Saturday , 21 April 2018
Latest
Home » Business

Business

Bank mistakenly transfers $34bn to customer

Germany’s biggest lender Deutsche Bank on Friday admitted to a massive erroneous transfer of €28bn ($34 billion) in a routine operation, more than the entire bank is worth.

The unprecedented mistake happened on March 16 when Deutsche Bank carried out a transfer to an account at Deutsche Boerse’s Eurex clearing house, a spokesman told AFP.

The operation was meant to involve a far smaller sum, which the bank has not revealed, and highlights IT and control issues at the banking giant.

Accounting errors happen most days, but the sum involved in this case is highly unusual and even exceeds Deutsche’s market capitalisation of 24 billion euros.

The incident, which came shortly before John Cryan was ousted as chief executive, was quickly fixed and no harm was done, the institution said.

But it raises questions about the risk management and control processes within the bank, which Cryan was meant to have greatly improved since his arrival in 2016.

Given sole command of the lender in 2016 after the departure of co-CEO Juergen Fitschen, Cryan’s task was to restructure Deutsche and clean up the toxic legacy of its pre-financial crisis bid to compete with global investment banking giants.

But Deutsche has yet to return to profitability, while the share price has slumped more than 50 percent in the past two years — around 30 percent this year alone.

In a sign of the bank’s ongoing internal tussles, Deutsche on Wednesday announced the departure of its IT and infrastructure chief Kim Hammonds, who had reportedly called the bank the “most dysfunctional company” that she had worked for.

Trump berates OPEC for ‘artificially’ high oil prices … Barkindo responds

US President Donald Trump has accused the Organisation of Petroleum Exporting Countries (OPEC) of “keeping oil prices artificially very high.

In tweet, Trump said the cartel’s pricing cycle “will not be accepted” as there is no scarcity of oil supply to warrant such “high prices.”

But OPEC secretary general, Mohammad Barkindo, in a swift response, said the US oil and gas industry benefits from the cartel’s efforts to restore stability in the market.

He was speaking from Jeddah, Saudi Arabia.

“We in OPEC pride ourselves as friends of the United States who have vested interest in their growth, development and prosperity,” he said,  adding that OPEC, non-OPEC deal “has not only arrested the decline but rescued the oil industry from imminent collapse and is now on course to restore stability on a sustainable basis in the interest of producers, consumers and the global economy”.

Oil prices recorded slight increase on Friday ahead of a meeting by members of the joint OPEC and non-OPEC ministerial monitoring committee (JMMC) meeting, same day.

As at Thursday, OPEC daily basket price stood at $70.96 a barrel, compared with $69.39 on Wednesday, according to calculations by the secretariat.

But West Texas Intermediate (WTI) crude, rose to $68.53 a barrel on Friday, from $68.29 a barrel on the New York Mercantile Exchange on Thursday.

Similarly, Brent crude, the global benchmark inched above the $73 mark on Friday, the highest since 2014.

Expectations are high that the OPEC and non-OPEC JMMC gathering will announce a specific timeline for further extension of its production cap agreement.

CNBC reports that Trump’s agitation may be fueled by news that major oil producers may be targeting much higher oil prices.

Saudi Arabia, a key OPEC member, has conveyed desire to see crude prices at around $80 or even $100 a barrel.

This is partly due to the kingdom’s planned initial public offering of Saudi Aramco, its state oil company.

Speaking in an interview withBloomberg TV, Barkindo said “geopolitical tensions in the Middle East (Iran) have brought back a premium to crude oil prices”.

According to him, “it wouldn’t be in the interest of producers or consumers to see a price shock” if Iran leaves the cartel based on US “re-imposed” sanctions.

Falana demands explanations on fuel subsidy increase from N261bn to N1.3trn

Human Rights Activist, Femi Falana SAN,  on Tuesday filed a Freedom of Information request to the Ministry of Petroleum Resources demanding details of how the Nigerian government’s payment of N261.4 billion per annum in fuel subsidy skyrocketed to N1.4 trillion.

In the FOI request addressed to Ibe Kachikwu, the Minister of State for Petroleum, Mr. Falana said the ministry failed to account for millions of litres of imported fuel between December 2017 and March this year.

In December 2017, according to Mr Falana, the management of the Nigerian National Petroleum Corporation (NNPC) said the nation’s consumption rate of fuel was 28 million litres per day and that subsidy cost was N726 million per day (N261.4 billion per annum).

But last month, Maikanti Baru, the NNPC Group Managing Director, said the corporation paid N774 million daily fuel subsidy due to a heightened petroleum consumption of 50 million litres per day.

On April 6, Mr Kachikwu said the annual expenditure on fuel subsidy has risen to over N1.4 trillion.

“We are not unaware that the increasing consumption rate has been blamed on the smuggling of imported fuel from Nigeria to neighbouring countries by some economic saboteurs,” Mr Falana, a Senior Advocate of Nigeria, stated in his FOI request.

“Assuming without conceding that the story of smuggling is true the total volume of fuel consumed by Benin, Togo, Cameroon, Niger, Chad and Ghana is said to be less than 250,000 litres per day. You will agree with me that this does not explain the difference of 32 million litres per day between the consumption rate of imported fuel in December 2017 and March 2018.”

Mr Falana accused the minister of failing to disclose the amount realised from the sale of the 60 million litres at N145 per litre as well as the sale of the 445,000 barrels of crude oil allocated to the NNPC daily by the federal government.

“Honourable Minister, the convenient defense of smuggling as cheap justification for a gap of 32 million litres a day (at N145 per litre is N4.6 billion daily) is untenable given the billions of Naira continually expended on Project Aquila Software by the Petroleum Equalization Fund (PEF), a parastatal under your watch in the Petroleum Ministry, to track every litre of petroleum product evacuated from the Depots and sold at retail stations in the country.

“Since the Project Aquila Software has the capability to identify theowners and locations of all trucks loading petroleum products in Nigeria, why has your office and NNPC continued to blame smuggling for the drain of N4.6 billion daily on petroleum products? How many of the truck owners involved in the alleged smuggling have been arrested and arraigned in court since Aquila has the database of all Truck Owners in the country?”

Mr Falana requested for copies of the Bill of Laden and DPR certified Cargo Discharged Certificates of the imported subsidised Petroleum Products into the Country from December 2017 to March 2018 and the Offshore Processing Agreements pertaining to the Sale of the 445,000 barrels of crude oil per day plus any additional crude Barrels approved for domestic consumption from December 2017 to March 2018.

He also requested for information on the volumes of domestic refined products by the nation’s local refineries against gross expenditure on refinery Turn Around Maintenance(TAM)/ Expended Budget in 2017, gross amount of Forex differential or Forex subsidy (gap Between CBN rate and special rate approved for fuel importation) from December 2017-March 2018, and the amount expended by PEF on Project Aquila from inception aimed at tracking petroleum trucks nationwide to prevent smuggling of petroleum products.

Mary Uduk named Ag SEC DG as Adeosun implements shake up

The Minister of Finance, Mrs. Kemi Adeosun, on Friday announced the reassignment of portfolios in the Securities and Exchange Commission (SEC).

According to a statement by her spokesman,  Oluyinka Akintunde, Ms. Mary Uduk will assume the position of Acting Director-General of the Commission.

Uduk’s appointment is governed by the provisions of the Investments and Securities Act (ISA), 2007 and the conditions of service applicable to the Director-General of the Commission, the statement said.

 The Minister, in a letter dated 13thApril, 2018, said Uduk’s appointment had become necessary to ensure effective regulation of the Capital Market. Her appointment will, subject to satisfactory performance, subsist until further notice.

The Minister also announced the redeployment of the former acting Director-General of the Commission, Dr. Abdul Zubair, to External Relations Department.

Others affected by the reassignment are: Reginald C. Karawusa – Acting Executive Commissioner, Legal and Enforcement; Isiyaku Tilde – Acting Executive Commissioner, Operations; Henry Roland Adekunle – Acting Executive Commissioner, Corporate Services.

The new Acting Director-General joined the Commission in 1986 as an assistant financial analyst. Her career as a regulator has spanned many functions and departments in the Commission, from corporate finance, administration, to providing structural, policy and due diligence for capital market transactions.

She has also been responsible for managing several landmark capital market projects, including the registration of Capital Market Operators, articulating rules for bonds and equities; Mergers, acquisitions and Takeovers, and managing the banking and insurance industry consolidations between 2005-2007.

 Uduk served as the pioneer Head of the Operations Division in the Lagos Zonal Office, and has headed the following Departments in the Commission: Internal Control, Investment Management, Financial Standards and Corporate Governance and Securities, and Investment Services Department, among others.

 Meanwhile, the Federal Ministry of Finance has requested for a formal explanation from the SEC of the recent communications between the Commission and the Nigerian Stock Exchange (NSE), which adversely impacted market confidence.

Inflation rate sinks to 11 month low at 13.34%

Data made available by the National Bureau of Statistics (NBS) shows that inflation has again slowed; this time by 0.99 percent points which is the biggest drop in 11 months.

In the Consumer Price Index and Inflation Report for March 2018, the NBS said inflation rate has dropped in 13.34 percent from 14.33 percent in February.

This is the 14th consecutive month of disinflation since February 2017 when inflation first slowed.

The highest increases were recorded in fruits and vegetables, fish, coffee, eggs and cereals.

“On a month-on-month basis, the headline index increased by 0.84 percent in March 2018, up by 0.05 percent points from the rate recorded in February,” the report read.

“The composite food index rose by 16.08 percent (year on year) in March 2018, down from the rate recorded in February (17.59 percent).

“The urban inflation rate eased by 13.75 percent (year-on-year) in March 2018 from 14.76 percent recorded in February, while the rural inflation rate also eased by 12.99 percent in March 2018 from 13.96 percent in February.

“In March 2018, all items inflation on a year on year basis was highest in Bauchi (16.38%), Kebbi (16.36%) and Nasarawa (16.33%), while Kwara (10.30%), Kogi (10.87%) and Delta (11.17%) recorded the slowest rise in headline year on year inflation.

“In March 2018, food inflation on a year on year basis was highest in Nasarawa (20.83%), Bayelsa (19.03%)and Yobe (18.93%), while Kogi (11.99%), Bauchi (12.60%) and Benue (13.07%) recorded the slowest rise in food inflation.”

Inflation had doubled in January 2017 after the economy slipped into a recession in 2016. With consistent disinflation, the economy exited recession mid-2017.

Top businessman arrested for alleged N11.5bn fraud

 

The Economic and Financial Crimes Commission, Lagos Zonal office, has arrested one Michael Obasuyi, Managing Director, Platinum Multi-purpose Cooperative Society Limited, for alleged offences bordering on conspiracy, cybercrime and money laundering to the tune of N 11, 498,944,038.29.

Mr Obasuyi, who is also the Managing Director of Smartmicro Systems Limited, had written a petition in March 2018 to the commission against a company, a mobile and electronic payment provider.

However, in what may be described as a dramatic twist, the company had also written a counter-petition against Smartmicro and Mr Obasuyi, thereby leading the commission to begin investigations into the activities of Mr Obasuyi.

Smartmicro was alleged to have approached the company in 2012 for the deployment of bulk purchase solution called “Corporatepay” to facilitate payment of salaries of Delta State employees in microfinance banks.

It was also alleged that the company configured an additional outbound fund transfer solution called “Fundgate” in 2017, which required Smartmicro to maintain a pre-funded settlement account with a first generation bank for settlement of account it had initiated.

However, the company further alleged that the bank, sometime in March 2018, revealed that the settlement account was in debit of N11, 498,944,038.29.

Mr Obasuyi, in his statement to the commission, confessed to have committed the crime, stating that he created fraudulent and imaginary monies through the aid of Fundgate financial application from the company.

The commission, in the course of investigation, has recovered a paper version of the programme called MicroSwitchServer1, which he allegedly used to create and post the imaginary monies.

He also admitted to have diverted to his personal use N7.5 billion (N7,519,381,202) out of the total sum of N11.5 billion (N11,498,944,038.29.)

Heritage Bank MD, Sekibo, others to face trial over N1bn fraud

The Economic and Financial Crimes Commission has charged the Managing Director of Heritage Bank Plc, Ifiesimama Sekibo, and five others before the Lagos State High Court in Ikeja for an alleged fraud of N1bn.

Sekibo was charged along with Dimire Dike, Wumi Adeniyi, Kolapo Daisi, Funmilayo Taiwo and Akeem Durotoye.

The charges border, among others, on conspiracy, stealing, obtaining money under false pretences and forgery.

The EFCC alleged that the defendants obtained the sum of N1bn from Heritage Bank Plc “by falsely representing the sum as proceeds of Vlamings Professional Limited’s investment in Heritage Bank Plc.”

It accused them of dishonestly converting the N1bn, being Heritage Bank’s property, to their own.

They were accused of forging a document titled ‘RE: Expression of Interest in Agric Fund Management Scheme.”

According to the anti-graft agency, the defendants allegedly forged the document dated April 2, 2015, “purporting it to be a loan scheme executed in favour of Vlamings Professionals Limited.”

The EFCC claimed that the defendants sent the document to it (EFCC), hoping it would be mistook to be genuine.

They also allegedly forged another document titled, “Agric Management Scheme” purporting that it was approved by Heritage Bank Plc.

In the 10th count bordering on accessory to an act or offence contrary to sections 8(b) and 1(3) of the Advance Fee Fraud and other related offences Act, 2006, the EFCC accused Dike, Adeniyi and Akeem of “procuring false Heritage Bank agric fund scheme documents as a means of disguising the evidence against the said bank’s staff to enable them to escape prosecution.”

Counsel for the EFCC, Ekene Iheanacho, said the defendants committed the offence between February 2015 and February 2017.

According to him, among others, they allegedly acted contrary to sections 285(8), 363(3)(h) and 364 of the Criminal Law of Lagos State 2011.

The court has yet to fix a date for the arraignment of the defendants.

Foreign reserves add $1bn in less than a month

Nigeria’s foreign exchange reserves have added $1 billion from the $46.2 billion recorded in March, according to figures made available by the Central Bank of Nigeria (CBN).

Speaking at the opening ceremony of the 25th seminar for business editors and financial correspondents in Uyo on Monday, Edward Adamu, newly appointed deputy governor, corporate services, said the apex bank hopes to meet the $50 billion target before the end of the year.

Adamu represented Godwin Emefiele, CBN governor, at the event.

In March, Isaac Okorafor, acting director, CBN corporate communications, partly attributed the growth to the bank’s decision to restrict foreign exchange for the importation of 41 items.

Other factors which, according to him, contributed to the growth are inflow from oil and non-oil exports, and huge inflows through the investors and exporters window of the foreign exchange market.

“The bank’s interventions in the foreign exchange window had also helped to moderate the pressure on the forex reserves by sustaining liquidity in the market and boosting production and trade,” he said.

US, UK envoys visit Otedola, hold talks on economy

United States Ambassador to Nigeria Stuart Symington and his UK counterpart Ambassador Paul Arkwright have paid separate visits to the Chairman of Forte Oil Plc Mr. Femi Otedola, during which the parties held discussions on the Nigerian economy and the role of businesses in the country in exploring partnerships with international businesses to create more job opportunities for Nigerian youths.

At the breakfast meeting with Otedola at his Ikoyi, Lagos residence, the U.S. ambassador commended the Nigerian energy magnate for his continuing investments in the country and for being a role model for other entrepreneurs.

The American envoy drew Otedola’s attention to Nigeria’s growing population, noting that the private sector has a critical role to play in creating opportunities for youths to be gainfully employed and in nation building. This, Symington said would help to address poverty in the country and rising insecurity due to the high rate of unemployment. He encouraged Otedola to explore partnerships with U.S. companies interested in investing in solar power projects and exports.

Responding, Otedola, who in addition to being the majority shareholder in Forte Oil, is also an investor in the Geregu power plant in Ajaokuta, Kogi State and is expanding into solar power, thanked the U.S. ambassador for the visit and expressed his commitment to working with international businesses to expand his footprint in the country.

“Nigerians are very entrepreneurial and would latch on to any opportunity to start and grow a business. The problem, however, has been access to cheap and long-term capital which remains an impediment. That is where we would like the U.S. to come in by encouraging private equity firms, venture capitalists and using U.S. export guarantees, among others, to support Nigerian businesses to become competitive and make good returns on their investments,” he said.

He reminded Symington that despite the political and economic risks in the country, Nigeria remains one of the few countries in the world where the returns on investment are still high due to the infrastructure and technological gaps, making foreign investment a worthwhile venture.

Also, Otedola hosted the British ambassador Arkwright to dinner at his residence recently, where talks centred on the economy. Like his U.S. counterpart, Arkwright congratulated Otedola for his investment drive in the country, saying businesses such as Forte Oil are beacons for others to follow. He assured Otedola that given the strong historic ties between Britain and Nigeria, the country remained an investment magnet for UK companies seeking to do business on the African continent. He charged Otedola to collaborate with other Nigerian entrepreneurs and businesses to encourage the Federal Government on creating a conducive environment for foreign and local businesses to thrive.

Responding, Otedola assured the British envoy that the Nigeria government has a policy in place and a council co-led by the private sector on the ease of doing business.

“As you know, Nigeria recently improved its ranking on the World Bank’s ease of doing business index by moving up 24 places. But the federal government is not resting on its oars because it wants to improve on the current ranking.

“We in the private sector continue to meet with government ministries and agencies and collaborate with them in areas where more improvement is needed so that we can attract more foreign direct investment into the country. And I am sure that with the support of the UK government and businesses in some of these areas, we will continue to see improvements in all sectors of the economy,” Otedola said

Why Nigeria didn’t sign Economic Partnership Agreement –Buhari

President Muhammadu Buhari has stated the reasons why Nigeria refused to sign the Economic Partnership Agreement among ECOWAS countries

According to a statement by his Special Adviser on Media and Publicity, Mr. Femi Adesina, Buhari spoke while receiving Letters of Credence from the Head of Delegation of the European Union to Nigeria, Ketil Karlsen, at the Presidential Villa, Abuja.

The President told his guest that Nigeria had been reluctant to sign the Economic Partnership Agreement among ECOWAS countries because of the need to protect the economy, especially the industries and small businesses that currently provide jobs for majority of Nigerians.

The President noted that the signing of the agreement will expose the industries and small businesses to external pressures and competitions, which could lead to closure and job losses.

“We are not enthusiastic about signing the EPA because of our largely youthful population. We are still struggling to provide jobs for them, and we want our youths to be kept busy.

“Presently, our industries cannot compete with the more efficient and highly technology-driven industries in Europe. We have to protect our industries and our youths,’’ he said.

Buhari, who commended the EU for its support for the rehabilitation of the North East, noted that the Nigerian economy was already being repositioned to attract more investments that will create jobs.

In his remarks, Karlsen said the EU would continue to support Buhari’s administration in the key priorities it listed — security, economy and the fight against corruption.

He said the EPA was designed to accommodate and protect some economies that would find it difficult to compete.

“We are hopeful that there will be a signature on the agreement,’’ Karlsen added.

Buhari also received Letters of Credence from the Ambassador of Italy, Dr. Stefano Pontesilli; and the Ambassador of Spain, Mr. Marcelino Ansorena.