Business

STANBIC IBTC, MTN COMMUNICATIONS IN N200MILLION BREACH OF CONTRACT PALAVER

Published

9 years ago

July 22, 2015

Sahara Weekly

A Lagos Lawyer, Dr. Charles Dumber Mekwunye, has slammed N200milion suit on the telecommunication giant MTN Nigeria communication Limited (MTNN), over an alleged breach of contract

Joined as co-defendants in the ensuing legal warfare, are an investment company, Lotus Capital Limited, an asset management Company Stanbic IBTC Asset Management and two other limited liability companies, IHS Holding Limited and INT Towers Limited.

Dr. Mekwunye, in his witness statement on oath he swore to and filed before a Federal high court in Lagos South West Nigeria by his Law firm, averred that sometime in 2008, he was invited by a fund management company, Lotus Capital Limited and Stanbic IBTC Assets Management Limited, to invest in a fund purportedly established by the Lotus Capital called ‘Telecoms Private Equity Fund, which was an investment into MTNN Linked Units, and thereby bought 5,000 of the MTNN Linked Units at the rate of 24.56 USD, per unit in 2008, and paid the sum of 122,800 USD, which was equivalent of N18,376,800 million, thereafter he entered into an agreement with the company who was an agent/nominee of Stanbic IBTC Asset Management Company and MTN Nigeria communications.

‪The investor also stated that Lotus Capital through a letter dated July 3, 2008, informed him that he had been allocated with 4,990 units, which represented 4,990 Linked Units of the MTN Communications Nigeria Limited’s private placement instead of 5000 MTN Linked Units. He added that pursuant to the said Telecoms Private Equity Fund Investment Agreement-Joint, he paid the sum of 122,800 USD, which was equivalent of N18,376,800 million, as consideration for the 5,000 units of the MTN Nigeria Linked Units.

‪He revealed further that both Lotus Capital Limited and Stanbic IBTC Asset Management Company, represented to him that at the end of three (3) years, the MTN Nigeria’s Linked Unit will be exchanged for MTN’s Shares in a Special Purpose Vehicle, which will be listed in the Nigeria Stock Exchange or globally recognized stock exchange, this he said was the primarily considered before investing in the MTN’s Linked Units.

‪However at the end of the three-year period, Stanbic IBTC asset management in breach of the agreement failed to create the Exit Special Purpose Vehicle, (SPV), as agreed in private placement memorandum on the ground that MTN International is already quoted on the Johannesburg Stock Exchange, and it was unwilling to setup another publicly quoted company, as well as on certain “tax consideration”. Whereas they clearly misinterpreted to him the creation of an Exit SPV when they never intended to setup same, especially vast the tax legislation, MTN International being already quoted on the Johannesburg Stock Exchange, and other circumstances as regards public companies have remained unchanged from the commencement of the offer and for the three years of the contract tenure up to February 2011, and should have been anticipated by MTN International and the defendants.

‪Following the failure/refusal of the defendants to setup a Special Purpose Vehicle, SPV, at the expiration of the three years anniversary of the nominee structure, as stated in the memorandum, Lotus capital without his consent or knowledge entered into a supplemental agreement to the Custodian Term and Condition with Stanbic IBTC Assets Management limited dated November 1, 2010, which was captioned Information Memorandum in respect of Exit Mechanism for beneficial shareholders of MTN Nigeria Communication Limited, amending the terms of the private placement memorandum regarding the establishment of a Special Purpose Vehicle, thereby creating alternative Exit Mechanism which was neither listed on the Nigeria Stock Exchange or any globally recognized stock exchange

‪Dr. Mekwunye averred further that in breach of the 2008 agreement, he was not given the 90 days or three months notice required under Clause 12 of Custodian terms and conditions to the private placement memorandum for the exchange of the exit mechanism and by April 4, 2013, Lotus Capital informed him of an upward review of “management fees” without his knowledge/consent, the said management fees was arbitrarily reviewed to one percent of the value of his investment, and was to take retroactive effect from January 2013, as a result, the sum of 1,750 USD, being one percent of the then value of his investment was deducted by the Lotus. Capital as per the letter of April 4, 2013 in January 2013, January 2014 and January 2015 making the total of 5,250 USD management fees deducted from total value of his MTN unit each year. This he claimed has caused him considerable loss since 2011.

‪As a result of the alleged breach of contract, the plaintiff is seeking the following court declaration that the Lotus Capital is in breach of the contract for the sale of MTN Linked Unit shares it entered into with him on May 21, 2008, a declaration that there exists a fiduciary relationship between them.

Declaration that the defendants improperly induced him to enter into telecom private equity fund management of May 21, 2008, by representing to him after three years of the nominee structure all MTN Nigeria Linked Units will be converted into shares in MTN Nigeria through a Special Purpose Vehicle.

‪ He is also seek a court order for the immediate return of the sum of 1,770 USD, being one percent value of his investment deducted by Lotus Capital the on January 1, 2013, and for the refund of 1,770 USD deducted in January 2014, and also the sum of 4,500 USD, deducted in January 2015, purported as management or nominee fees or such as court may find to have been deducted as management fees for each of the three years.

An order of perpetual injunction restraining the defendants jointly, and severally, their privies, agents, and successors from further deducting any sum as management or nominee or any other fees whatsoever from the dividends accruing to him from the dividends payable on MTN Nigeria Linked Units or from the value of the 5000 MTN Linked Units owned by him.

And an order compelling the defendants to pay him the sum of N200 million, as general damages against the defendants.

‪However, Stanbic IBTC Assets Management Limited, in its statement of defence deposed to by its Investment Manager, Mr. Olugbenga Saseun, averred that Dr Mekwunye and other defendants are unknown to it and that it has never had any relationship whatsoever, whether contractual or otherwise, with the investor.

‪ However he affirmed that the plaintiff in his statement of claim was right that sometime in 2007, MTN International under private placement arrangement offered MTN Linked Units of MTN Nigeria Limited to some private individual and institutional investors in accordance with the terns and conditions stated in a private placement memorandum, adding that he was involved and had knowledge of the offer by virtue of his employment with the Stanbic IBTC Asset Management company but stated that his employer did not either directly or through Lotus Capital, solicit the interest or investment of the plaintiff in the offer of MTN Linked Units offered under the private placement arrangement.

‪ He also affirmed that his employer never make any misrepresentation to the plaintiff, and that his employer was not privy to the alleged “telecoms private equity investment agreement” entered into by the plaintiff and Lotus capital therefore, it is not possible that his employer could have been a party to any misrepresentation allegedly made to the plaintiff that after three years the MTN Nigeria communications would set up a special purpose vehicle to be listed on the Nigeria Stock Exchange.

‪ Consequently, StanbicIBTC asset Management urged the court to dismiss the suit as is baseless, unmeritorious, and unjustifiable.

Business

ATMs empty as banks ration withdrawals

Published

16 hours ago

November 14, 2024

Sahara Weekly

ATMs empty as banks ration withdrawals

The Automated Teller Machines of Deposit Money Banks have consistently remained empty in recent months as banks grapple with a sustained low cash supply.

It was also gathered on Wednesday that some DMBs, particularly in the Federal Capital Territory, have begun another round of cash rationing, restricting maximum over-the-counter withdrawals to a daily limit between N5,000 and N20,000.

While banks struggle to get cash, Point-of-Sales operators have been fulfilling the cash needs of customers.

Speaking at the Facts Behind the Rights Issue Presentation of FBN Holdings at the Nigerian Exchange Limited recently, the Executive Director/Chief Financial Officer of First Bank, Patrick Iyamabo, said that the matter was an industry-wide one and not peculiar to a specific bank.

He said, “It is an industry problem. Most customers after exhausting the options available in other banks, tend to settle at FirstBank to address their cash needs. The challenge differs by location but we know it is a challenge that the regulator is looking into to address. But as we speak of physical cash, we must appreciate that the direction of the industry is to go digital.

“A lot of our customers do most of their transactions digitally, and you heard the GMD speak to this, very often people don’t want to transact in cash. In terms of this new order, your bank, FirstBank is very well positioned so if you look at the statistics and I’m speaking to independent statistics, just pick up your NIBSS report, the bank with the most stable platform meaning availability to always transact digitally is FirstBank. So, all our customers have the benefits of having their cash in First Bank and having access to this cash anytime anywhere and as necessary. It’s a huge advantage.”

Speaking anonymously with The PUNCH, a banker at a tier-1 bank put the blame on the Central Bank of Nigeria.

As a result, many people have turned to Point-of-Sale operators, who have become the primary channel for cash withdrawals, albeit often at higher transaction fees.

Major commercial banks visited by one of our correspondents on Wednesday claimed not to have sufficient cash allocation hence the ration withdrawals to serve more customers.

The banks visited include Guaranty Trust Bank, Zenith Bank along Airport Road, and EcoBank at Jabi in Abuja.

A bank customer at EcoBank, who spoke without mentioning her name, said she was only allowed to withdraw N5,000 from N20,000 previously allowed.

“I was just informed that I can only withdraw N5,000 from my account. Can you imagine? The amount will can’t even take me home.”

Our correspondent received the same answer when he attempted to obtain cash.

At GTBank and Zenith Bank along the airport road, customers were permitted a maximum withdrawal of N20,000 from N100,000 previously disbursed as a daily limit.

A customer, Mr Faith, who visited the bank expressed shock about the new limit. He said the banks didn’t give any cogent reason for reducing the withdrawal limit.

“I just visited these banks, and I was informed that I can only withdraw N20,000 from N100,000, which was the previous limit. They didn’t even give any reason for reducing, now I have to start looking for cash elsewhere. This country is just so annoying,” He vented.

Cash scarcity became a recurring and widespread issue across Nigeria after the Central Bank of Nigeria introduced a controversial policy in January 2023, which significantly reduced the daily and weekly cash withdrawal limits to N100,000 daily, N500,000 weekly for individuals, and N5m for business entities.

This decision, aimed at encouraging a cashless economy, led to long queues at ATMs, increased difficulty in accessing physical cash, and a general disruption of daily financial transactions for millions of Nigerians.

The policy’s impact was felt particularly by those in rural areas and lower-income groups, who rely heavily on cash for their day-to-day needs, exacerbating economic hardships across the country.

Last week, data from the CBN showed that currency in circulation climbed 56.1 per cent year-on-year to reach N4.31tn, up from N2.76tn in September 2023, reflecting an increase of N1.55tn.

This is just as currency outside banks surged by 66.2 per cent in September 2024, reaching N4.02tn compared to N2.42tn in September 2023, a notable rise of N1.60tn in just one year.

This indicates that the volume of currency retained outside the banking sector outpaced the total released for circulation within the past year.

Compared to August 2024, currency in circulation rose by 4.0 per cent month-on-month, adding N166.2bn from the previous figure of N4.14tn.

The CIC is the amount of cash–in the form of paper notes or coins–within a country that is physically used to conduct transactions between consumers and businesses. It represents the money that has been issued by the country’s monetary authority, minus cash that has been removed from the system.

Earlier in September, the CBN announced plans to sanction banks that fail to dispense cash through their automated teller machines, as part of efforts to improve cash availability in circulation.

The CBN also revealed plans to release an additional N1.4tn into circulation over the next three months to ease cash flow within the banking system.

This strategy aims to ensure that ATMs and bank branches have sufficient cash, addressing ongoing challenges faced by customers over cash shortages.

Efforts to get a reaction from the apex bank on the new situation proved abortive as the acting Director, Corporate Communications, Sidi Ali Hakama, did not respond to enquiries sent to her phone number.

Business

NNPCL Makes New Leadership Appointments

Published

17 hours ago

November 14, 2024

Sahara Weekly

NNPCL Makes New Leadership Appointments

The Board of Directors of Nigerian National Petroleum Company Limited (NNPCL) has just made fresh leadership appointments.

A communication by Olufemi Soneye, Chief Corporate Communications Officer of the nation’s oil company, announcing the development reads…

The Board of Directors of NNPC Limited is pleased to announce a series of strategic leadership appointments. These changes
reflect our continued dedication to enhancing corporate governance, improving operational efficiency, and ensuring long-term success in Nigeria’s energy sector.

The following key appointments have been made:
1. Mr. Adedapo A. Segun has been appointed as the Chief Financial Officer (CFO). Mr. Segun previously served as the Executive Vice President, Downstream, where he made significant contributions to the company’s downstream operations.
2. Mr. Isiyaku Abdullahi has been named Executive Vice President (EVP), Downstream.
3. Mr. Udobong Ntia has been appointed Executive Vice President (EVP), Upstream.

These appointments align with NNPC Limited’s commitment to building a unified and competent leadership team to drive operational excellence and support the organization’s strategic objectives.

The Board and Management also extend their deepest appreciation to Mr. Umar Ajiya and Mrs. Oritsemeyiwa A. Eyesan for their outstanding dedication and service to NNPC Limited.

NNPC Limited remains committed to achieving operational excellence, enhancing global competitiveness, and ensuring financial sustainability, while prioritizing the interests of the Nigerian public in the petroleum industry.

Olufemi Soneye
Chief Corporate Communications Officer
NNPC Limited
November 13, 2024S

Business

Oil Cabals crippled Govt Refineries, now working against Dangote Refinery – Pastor Adeboye

Published

1 day ago

November 13, 2024

Sahara Weekly

How Prophet Kingsley Predicted The Rumble In Pastor Adeboye Led RCCG

Oil Cabals crippled Govt Refineries, now working against Dangote Refinery – Pastor Adeboye

The General Overseer of the Redeemed Christian Church of God (RCCG), Pastor Enoch Adeboye, has urged Nigerians to pray for divine intervention in the face of efforts by unscrupulous oil marketers to thwart the operations of the Dangote Petroleum Refinery, following the previous sabotage of Nigeria’s four state-owned refineries.

The respected clergyman made the call for nationwide prayers during the November 2024 Abuja Special Holy Ghost Service themed ‘Total Restoration’, which held in the capital city. While Adeboye did not explicitly name the Dangote Petroleum Refinery, his remarks echoed the ongoing attempts by oil marketers to prevent the refinery from functioning as it was designed to.

The Dangote Refinery based in Ibeju-Lekki, Lagos is the only facility currently refining petrol in Nigeria, and Adeboye’s comments reflected the dispute between the refinery and oil marketers, who seek to continue importing fuel for personal gain.

Pastor Adeboye reminded the congregation that it was God who raised Aliko Dangote to establish a refinery after years of failed attempts to revive Nigeria’s four public refineries, which had consumed billions of Naira with little result. He questioned the persistence of fuel imports despite Nigeria’s status as a major crude oil producer.

“Are we under a curse?” he asked. “We have four refineries, we poured all kinds of money into them, none of them is working. But God raised someone to build a refinery that works. He is not my relative, he is not from my village. He is not even a Christian, but he is a Nigerian who says, ‘Why should my people suffer when I have the means to build a refinery that can work?’ Now he is refining petrol, and some people want to stop him from selling it, so they can keep importing.”

Adeboye also pointed out the damage caused by the fuel subsidy, describing it as a significant drain on Nigeria’s resources, contributing to the country’s mounting debts and corruption. He stressed that when President Bola Ahmed Tinubu announced the end of the subsidy in 2023, Nigerians largely welcomed the decision, but oil marketers, who benefitted from the subsidy regime, were furious.

These marketers, the renowned pastor claimed, have formed alliances with some International Oil Companies (IOCs) and other powerful interests to obstruct the Dangote Petroleum Refinery. This includes restricting access to crude oil, forcing Dangote to import crude from countries like the United States, among others.

He called for prayer for the total restoration of the country, noting that the Nigerian people are suffering the consequences, as the prices of essential goods have soared, pushing many items beyond the reach of ordinary citizens. “The masses are the ones suffering because these marketers, who are bent on keeping imports alive, already have more money than they can ever spend,” he said.

Despite the Dangote Petroleum Refinery’s capacity to meet Nigeria’s entire demand for petroleum products – and even to export surplus fuel – oil marketers continue to pressurise the government to allow ongoing petrol imports. This has placed additional strain on the Naira, which has continued to depreciate.

Recently, the Crude Oil Refineries Owners Association of Nigeria (CORAN) urged the government to protect local refineries from unfair competition posed by importers and international petroleum traders, in line with provisions in the Petroleum Industry Act (PIA).