovered that the one they give to the CBN and the shareholders do not contain the same facts”.
Muhktar maintained that some shareholders found it difficult to get the facts from the executives even when they genuinely requested for information on their operations.
“There is no way you can dabble into management affairs except you have privileged information. The annual reports they give to us is supposed to be a legal document but they do not show the real facts to members of the audit committee”, he noted.
It would be recalled that the first shareholder group was founded by the late Akintunde Asalu who was reputed for taking on directors of companies on key board matters and other issues on the financial statements of such companies at their AGMs.
Asalu’s group, the Nigerian Shareholders’ Solidarity Association (NSSA), had since broken up into several other associations, with some claiming that they represent different zones and regions across the country.
Indeed, the proliferation of the shareholder groups had prompted the Securities and Exchange Commission (SEC) to issue a code of conduct for all the associations just as they must be registered by the Corporate Affairs Commission (CAC). 




Intercontinental: CBN Figures on United Alliance Debt Correct



THISDAY Special Release

Intercontinental Bank Plc has re-affirmed the figures supplied by the Central Bank of Nigeria (CBN) in respect of the outstanding indebtedness of United Alliance Company of Nigeria Limited to the bank.
Making this known in a statement made available to THISDAY in Lagos yesterday, Intercontinental Bank said a letter to the Chief Executive Officer (CEO) of United Alliance last weekend signed by Rasak Yusuff of Remedial Management Department and Yemi Ogunfeyemi of Credit Risk Administration Department both of Intercontinental Bank stated that the N16.25 billion indebtedness published by CBN last Wednesday was accurate, contrary to the claims in a publication a day later denying the status of the loan facility.
The bank’s letter stated: “For the avoidance of doubt, the stated N16.25 billion published by the CBN was outstanding and duly classified as non-performing as at 31st May, 2009”. 
Intercontinental Bank said it had conveyed this position to the company on July 31st 2009 in a letter titled: “Re: Liquidation of your outstanding indebtedness to Intercontinental Bank Plc”. 
“The Bank (Intercontinental Bank) then added that following the letter, the company paid all the arrears and the loan is now performing. Indeed, the company is now arranging to repay the loan in full shortly. This has reportedly excited the bank which then appealed to other debtors to emulate United Alliance,” the statement said.
On the Rockson Engineering Company's loan, the bank also confirmed that the company had made some payments following the CBN/NDIC joint examination and that both institutions were currently working together to resolve the matter.
CBN and bank debtors have been at cross-fire since last week over the actual figures involved in the debt-web currently generating much tension in the banking industry, even as the five banks recently taken over by the apex bank intensify debt recovery efforts, with significant results.
At Intercontinental Bank, the Acting Group Managing Director, Mr. Joseph Ajewole, told newsmen last weekend that the bank had so far recovered N4.8 billion, adding that many of the debtors had come forward with repayment plans.
He therefore called on those debtors yet to respond to the new wave of change to redeem their credit obligations to the bank to avoid unpleasant consequences.
He assured the bank customers that CBN is solidly behind Intercontinental Bank as it repositions to play a bigger role in the nation’s economic growth.
He also expressed appreciation to the customers for their support and loyalty so far amidst the CBN intervention, adding that the intervention was necessitated to guarantee the safety of depositors’ fund.


EFCC cracks down on corporate tax evaders, shuts airline

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Economic and Financial Crime Commission (EFCC) has in the past week recovered billions of naira and arrested a numbere of top officials of firms operating in the aviation industry for alleged corporate tax evasion. 
Already, some top officials of firms have been arrested and are co-operating with the EFCC on how to effect payments, which a source at the anti-graft agency says runs into billions of naira. 
An airline, Wings Aviation, was shut down by EFCC on Friday and its top officials were also picked up to explain why the firm’s tax returns were not up to date. 
Femi Babafemi, spokesman for the EFCC, confirmed to Business Day the closure of the airline but would not say whether arrests were made. 
“We are in the aviation industry now, after we were through with the hotels, seeking for corporate tax evaders. Many people here pretend not to know that corporate tax evasion is a crime”. 
According to him, “we have recovered billions of naira; unfortunately I do not have the actual figures to give you now. But our aim is to recover the money and prosecute the heads of the firms and agencies and use them to set examples that tax evasion is a crime”. 
BusinessDay gathered that many top brass of the agencies, firms and airlines are now sourcing for funds to pay up, while others are consulting tax experts to explain their tax payment positions. 
It was gathered that the EFCC was already inspecting books of all the agencies in a bid to stave off tax defaults.
Said a source: “They came here and inspected our books at the accounts and audit department. It’s like they know what they were looking for as they were asking for specifics”. Though, they were in the agencies for several days, our source said most of the books were in good order as the agency had nothing to say after their inspection.
Many aviation firms, particularly airlines have over the years formed the habit of not paying their taxes including charges collected on behalf of the Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA) and the Nigerian Civil Aviation Authority (NCAA). 
At a time earlier in the year, the airlines owed FAAN over N5 billion and the NCAA close to N500 million. 
While FAAN contracted Maevis Nigeria Limited to help it collect its debts and charges, NCAA contracted the collection of its debts and charges to IATA. Domestic airlines had even dragged NAMA to court over payment of terminal navigational charges.
Meanwhile, airlines that have not been paying their staff salaries regularly may be forced to close shop, as the Federal Government considers such development inimical to flight safety.
This may have prompted EFCC’s investigations in the aviation industry, in order to ensure safety of lives and property.
“You know, by standard, once an airline is not paying its staff regularly, the staff would no longer be committed to their work, leading to lackadaisical attitude to a crucial issue as safety”, our source said.
It was gathered that as soon as the reports are finalized, the EFCC will swoop on the industry and just about four or five airlines may scale the hurdle.
It would be recalled that the director general of the NCAA at the start of the economic audit of airlines had declared that airlines found not able to guarantee safe operations would be advised to close shop. 
According to the NCAA boss, “the main thrust of this exercise is to ensure that the airlines have enough funds to carry out safe operations and if NCAA is convinced that an airline can no longer carry out safe operations, that airline will close shop. 
“In this meltdown, we want to ensure that safety is not relegated, you must do your maintenance, train your crew and you must pay your bills. This is the economic audit we are talking about; we don’t want a situation where you don’t have enough funds to run a safe operation. If you don’t have this, you can’t be here and this audit has started about a week ago and it is going to be an ongoing exercise.” 
In beaming its searchlight on airlines operating in the country, “we are looking at some issues like default in the payment of salaries, fuel, payment on insurance, a lot of bad debts”. 
Demuren said it is possible to owe a fuel marketer, once the airline is credit worthy, but once the airline stops servicing debts, then there is problem. 
“For instance, if you buy a N200 million worth of fuel everyday, you cannot pay that everyday, you already have a credit line with the marketer. If you are credit worthy, you can owe but if you don’t service your credit, you don’t pay your debts, it shows that you are not credit worthy”. 
However, according to the NCAA boss, insurance, is a no go area as airlines must be up to date with their premium or they would not be allowed to carry passengers. “We have learnt our lessons from what had happened in the recent past.” 
He said another area of concentration would be how much airlines are owing the various agencies such as landing and parking charges, rent and navigational charges to NAMA for those doing international operations, charges to NCAA, the Nigerian Aviation Handling Company (NAHCo) plc and the Skypower Aviation Handling Company Limited (SAHCOL). 
“If any airline is owing in all these categories, it shows something is wrong, you can owe but you must be credit worthy. We are watching these very carefully and the oversight team is already looking at this. Let me say what is the most important, we must ensure that safety is not jeopardized because if safety is jeopardized, the industry is gone”, he said. 
Demuren stated that the concept is about safety and safety cannot be compromised or jeopardized, adding that at the initial stage, what was promised was that safety is number one and the goal has not changed. 
“The goal is zero accident and that is what we want to achieve”. 


Banks and Fraud Incorporated

By Les Leba
I have had reason to comment on the banking culture in this country over the years! The piece, “Banks and Fraud Incorporated” was first published in this column in October 2005, and was indeed preceded in September of that year by another article titled:

“Banks and Money Laundering”. Later in April 2008, the piece “Banking of Public Funds, Corruption and Double Speak” also appeared in this column. More recently, in September 2008, in another piece titled “The Bonanza in Margin Trading”, we drew the conclusion that “it seems CBN’s desire is to protect the banks and not the economy in its policy somersaults in recent months”.

Indeed, it seemed that the banks could do no wrong with Charles Soludo as Governor of Central Bank. Even when Intercontinental Bank was fingered as distressed by International Rating Agencies, and when the IMF reported that several Nigerian banks carried excessive risks with their huge uncollateralised loans, non other than the erudite keeper of our nation’s treasury came out in stout defence of Intercontinental Bank with several adverts in the media.

It is not clear who paid for those adverts, but what is clear is that there had been genuine concern over the years about the unusually close confraternity between the Chief Executive of several Nigerian banks and the then incumbent Governor of the Central Bank, who was expected to regulate and supervise banking operations to ensure stability of the system.

The recent revelation of serious distress in five banks is testimony that CBN’s control and supervision was mainly done on the pages of newspapers and the electronic media.The following is the full text of the article “Banks and Fraud Incorporated” in which we warned of the dangers ahead:

“The subject of this week’s piece will take off from the concluding paragraph in this column last week. In this vein, we reproduce below an excerpt from a report by Senior Correspondent Sanya Adejokun published in the Daily Independent of September 23, 2005 titled “CBN to Sanction Banks over Fraudulent Accounts”

“Central Bank of Nigeria (CBN) has threatened to sanction banks caught submitting different financial statements and accounts for the same trading year after the consolidation exercise.

“CBN’s Deputy Governor, Financial Sector Surveillance, Tunde Lemo, who made this known, also vowed to blacklist external auditors conniving with the banks to prepare doubtful (statements) or accounts.

“Lemo said that at the opening of the 11th Annual Bankers’ Conference organised by the Chartered Institute of Bankers of Nigeria (CIBN).
“He pointed out that the apex bank was aware of the preparations of three different financial accounts by banks for themselves, regulatory authorities and shareholders.

“”The CBN is prepared to curb the practice of keeping different financial accounts by the banks. The regulatory authorities would also ensure that auditors who connive in the preparation of these accounts are not engaged by other banks. In fact, we would ensure that the auditors are blacklisted” Lemo stated”

“The importance of the above report must be very disturbing to all well meaning Nigerians! It is common place in this country to read about the fraudulent indulgences of various grades of bank employees in their official capacities, and the attendant financial losses suffered by their employers. There are also reports of several of such staff who have been successfully prosecuted and jailed for their inability to control their sticky fingers!

“A case of financial impropriety by the bank establishment itself is a different kettle of fish and only a few indiscreet and very careless promoters have been arraigned before the courts and even fewer still have been convicted in the recent past.

“The banks have nonetheless been fingered for a series of financial impropriety ranging from round tripping of foreign exchange, money laundering and misappropriation of depositors funds. In these instances, it may be possible to pin the various misdemeanors to the doors of specific individuals who hold key positions in each bank, but it may not be easy or appropriate to claim that such malpractices formed an integral part of a particular bank’s corporate philosophy. Indeed, the promoters and owners of the banks may claim ignorance and may safely apportion blame to individual staff who had been overwhelmed by the motivation of greed or any other such human weakness!

“The issue of a deliberate presentation of false statements of financial trading accounts is fraud at a higher level; indeed, it is wholesale corporate fraud couched in and supported by a bank’s underlying corporate philosophy!

“Such a trend is more alarming and disturbing because of its negative implication on the financial market which forms the bedrock of the nation’s economy. The banking institution is based on ‘TRUST” which is a synonym for noble qualities, such as integrity, truthfulness, transparency, due diligence, etc, etc.

Trust is a sine qua non for the banking industry as air is to human life. Shareholders are willing to invest in banks and depositors are also willing to place their funds in the hands of strangers and monetary authorities also give banks the licence to create money over and above their depositors and shareholders’ funds because they all trust the banks would take good care of their hare earned funds and will play within tested and defined rules and limits prescribed by the regulatory authorities to ensure the existence of a stable and progressive economic environment.

“In this regard, the banks are expected to publish reports which represent true and accurate records of their operations within a given period for consumption by investors and assurance of its shareholders depositors and the regulatory authorities that they have adhered to due diligence and best practice.

The importance of this requirement is underlined by the need for an external audit firm to inspect the books and confirm the integrity of the adopted accounting practices.

The prevalence of falsehood in the financial and trading statements of banks will have serious destabilising effects on the fabric of any economy ad it would be difficult to trust the banking institutions and shareholders will be unwilling to participate in the establishment of a banking enterprise; depositors will be unwilling to place their money in the hands of strangers and it will be foolhardy for the monetary authorities to give licence to a bunch of rogues to create money.

In other words, there will be no banks! If there are no banks, there can be no savings in a formal sense and consequently, there will be very little investment and by extension, there will be minimal economic growth in the country. It would be catastrophic to expect an economy consisting of tens of millions of people to be driven by the primitive instrument of trade by barter! The fabric of society will degenerate and we will quickly descend to Stone Age commercial practices!

“It is in the light of these horrendous consequences that we should be alarmed by the seemingly innocuous declarations by no less than the CBN Deputy Governor that the banks prepare three different financial statements; for themselves, the regulatory authorities and their shareholders. In essence, this means that the information provided by the banks to enable both existing and potential shareholders and investors to make sensible business decisions are false! The implication of such false information on the stock values of banks and the integrity of the stock market itself can only lead to destabilization of the money market and by extension the larger economy.

“It is even more worrisome that the falsehood being churned out are in turn endorsed as accurate by ‘reputable’ audit firms who are expected to protect the interest of the investing public. What is, however, most disturbing in all the above is the apparent levity of the CBN in arresting the trend. The Ministry of Finance had at some time last year accused the banks of colluding with political office holders to loot the economy through various instruments including the Irrevocable Standing Payment Orders, ISPO, forex round tripping, money laundering, as evidenced by the inflow of dubious money in the bank consolidation exercise and various other financial misdemeanors. However, in all these, the perpetrators have almost always gotten away with a slap on the wrist and a timid warning of go and sin no more or at worst, the threat of fire and brimstone next time around!

“The CBN Deputy Governor’s remarks at the recent 11th Annual Bankers’ Conference appears to fit the old pattern of the regulatory authorities’ reaction to malpractices in the banking sector; a lot of huffing puffing laced with sound and fury but sadly signifying nothing! So long as perpetrators of financial malpractices and indeed of any type of criminal behavior go unpunished, as is currently the case with high profile offenders in this country, the greater will be the motivation to undermine the values of trust and security in our body polity and the closer we will move to the borders of anarchy!”
All articles cited can be found at SAVE THE NAIRA, SAVE NIGERIANS!



Who saw the bank crisis coming?

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 In a much celebrated article entitled: ‘The Agenda-Setting Role of the Mass Media in the Shaping of Public Opinion’,Maxwell McCombs, a professor at the University of Texas, Austin, United States notes: “The power of the news media to set a nation’s agenda, to focus public attention on a few key public issues, is an immense and well-documented influence. Not only do people acquire factual information about public affairs from the news media, readers and viewers also learn how much importance to attach to a topic on the basis of the emphasis placed on it in the news. Newspapers provide a host of cues about the salience of the topics in the daily news – lead story on page one, other front page display, large headlines, etc. Television news also offers numerous cues about salience – the opening story on the newscast, length of time devoted to the story, etc. These cues repeated day after day effectively communicate the importance of each topic. In other words, the news media can set the agenda for the public’s attention to that small group of issues around which public opinion forms.”
The principal outlines of this influence had been sketched as far back as 1922 by Walter Lippmann in his work, ‘Public Opinion’. According to Lippmann, the news media are a primary source of pictures in our heads about the larger world of public affairs, a world that for most citizens is “out of reach, out of sight, out of mind.” 
One can therefore appreciate the critical role of the media as the fourth estate of the realm, a tag that has stuck since Edmund Burke, the 19th century British parliamentarian and political philosopher assigned the fourth position to the media in a realm that comprises the executive, the legislature and the judiciary in that order. What we know about the world is largely based on what the media decide to tell us. More specifically, the result of this mediated view of the world is that the priorities of the media strongly influence the priorities of the public. Elements prominent on the media agenda become prominent in the public mind. If the media fail, the society is doomed. In BusinessDay this is taken seriously.
The agenda of a media house is found in its pattern of coverage of public issues over some period of time, a week, a month, an entire year. Over this period of time, whatever it might be, a few issues are emphasised, some receive light coverage, and many are seldom or never mentioned. It should, however, be noted that the use of the term ‘agenda’ here is purely descriptive. There is no pejorative implication that a media house like BusinessDay ‘has an agenda’ that it relentlessly pursues as a premeditated goal. The media agenda presented to the public results from countless day-to-day decisions by BusinessDay journalists and board of editors about the issues of the moment.
The beginning of this year presented a clear picture of the shape of things to come and BusinessDay seized it and foresaw the sequence of events that culminated in the sack of five chief executive officers of Nigerian banks on Friday, August 14. 
For five days, February 16 to 20, BusinessDay ran a series on the Nigerian banking sector. It was a time that there was anxiety and excitement over the reappointment or otherwise of the former governor of the Central Bank of Nigeria, Chukwuma Soludo. The professor of economics was appointed in 2004 and his coming led to consolidation in the Nigerian banking industry, an exercise that saw banks move their capital base from a paltry N2 billion to a minimum of N25 billion. 
Initially, the move was criticised, but when at the end of 18 months period 25 banks scaled the huddle, consolidation was hailed as the best thing that had happened to the Nigerian banking industry.
However, for keen observers and for BusinessDay board of editors, there were challenges and miscues that needed to be addressed, questions that needed urgent answers and measures that needed to be taken to steer the Nigerian banking sector away from a path of destruction.
It has become public knowledge since the landmark decision of the sack of the five CEOs on August 14 that the huge debts totaling more than one trillion naira that crippled the five banks had to do with loans related to the capital market and the oil and gas sector.
The present governor of the CBN, Sanusi Lamido Sanusi, while announcing the decision to sack the five managing directors, attributed the crisis in the banking sector to a failure of regulation over time. Long before then, BusinessDay had recognised the nexus between the margin loan crisis and weak regulation. 
The paper’s lead story on Tuesday, February 17, 2009, was entitled: ‘How regulatory failure created margin loan crisis’. BusinessDay wrote: “A failure of regulatory oversight by the monetary authorities, charged with the responsibility to monitor and supervise how banks lend and disburse loans in the financial system, has been identified for the massive margin loan crisis hanging over the banking industry.
“The banking regulator, the Central Bank of Nigeria (CBN) is believed to have taken its eye off the ball while a number of banks moved recklessly into the capital market to perpetrate unwholesome practices designed and calculated to shore up the value of their shares in the capital market.”
We further went to report that the CBN only moved to play its oversight role after the crisis had deepened, and even when it did, its measures were targeted at general monetary concerns.
The next day, BusinessDay’s lead story was ‘Outrage as CBN lends to some banks at 11 percent’. The story reads: “The Central Bank’s expanded discount window through which it acts as lender of the last resort to the nation’s banks was opened a bit wider some months ago but access was initially fixed at an outrageously low eleven percent per annum.
“Almost a trillion naira was extended to the banks since September when access through the window was eased but some bankers thought it was unwise and indeed curious that the Central Bank will extend credit to banks at eleven percent interest rate at a time when deposits could command as much as 16 or even 17 percent.
“Expectedly a deluge of requests came in from the banks, some simply because they could not just sit there watching their competitors profit from a seemingly unusual handout from the lender of last resort.”
The story quoted a banker who said: “All over the world, when you reach out to the lender of last resort, what you get is at a premium. But here banks were to all intents and purposes being rewarded instead of being punished.”
On page 53 of the same edition, we ran a story entitled, ‘With blurred supervision, banks are back to cooking the books’. In the story, BusinessDay writes, “Declarations of bogus profits and failure to disclose toxic assets have crept into Nigeria’s banking system. And analysts, worried by the trend, say banking in the country has gone back to the old days when banks kept more than one statement of account for different purposes.
“But the understanding of many was that the Central Bank of Nigeria would be up to the task of supervising and discouraging banks from cutting corners. Information reaching BusinessDay indicates that the apex bank may have been looking the other way while banks cheated their shareholders of billions of naira.”
On Thursday, February 19, 2009, BusinessDay came out with a lead headline ‘CBN’s lax supervision set stage for irregular financial reporting’. According to the report, CBN’s laxity in effectively monitoring financial reporting by banks had put it at daggers drawn with Nigerian Accounting Standards Board (NASB) charged with the task of ensuring compliance with set standards of financial reporting in Nigeria which is in line with international accounting standards.
For instance, according to the story, analysts expressed surprise over lack of details by the banks which supply only basic information as profits, earnings, shareholders’ funds at the exclusion of important details such as unsecured consumer credits, trade finance exposure, equity markets risk, corporate lending risk, sovereign fixed income as well as significant potential for foreign currency risk as point of large scale asset and liability transactions with international counterparts.
And on Friday, February 20, 2009, the last day of the series, which was three months ahead of the end of the tenure of Soludo as CBN governor, BusinessDay predicted that he would not be reappointed and took the public through reasons he was unlikely to get a second term in office.
Quoting an advisory by Eurasia, the leading political risk research and consulting firm based in New York, the United States, BusinessDay catalogued a number of CBN’s policy somersaults, condescending statements talking up the economy and flip-flops which together with other issues have helped to dent Soludo’s chances of re-appointment. 
The report reads: “Soludo’s current five-year tenure ends in May. While Soludo gained widespread international respect for his leadership in pushing banking sector reforms and a massive consolidation of the Nigerian banking system under the Obasanjo administration, his recent miscues on the direction of inflation and currency policy have left his much vaunted credibility damaged. Whoever replaces Soludo from Yar’Adua’s inner circle is likely to be more strongly market interventionist than Soludo, who had until recently been fairly neo-liberal in his policies.”  
Since Sanusi sacked Erastus Akingbola of Intercontinental Bank, Cecilia Ibru of Oceanic Bank, Okey Nwosu of FinBank, Barth Ebong of Union Bank and Sebastian Adigwe of Afribank, it has become public knowledge that they were the main beneficiaries of the controversial expanded discount window, had cooked books to hoodwink the public and their shareholders and exposure to margin loans. BusinessDay foresaw the present crisis and faithfully discharged its responsibility to the public, but nobody, not even the authorities paid attention.


Zain announces airtime bonus, introduces new recharge cards

In a bid to further delight its customers,  Zain Nigeria has commenced S new airtime bonus for its customers throughout the country.
The new bonus credit will be available to customers instantly when they recharge their phones with the designated recharge cards in line with the terms of the new offer. Also, Zain has introduced new recharge cards denominations, giving its customers a greater range of choice and a bigger opportunity to enjoy the newly launched tariff plan, Zain Joli.

The new recharge cards denominations which comes with new designs include N150, N350, N500, N1, 000, N2, 500 and N5, 000 and will be available soon in Zain sales outlets, dealers and sub_dealers locations, designated shops, other channels and with street vendors throughout the country.
According to Zain Nigeria Marketing Director, Mostafa Younes, from  August 18, 2009, customers will enjoy instant airtime bonus when they recharge with any of the old or new higher denomination recharge cards  vouchers.
Younes said customers will get higher bonus when they recharge with higher value recharge cards, starting from the N1, 000 to the N5, 000 vouchers, before they could enjoy the bonus.

“Customers will be rewarded with bonus airtime instantly as soon as they recharge their phones. In addition to the bonus airtime, customers will get between seven to 15 days bonus validity period depending on the value of the recharges. Customers can get between N50 to N750 per recharge depending on the value of the recharge voucher used. Recharge with N1, 000 will give the customer a benefit of N50 bonus airtime, while recharge with N2, 500 and N5, 000 will attract N250 and N750 bonus credit respectively, the Marketing Director said.

The new recharge denominations will be available in physical vouchers form and as electronic Pins (e_Pins) and can be used for airtime top_up by both pre_paid and post paid customers.
The use of the old N1, 000 recharge cards will also attract instant bonus airtime according to Zain.
Customers who recharge with e-Pins will also enjoy similar free credit bonus as applicable to the physical cards.

thank you to our customers who have remained faithful to us over the years, said Younes.
Younes explained that despite the new introduction of the new recharge denomination, customers who still have the old vouchers in their possession will be able to use them to recharge their phones provided the expiration date has not been exceeded.
Customers can accumulate bonus airtime up to N200, 000 only. The bonus credit is not transferable and it is not applicable to post_paid lines, payphone and customers on business plans.




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