The Central Bank of Nigeria (CBN) said it has fined four banks a total of ₦5.86 billion for breaching Nigeria’s extant laws and forex rules when they facilitated illegal repatriation of funds to South Africa on behalf of MTN.
The disclosure was contained in a press statement obtained by Nairametrics; a snippet of which had earlier been tweeted on CBN’s official Twitter handle.
The affected banks include:
Standard Chartered Bank- ₦2.4 billion
Stanbic IBTC- ₦1.8
Citibank- ₦1.2 billion and
Diamond Bank Plc- ₦250 million
The back story
CBN’s Director of Corporate Communications, Mr Isaac Okorafor said in the statement that the decision to sanction the banks became necessary after evidence emerged about how they used irregular Certificates of Capital Importation (CCIs) to remit funds on behalf of MTN’s offshore investors.
In view of this, the CBN has also asked the banks and MTN Nigeria to immediately repatriate a total of $8.134 billion; being part of funds that were illegally taken out of Nigeria by the telco.
“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 CBN.” -CBN
More details…
Senator Dino Melaye was first to hint on this matter when proposed a motion before the Senate in 2016, alleging that MTN Telecommunications Nigeria Limited illegally repatriated about $14 billion to South Africa between 2006 and 2016.
His petition also implicated the above-mentioned banks and even alleged that Nigeria’s Minister for Trade and Investment, Okechukwu Enelamah, played a huge role in facilitating the infraction.
Although the matter was initially investigated following the petition, the Senate in July 2017 temporarily absolved MTN of any wrongdoing. It ordered for more investigation into the matter after it blamed the CBN for supposedly failing to properly regulate Nigeria’s Forex.
The Senate later directed the apex bank to sanction only Stanbic IBTC Bank over what it said was “improper documentation in respect to capital repatriation and loan repayments” on MTN’s behalf.
CBN investigated the matter
The CBN said it thoroughly investigated the allegations of illegal remittances levelled against the banks, at the end of which evidence of wrongdoing was found against them. Consequently, the apex bank sent letters to each of the offending banks; informing them of the discoveries against them.
This is bad for all the banks involved
From all indication, this is a development for all the banks involved in this scandal. Not only is it bad for their reputation, it is also not good for their finances. As one commenter observed on the CBN tweet above, it is the shareholders’ who will bear the brunt of it.
Another commenter asked shareholders to hold the Board of Directors of the four responsible for the fines.
