CBN indicted by Senate for regulatory failure over MTN’s alleged $13.9bn repatriation

The Senate has indicted the Central Bank of Nigeria (CBN) for regulatory failure in the alleged illegal repatriation of $13.9 billion by telecommunications company, MTN.

Adopting the report of the investigation by its Committee on Banking, Insurance and Other Financial Institutions at the plenary on Wednesday, the Senate blamed sharp practices by commercial banks involved in the MTN affair on the CBN’s laxity.

Recall that the upper legislative chamber had in October 2016, begun a probe into allegations that MTN illegally transferred a total sum of $13.9 billion from Nigeria to other countries between 2006 and 2016.

The Senate panel had then summoned to a public hearing, the CBN, MTN management, the Financial Reporting Council of Nigeria (FRCN), three commercial banks and some businessmen over alleged violation of the Foreign Exchange (Monitoring and Miscellaneous) Act.

Recommendations based on findings by the committee were unanimously approved by the lawmakers.

Read also: #ParadisePapers: Tax declarations of listed Nigerians would be scrutinised- Adeosun

These include, to “condemn the Central Bank of Nigeria for failing in its duty to bring forth those observed deficiencies of FEMMA for amendment rather than granting extensions and exemptions, which became prone to abuses”.

The committee also recommended that the Senate mandate the CBN to sanction the commercial bank involved for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952:07, respectively.

It also called on the Red Chamber to mandate the apex bank to sanction the activities of the bank in respect to nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation.

“Mandate the CBN to come up with a proposal for the amendment of FEMMA, with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of foreign exchange. The amendment is still ongoing in the Senate.

“Direct the CBN to forthwith render periodic status reports to Senate on the performance of foreign investments inflows and outflows.”

The committee also noted, that “Whereas some of the contraventions were due to poor institutional supervision, systemic lapses and gaping opportunity for the rational investor to exploit.

“No doubt there is a disturbing evidence of foreign exchange haemorrhage in Nigeria especially in the period of recession. MTN, for instance, repatriated over $1.3 billion annually since 2006 or $13.92 billion between 2006 and 2016. Just for one company, the phenomenon constitutes a huge outflow that could pose challenges for foreign exchange and national monetary stability,” the report said.

“The Committee did not receive proofs of collusion to contravene the foreign exchange laws. There was evidence of massive capital outflow, but that alone is not conclusive that a crime has been committed. This was relied on by banks, which claimed that despite regular audit by CBN, the CBN did not apply any sanction,” it added.

 

RipplesNigeria… without borders, without fears

Click here to join the Ripples Nigeria WhatsApp group for latest updates.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now