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MTN To Refund $8.13Bn As CBN Uncovers Serial Fraud In Four Banks

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MTN To Refund $8.13Bn As CBN Uncovers Serial Fraud In Four Banks

The Central Bank of Nigeria (CBN) has imposed a N5.87 billion fine on Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank over alleged illegal remittance of foreign exchange to offshore investors of MTN Nigeria Communications Limited.

This is even as the  CBN has directed MTN to refund 8.13 billion dollars which was illegally repatriated by the company with the aid of the four Nigerian banks.

In a statement issued by the CBN on Wednesday, the nation’s apex bank accused the commercial banks of carrying out the transaction without regular ‘Certificates of Capital Importation (CCIs)’ which is a compulsory pre-requisite for such transactions.

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The CBN Acting Director, Corporate Communications, Department, Mr Isaac Okorafor who issued the statement described the action of the banks and MTN as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria,”.

Giving a breakdown of the imposed fines, Okorafor said Standard Chartered Bank would pay a fine of N2.47 billion, Stanbic IBTC, N1.88 billion, Citibank Nigeria, N1.26 billion and Diamond bank, N250 million.

Okorafor while explaining the banks’ offenses, disclosed that investigations by the CBN revealed that 3.45 billion dollars was repatriated by Standard Chartered Bank on the basis of illegally issued CCIs.

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Similarly, he said the sums of 2.63 billion dollars, 1.766 billion dollars and 348 million dollars were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively during the period 2007 and 2015.

He said the CBN had directed the affected banks to pay the fines to the apex bank immediately.

Okorafor said that “the CBN investigation further revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the company.

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He advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations of Nigeria in their foreign exchange transactions.

He warned that failure by the management of banks and companies to abide by the existing guidelines, they would be appropriately sanctioned adding that the  sanctions may include denial of access to the Nigerian foreign exchange market.

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Business News

Boeing Shares Continue To Slide As Countries Ground 737 MAX Planes

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Boeing Testing Software Changes To 737 MAX Planes

Boeing shares have continued to slide on Tuesday as a growing list of countries move to ground the aircraft manufacturer’s 737 MAX model jets after the crash of an Ethiopian Airlines flight on Sunday killing a hundred fifty-seven persons.

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Boeing’s stock price has fallen nearly twelve percent since the accident, erasing roughly twenty-eight billion dollars in value amid concerns the accident could have links to last October’s crash of a 737 MAX 8 operated by Indonesia’s Lion Air. A hundred eighty-nine persons died in that one.

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Although experts warn that it’s too early to know what caused the Ethiopian Airlines crash, both crashes occurred shortly after takeoff. Experts say, that suggests a possible connection.

Bloomberg reports the Boeing 737 is the best selling aircraft in history.  The MAX is its newest version, with more fuel-efficient engines.  It is also generates almost one-third of the airline maker’s operating profit.

READ:  Nigeria Has Saved $21Bn Since Food Importation Cut - CBN Governor

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Business News

SA Banks Stop Supply Of US Dollars To Zimbabwe

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SA Banks Stop Supply Of US Dollar To Zimbabwe

South African banks have stopped supplying Zimbabwe with U.S Dollar notes saying they want to avoid risk. They cite Zimbabwe`s loss of a hundred correspondent banking relationships in the past few years because of the country`s high risk rating.

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South African banks have been the major sources of U.S dollars for Zimbabwe since 2009.

Zimbabwe Reserve Bank Director, William Wanimanzi says the development is a result of the country`s failure to follow proper dollarization procedures, signs of which he said are now catching up with the country`s fragile economy. He said the country is not officially dollarized because it does not have an agreement with the United States government to use its currency. He says this will make it difficult to take in cash into the economy.

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African News

Zimbabwe Central Bank Abandons Quasi Dollar

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Zimbabwe Central Bank Abandons Quasi Dollar

Zimbabwe Central Bank has abandoned the quasi dollar it introduced in 2016.  The peg of one Zimbabwe dollar to one US dollar has not worked as the black market rate has been in the range of three and a half to four Zimbabwe dollars to one U.S. dollar.

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Economists say this move could lead to jitters in countries that hold the peg, including Saudi Arabia and Hong Kong.

Zimbabwe has long been dealing with currency instability that in 2009, it introduced the US dollar, euro, and the South African rand as legal tenders it thought would stem the wild round of hyper-inflation.

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