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Illegal forex deals: CBN slams N5.87bn sanctions on 4 banks

by Daily Trust
(30/8/2018)

The Central Bank of Nigeria (CBN) has slammed sanctions totaling N5.87 billion on four banks.


The CBN also asked the banks to refund the sum of $8,134,312,397.63 for what it described as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’.

Figures released by the CBN on Wednesday indicated that the highest fine of N2,470,604,767.13 was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined the sum of N1,885,852,847.45. For its punishment, Citibank Nigeria was penalized in the sum of N1,265,541,562.31, just as Diamond Bank was directed to pay the sum of N250 million for violating extant rules.

A statement by the CBN Director, Corporate Communications, Isaac Okorafor, said that “the actions of the apex bank became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.”

“The CBN has therefore asked the Managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of
$8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria.”

The CBN spokesman further disclosed that the decision of the Bank followed thorough investigations by it into the allegations.

He said further: “the investigations revealed that the sum of $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs. Similarly, he said the sums of $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively during the period 2007 and 2015.”

Accordingly, he said the CBN had directed the affected banks to immediately refund the respective sums to the apex bank.

The CBN said its 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.

Mr. Okorafor 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 would be appropriately sanctioned, which sanctions may include denial of access to the Nigerian foreign exchange market.

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