The Nation Newspaper

Tag: Directors

  • Bank directors with bad loans to go

    Bank directors with bad loans to go

    Bank directors with non-performing loans (NPLs) are to quit or be sacked, according to a new Code of Corporate Governance approved by the Central Bank of Nigeria (CBN).

    Director, Bank Examination Department at the Nigeria Deposit Insurance Corporation (NDIC), Adedapo Adeleke, said the new code was instituted to address the rising cases of insider bad loans, which not only represent a conflict of interest, but are against the prudential guidelines for the industry.

    He described corporate governance as an essential pillar in financial system stability.

    Banks’ assets have depreciated in the last three years, with provisions for NPLs hitting N856.9 billion, due to the drop in crude oil prices. A large part of these bad loans is owed by bank directors and are in most cases unsecured.

    Besides, the economic recession showed that the financial industry still harbours weaknesses in governance, as seen in insider non-performing loans, unreported losses, huge exit packages for directors, over-domineering executive management, contravention of regulatory/prudential guidelines and lending limits, poorly appraised credits and weakening of shareholders’ funds, among others.

    Adeleke, who spoke at the weekend in Kano during a media workshop organised by NDIC for finance reporters, said the Corporate Governance Code for Bank Directors is signed by all bank directors at the point of their appointment, and has a section that empowers the banks’ boards to remove any director with insider non-performing loans. That section says: “If you are having non-performing loans, you will be removed. It is already being enforced except that the regulators are not being dramatic in publishing the names of affected directors,” Adeleke said.

    Speaking on the theme: Curtailing the Growth of Non-Performing Loans in Banks: The Role of Regulators and Supervisors, he  said that delay or non-payment of workers’ salaries by government and private companies is  worsening the level of non-performing loans in the industry. He said the rate of non-performing loans is in excess of 20 per cent as against the five per cent regulatory threshold.

    The NDIC director said when salaries are delayed, workers who have borrowed from banks, especially through consumer loans, always find it difficult to pay back. “If the economy is improving, and government can help to fulfill its responsibilities, including prompt payment of salaries, the level of non-performing loans in the industry will drop,” he said.

    “If people working in companies that are troubled borrowed from banks, it is important that the loans be provided for when their employers can no longer pay salaries,” he said.

    He however, expressed confidence that the current rise in crude oil prices will impact positively on the banking industry and businesses and help reduce the rising cases of bad loans in the industry.

    Adeleke said the establishment of the Asset Management Corporation of Nigeria II  (AMCON II) to buy up non-performing loans as being suggested can only be private sector led. “If there is going to be AMCON II at all, it is going to be private sector-led,” he said.

    He said the CBN Prudential Guidelines allows banks to review  their  credit  portfolio  continuously  (at  least once  in a  quarter)  with  a  view  to recognising  any deterioration in  credit quality. Such reviews, he added, should systematically and realistically classify banks’ credit exposures based on the perceived risks of default.

  • NAICOM moves directors, others

    NAICOM moves directors, others

    National Insurance Commission (NAICOM), has redeployed 30 of its staff, amongst them, Directors, Assistant Directors and others across the various departments.

    NAICOM’s spokesperson, Rasaaq Salami, who made this known in a statement, yesterady, said the transfers take immediate effect.

    One of the major changes is the redeployment of the Commission’s Director for Inspectorate, Barineka Thompson, who now becomes the new Director for Supervision, while the Director for Supervision, Olufemi Oba, is now the Director for Finance and Admin.

    The Director, Authorisation and Policy, Pius Agboola is now Director, Inspectorate, while the Head, Corporate Governance, Leonard Akah, is now Acting Director, Authorisation and Policy.

    The Head, Enforcement and Compliance, Ahmad Adamu, is now Head, Complaint Bureau; while Head, Inspectorate Lagos, Monday Faruna Adaji, is to Head, Internal Audit; and Head, Internal Audit, Kamal Barde, moves to Ag. Director, Supervision.

    According to Salami, a total of 23 others in the rank of Assistant Directors and below have also been redeployed.

  • EFCC charges firms, directors for duping bank of N7.8b

    EFCC charges firms, directors for duping bank of N7.8b

    The Economic and Financial Crimes Commission (EFCC) has accused two oil service companies and their directors of defrauding a bank  of over N7 billion.

    It filed charges against the directors, Ogbor Kehinde Eliot, Godwin Okoronkwo, and the oil firms, Danium Energy Services Ltd and Petrosol Energy Ltd, at the Federal High Court in Lagos.

    The commission said they allegedly defrauded the bank of N7,802,649,000.

    The agency said they presented forged documents to the bank after claiming to have been awarded multi-billion naira contracts by Total Nigeria Plc.

    The defendants claimed they got contracts to supply thousands of metric tonnes of diesel and needed funding.

    EFCC, in the charge signed by prosecuting counsel Rotimi Oyedepo, said the four, on or about October 5, last year, in Lagos, with intent to defraud, conspired to induce the bank to deliver N1,573,146,000 to Danium Energy Services.

    The commission said it was under the false pretense that Total Nigeria Plc contracted Danium Energy Services to supply 10,000 metric tonnes of Automotive Gas Oil (AGO) for N1,990,440,000.00 .

    EFCC said the accused persons, on November 15, last year, with intent to defraud, induced the bank to deliver N1,573,146,000 to Danium Energy Services.

    The commission said Eliot and Danium Energy Services on or about January 30 in Lagos conspired to induce the bank  to deliver N3,339,225,000 to Danium Energy Services.

    EFCC said they claimed that Total Nigeria Plc, through a letter dated January 30, contracted Danium Energy Services to supply 15,000 metric tonnes of Automotive Gas Oil (AGO) for N4,103,100,000.

    Eliot and Danium Energy Services were alleged to have collected the N3,339,225,000 from the bank on February 3.

    The prosecution said on February 9, Eliot and Danium Energy Services allegedly conspired to induce the bank to deliver N2,890,278,000 to Danium Energy Services.

    According to EFCC, they pretended that Total Nigeria Plc, vide a February 9 letter, with Ref No: OPS/SUP/02/17/125, contracted Danium Energy Services to supply 15,000 metric tonnes of Automotive Gas Oil (AGO) for N4,015,800,000.

    They were said to have collected the money on February 17 in Lagos by inducing the bank to “deliver” it to Danium Energy Services.

    The alleged offence is contrary to Section 8 (a) of the Advance Fee Fraud and other Fraud Related Offences Act, 2006 and punishable under Section 1 (3)of the same Act.

    The defendants were also accused of “uttering” (presenting) a forged document dated October 5, 2016 with Ref No: OPS/SUP/10/16/361 to the bannk.

    The alleged offence is contrary to Section 19(6) and punishable under Section 1(2)(c) of the Miscellaneous Offences Act, Cap M17, Laws of the Federation of Nigeria 2004.

    The accused persons were also accused of “uttering” of a forged document dated January 30 with Ref No: OPS/SUP/01/17/084 to the bank.

    The defendants are yet to be arraigned.

  • Lagos trains directors on new trends

    The Lagos State Government  is involved in continuous training of its workforce in all  parts of  the civil service.

    The government has just concluded  a four-day workshop  for its directors with the theme: Effective strategic management for repositioning and higher responsibilities, organised by the Ministry of Establishments, Training and Pensions in conjunction with Messrs Novo Consult Limited in Lagos.

    Governor Akinwunmi Ambode  said workers are being trained to align with new trends.

    Ambode, who was represented by the Commissioner, Ministry of Establishments, Training and Pensions, Dr. Akintola Benson, maintained that the state had flagged off various training, seminars and programmes aimed at making the state’s civil service more proactive to various needs of the citizens.

    He stated that the training became necessary due to the roles the directors play in the state. He said it is aimed at restrategising the workforce, stressing that the state seeks to ensure its workforce get the best of training in the country and compete globally.

    He said: “The workforce remains the real engine of growth of our economy. Presently, Lagos is the best in the whole of Nigeria. The governor has decided to ensure continuous and adequate exercise to enable the public service in the state, which is the real engine room  compete effectively with their counterparts not only in Nigeria but in the United Kingdom, United States and other developed economies.

    “We are not limiting our success to only Nigeria. We are thinking of how to make our public servants compete favourably in any condition they find themselves across the country, Africa and in the world. The enormous value that knowledge and skills training bring to bear on the attainment of the strategic objectives of the government and the public service of Lagos State cannot be overemphasised’’.

    He said officers  participating in the training would be the ambassadors and seed-propagating agents of the administration’s resolve to re-orientate the Lagos State Public Service, saying that at the end of the training, the directors would imbibe strategies that would make them discharge their duties more effectively.

    The commissioner said further:“It is always helpful to remember that an effective strategy provides a picture of the desired long-term future.  In order to make sound day-to-day decisions, all members of the organisation must be able to begin with the end in mind.  All steps must, ultimately, keep the state on course toward the long-term objective.

    “Effective strategy results from the varied inputs of a diverse group of thinkers and participants in strategic decision-making must be free  to state contrary opinions. It is my expectation that all participants would obtain a firm grasp of these steps and fully comprehend the demands they make on management before the end of this training. Furthermore, I hope the analysis above underscores the importance of this seminar for the Lagos State Public Service.”

    He urged the participants to ensure that their strategic team is ready to make effective decisions.

  • Buhari nominates Non-Executive directors for CBN Board

    President Muhammadu Buhari in accordance with Sections 6 (1) (d) and 10 (1) and (2) of the Central Bank of Nigeria (CBN) (Establishment) Act, 2007, on Wednesday, forwarded the list of his nominees to the Senate for confirmation as Non-Executive Directors of the Board of CBN.

    A statement by the Special Adviser on media and publicity, Femi Adesina, said that the letter to the Senate President, Abubakar Bukola Saraki, contained the following as the nominees and their geo-political zones.

    Professor Ummu Ahmed Jalingo – North East, Professor Justitia Odinakachukwu Nnabuko – South East, Professor Mike I. Obadan – South South

    Others are Dr. Abdu Abubakar – North West and Adeola Adetunji – South West.

  • BDC directors move to close exchange rate gaps

    BDC directors move to close exchange rate gaps

    •CBN sells $768m to manufacturers, airlines 

    Directors of over 3,000 Bureaux De Change (BDCs) will meet today, in Lagos, to agree  on ways to force down dollar rates and narrow the rising gaps between official and parallel market rates.

    The emergency meeting followed last week’s sudden depreciation of the naira against dollar, which the BDCs said was against their business interest and economy. The naira closed last Friday at N395/$ in the parallel market, after stabilizing at N380/$ the previous week. With official rate at N306.15/$, gap between it and parallel market rate widened to N88.85 as at Friday.

    The Central Bank of Nigeria’s (CBN’s) statement  yesterday showed it sold $768 million to airlines, agriculture, petrol and raw material/machineries importers, among others at the marginal rate of N310/$. Details of the transactions showed that the retail and Secondary Market Intervention Sales (SMIS) got $418 million while $350 million went to wholesale auction, Business Travel /Personal Travel Allowances, and school fees. The BDCs bought at N360/$ while short-tenured Forwards of 7-30-day maturity will be sold this week to meet demand of manufacturers and all other forex users.

    President, Association of Bureaux De Change Operators of Nigeria (ABCON) Aminu Gwadabe, said today’s BDC Directors Meeting with the theme: Role of BDCs in Price Stability- Realities and Compliance would be used to warn erring BDC directors on the consequence of violating operating guidelines.

    He said the BDCs would continue to support CBN’s exchange rate stability objective and ensure that official and parallel market rate convergence was achieved.

    “We want BDC Directors to know the gains of price stability, rate harmonisation and regulatory compliance. Operators with infractions will face penalties. We did it in 2006 when the BDC window was first opened. We helped the CBN to narrow the huge gap between official and parallel market rates. We are ready to do it again,” he said.

    Gwadade said the BDCs helped the CBN to narrow the exchange rate gap from N520 to the present rate, and will continue to achieve better results as the CBN continues to fund BDCs with increased dollar allocations.

    “We are ready to partner with the CBN to ensure there is rate convergence. We want to make the market transparent, accountable and secure for the economy, investors and Nigerians in Diaspora so that more dollars will be attracted into the economy to strengthen the local currency,” he said.

    Gwadabe said the BDC directors the owned the business, and should understand they carry corporate governance burden, and will be sanctioned when their operations run contrary to CBN’s guidelines.

    “We want the BDC directors to fully take charge of their businesses, because they will be punished if anything goes wrong. We also want the public to know that BDCs are not criminals, but remain critical partner of the CBN in ensuring that price and exchange rate stability are achieved,” he said.

    The ABCON boss said BDCs’ capital is eroded anytime exchange rates go up, and naira is depreciated.  “We suffer financial losses anytime the naira depreciates. We want a better and harmonised exchange rate,” he said.

    He praised the CBN for giving each BDC $20,000 last week, adding that the funds will help to further strengthen the naira against the dollar. “We expect that the $20,000 given to us will go a long way to douse the tension in the market even as we urge the CBN to continue to boost liquidity in the market,” he said.

  • FG recalls sacked NCAA directors

    The Federal Government has recalled two out of the nine directors who were sacked from the Nigerian Civil Aviation Authority (NCAA) on Friday.

    The duo are Alhaji Adamu Abdullahi,Director of Consumer Protection, and Capt. Ayodele Sasegbon, Director of General Aviation.

    Mr Sam Adurogboye, General Manager, Public Relations, NCAA, confirmed the development to the News Agency of Nigeria (NAN) on Saturday in Lagos.

    “I can confirm that two of the directors, Abdullahi and Sasegbon have been recalled and their sack rescinded, ” he said.

    NAN reports that the government, through the Ministry of Transportation, had on Friday sacked the duo and other directors in the aviation regulatory agency with immediate effect.

    The directors affected by the purge were Alhaji Salawu Ozigi (Director of Finance and Accounts), Dr Joyce Nkemakolam (Director of Aerodrome and Airspace Standards) and Mr Aba Ejembi (Director of Administration).

    Others are Mr Emmanuel Ogunbami (Director of Licensing), Mr Benedict Adeyileka (Director of Airworthiness), Mr Justus Wariya (Director of Air Transport Regulation) and Mr Austin-Amadi Ifeanyi (Director of Human Resources).

    The affected directors were immediately ordered to handover to their next subordinate who will in the interim take charge of the activities in their directorates.

    It will be recalled that the government had on Oct. 12,2016 sacked or demoted 22 directors and general managers of the Federal Airports Authority of Nigeria (FAAN).

    The restructuring was based on the recommendations of the Presidential Committee chaired by the Head of Service of the Federation, Mrs Winifred Oyo-Ita.

    The Minister of State for Aviation, Sen. Hadi Sirika, had said the restructuring would be extended to the NCAA and the Nigerian Airspace Management Agency which were also currently overbloated. (NAN)

  • Bank directors owe N740b, says NDIC chief

    Bank directors owe N740b, says NDIC chief

    Bank directors owe commercial banks N740 billion, representing 40 per cent of N18.3 trillion non-performing loans in the banking industry, NDIC Managing Director/Chief Executive Umaru Ibrahim has said.

    He said the debt constituted insider/directors related loans and was far above regulatory threshold of five per cent for commercial banks.

    The NDIC boss raised alarm over what it called rising tide of Non Performing Loans in Nigeria’s banking industry. He spoke when members of the House of Representatives Committee on Insurance and Actuarial Matters visited the Corporation as part of its oversight function in Abuja.

    The NDIC boss stressed that “while the banking industry indicated strong fundamentals in regulatory assessment and rating, regulators were concerned about the rising tide of non performing loans (NPLs) in the banking system.

    He informed the legislators that as at December 2016, the 25 Deposit Money Banks (DMBs) had total loans portfolio of N18.53 trillion out of which N1.85 trillion or 10 per cent were NPLs.

    In other banking subsectors like the microfinance banks, (MFBs), Ibrahim noted that “there were 978 MFBs in existence as at December, 2016 with total deposits liabilities of N158 billion and total loans and advances amounting to N195 billion out of which N87.75 billion or 45 per cent were NPLs where N68.25 billion or 35 per cent constituted Insider related/Directors loans.”

    The NPLs he said “indicated a classic case of over-lending, accumulated interests charges and poor corporate governance.”

    By extension, the existing 42 primary mortgage banks (PMBs) Ibrahim said “had total deposits liabilities of N69 billion but with total loans portfolio of N94 billion, which indicated another case of over-lending, accumulated interests, poor corporate governance and high ratio of NPLs which stood at N51.7 billion or 55 per cent out of which N42.3 billion or 45 per cent were Insider related/Directors loans.”

    The resultant effects of this negative trend the NDIC boss warned “would be poor earnings and erosion of shareholders fund.

    The NDIC boss observed that this development had posed serious issues bordering on corporate governance which were capable of eroding public confidence in the banking system.

    He advocated for strict compliance with the existing code of ethics for bank directors and a review of the existing laws and regulations to proffer stiffer sanctions for Directors who exploit their positions and default in the payment of their credit facilities while still occupying directorship positions in the banks.

    He called the attention of the legislators to the delay in the approval of 2016 budget which he said “contributed to the modest execution of the budget.

    He restated the Corporations commitment to performance based budgeting system (PBBS) the essence of which is to ensure efficient allocation of resources to enable the Corporation achieve its strategic mandate.

  • Taraba sacks eight directors over alleged misconduct

    The Taraba Government on Monday said it had sacked eight directors over allegation bordering on misconduct, even as workers give strike notice.

    Addressing newsmen on Monday in Jalingo, Alhaji Bello Yero and Mr Yakubu Agbaizo, Permanent Secretary, Bureau for Local Government and Chieftaincy Affairs, and Executive Secretary, State Primary Education Board, respectively, said the development had caused delay in payment of salaries.

    They told Journalists that the sacked officials were being responsible for the delay in the payment of salaries of some local government workers, teachers and pensioners in the state.

    The officials however assured that government had taken measures to correct the situation.

    News Agency of Nigeria (NAN) reports that Taraba State has a workforce of 16,500.

    Workers in the state had issued a warning to the state government that they will embark on strike this Thursday, if their outstanding eight salary arrears were not paid.

    They spoke at the maiden edition of “Face the Press’’ programme, an initiative of Mr Emmanuel Bello, Senior Special Assistant to Gov. Darius Ishaku on Public Affairs, to enhance interaction between government and the media.

    Bello alleged that some directors of finance, clerks, cashiers and some officials in the local government councils, colluded with the 16 local government councils to short change junior workers.

    “Following some discoveries, government embarked on biometric verification exercise to ascertain the actual number of staff on its payroll.

    “Critical stakeholders including the organised labour were contacted and they have endorsed the exercise,’’Bello said.

    According to him, when the exercise began, some directors of finance, clerks and cashiers who were benefiting from the system, began moves to frustrate the exercise including mobilising some staff to come to the bureau to protest.

    “As we speak, many of those cleared by the exercise have been paid, those still complaining are those with BVN issues or different names on their documents which we are working hard to resolve,” he said.

    According to Bello, the government has sacked eight directors so far over the matter while other necessary action will be taken to serve as a deterrent to others.

    Also speaking, Agbaizo accused some education secretaries, directors of finance and other senior officials of the board of short changing primary school teachers in the state.

    The secretary explained that over 1,200 teachers were illegally recruited before he assumed office in 2015, leading to an increase in wage bill of the board to over N734 million monthly.

    “We are currently doing biometric exercise to ascertain the actual number of teachers.

    “Those who were successfully screened and have collected their salaries, we are working hard to sort out those with BVN issues and address them,” he said.

    According to him, some of them went as far as establishing ghost schools with ghost teachers in areas with difficult terrains.

    Agbaizo expressed confidence that all the abnormalities would be corrected by the time the ongoing biometric exercise was completed.

    The workers’ union is also demanding the removal of consultant on ground of gross incompetence in handling salary issues of the state.

    NAN also reports that workers in the state had in 2016, embarked on a six week strike over the non-implementation of a new salary structure for workers.

  • SEC, NSE to go after indicted companies’ directors

    SEC, NSE to go after indicted companies’ directors

    The Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE) are to sanction indicted companies’ directors, including seizing their assets.

    In what appeared to be a renewed push in line with the  government’s anti-corruption campaign, sources said the capital market authorities would henceforth go after directors of companies that abused their offices and took advantage of their positions to undermine corporate performance.

    Interim report by the Central Bank of Nigeria (CBN)-appointed new board for a quoted bank indicted the sacked directors of the bank of corporate governance failures, resulting in near collapse of the bank, which led to the apex bank’s intervention.

    Also, the Supreme Court recently ordered three former managing directors of three defunct quoted banks – Mr Okey Nwosu of Finbank Plc, Dr. Erastus Akingbola of Intercontinental Bank and Mr Francis Atuche of Bank PHB-to stand trial for alleged fraud. Akingbola was accused of stealing N47.1 billion while Atuche and Nwosu were accused of stealing N25.7 billion and N18 billion, totalling N90 billion.

    Regulatory sources said SEC and NSE would adopt any indictment against the directors by applying capital market laws, in addition to any penalty the non-capital market enforcement jurisdictions might have imposed in their indictments.

    “In the event of an indictment by other regulatory agencies, the Exchange will adopt such indictment and will not undertake its own separate investigation,” a management source at the NSE had told The Nation.

    The source noted that companies listed on the Exchange are required to comply with the SEC’s Code of Corporate Governance for Public Companies in Nigeria, which empowers SEC to enforce corporate governance rule, including imposition of penalties on directors for breach of the code.

    Investors have lost more than N3 billion in market value in the latest takeover of a quoted bank by the CBN on the allegation of corporate abuses and mismanagement. Similar takeover of Intercontinental Bank, Bank PHB and Finbank had led to massive losses for investors. CBN’s takeover of allegedly poorly run banks has been a major disruption and source of losses for investors. Within eight days of the takeover of Bank PHB and others, investors in banking stocks had lost N329 billion, which also contributed to the long-running recession at the stock market.

    The Investment and Securities Act (ISA) empowers SEC to seize the assets of persons and institutions that undermine the integrity of the capital market, abuse their offices, provide false or misleading information and act in a way that willfully undermine corporate performance and investors’ trust.

    The ISA empowers SEC to “in furtherance of its role of protecting the integrity of the securities market, seek judicial order to freeze the assets (including bank accounts) of any person whose assets were derived from the violation of this Act, or any securities law or regulation in Nigeria or other jurisdictions”.

    The ISA vested SEC with the responsibilities and powers to “act in the public interest having regard to the protection of investors and the maintenance of fair and orderly markets” as well as to “protect the in0tegrity of the securities market against all forms of abuses including insider dealing”.

    The Act also empowers SEC to “call for information from and inspect, conduct inquiries and audit of securities exchanges, capital market operators, collective investment schemes and all other regulated entities”.