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SEC shuts down ponzi scheme

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The Securities and Exchange Commission, SEC, has sealed off the premises of Dantata Success and Profitable Company, Kano for engaging in illegal capital market activities.

According to a statement from the Commission, the company was shut down for carrying out investment operations that fall within fund management without registration with the apex regulator.

According to SEC, “They do not have registration with the SEC and the Commission has powers according to Section 13 of ISA 2007, to shut down any company carrying out capital market activities without due registration.

Nigerian laws provide that business activities in the country have to be regulated, in this case, SEC is supposed to regulate them.”

“The strategy of the company is to solicit for funds from unsuspecting members of the public by enticing them with returns of monthly interest on investment of between 25 percent to 50 percent depending on nature and investment type.”
They also indicated a registration period of 5th February to 15th February in one of their numerous notices directing all prospective customers to make deposits into their bank accounts.

The company sells its forms to prospective investors according to their investment plans ranging from N1,000 to N3,000. The minimum amount investable is N50,000 while the maximum is N5,000,000.

The investment period of the scheme is pegged at a minimum of 30 working days to a maximum period of 12 months with offers of interest rates on a short and medium-term basis.

It claims to be involved in trading, general merchandise supply, oil and gas, transportation, import, export, and general contract.

The commission had established that the company’s activities also constituted an infraction of the Investments and Securities Act (ISA), 2007.

The SEC Management said the closure was to end unlawful activities of the company against unsuspecting investors and therefore urged investors to ensure they only deal with fund managers that are registered with the Commission.

“The account of the company have been frozen, the promoters have been arrested by the Nigeria Police Force and are undergoing interrogation.

“The Commission wishes to notify the investing public that the company is not licensed to carry out investments business of any type and as such its operations are illegal.

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External reserves hit $43 billion

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The Central Bank of Nigeria (CBN) Thursday said it expected further stability in the foreign exchange market in 2019, banking on the decision of the US Federal Reserve not to hike interest rate in the near future.

The apex bank added that the stability currently being enjoyed in the FX market had boosted the country’s external reserves to over $43 billion.

This is coming as the Bankers’ Committee has identified the creative industry and IT sectors as critical sectors to support social and inclusive growth in the country and was considering single-digit credit for the sectors.

CBN Director of Development Finance, Mr. Mudashiru Olaitan, explained that the reports that the US Federal Reserve will not raise rates was particularly good for emerging economies, including Nigeria as it means that the dollar is not going to strengthen against our currency.

“So, when we already have stability in our foreign exchange market, that is good news that is going to help stability,” he said.

Addressing journalists yesterday, alongside other banks chief executives at the end of the 342nd meeting of the Bankers’ Committee in Abuja, he said the committee deliberated on the global slowdown in economy, the downward growth projection by the IMF in 2019, partly as a result of the China, US trade tariffs war as well as Brexit.

However, he said the latest GDP growth figures from the National Bureau of Statistics (NBS) which showed the economy posted 2.38 per cent growth in the fourth quarter of last year offered some cheerful news for the country, stressing that the country’s economy forecast for the year looked impressive.

Also, the Group Managing Director/Chief Executive, Access Bank Plc, Mr. Herbert Wigwe, said the committee identified the creative industry and IT sector as critical sectors to support social and inclusive growth in the country.

He said the nature of financing would be long term debt at reasonable interest rates which could be as low as five per cent.

He said: “The nature of funding will be by way of long term debt at reasonable interest rates- far in single digits, it is not 10 per cent, not nine per cent; it could be within the range of five per cent, which is quasi-equity if you look.

“Again, as part of talent development, and huge population which needs to be educated in IT or movies, people need to pay to use these academies.

“What the industry is going to do is provide soft loans for most of these people, with very little equity at least to show participation because you don’t want to create a moral hazard- so they can use it, pay for these infrastructure, develop their talents and as they work, they can pay back those loans.

“So, that is broadly the mode of intervention, very unusual but enough to ensure that at the end of the day, we will all have huge levels of skills and talent being developed in millions to ensure that at the end of the day, this will affect our GDP growth rate and our earnings.”

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Stock market gains N712 billion

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The stock market has continued to display resilience as investors recorded a gain of N712 billion in seven days of trading.

The market, which declined in 2018 due to negative investor sentiment ahead of the general election and capital flow reversals, had ended January 2019 with negative performance.
However, renewed demand due to investors’ moves to take advantage of low prices led to a gain of N712 billion in seven days. Specifically, the market capitalization, which stood at N11.394 trillion at the end of January, rose to N12.106 trillion on Tuesday. This translated to a gain of 6.2 percent.

The market rally coming few days to the presidential elections, according to experts indicates that investors have ignored the election ‘noise’ to take advantage of low prices to increase their stakes in the market.

Nigerian stocks are significantly lowly priced after a bout of persistent decline that began in February 2018 and lasted to the end of January 2019. As at the end of January 2019, the Nigerian stock market main gauge, the Nigerian Stock Exchange (NSE) All-Share Index, was 2.7 percent negative, showing that many stocks were trading below their year’s opening values. But the South Africa market was 2.6 per cent positive, Kenya market 7.0 percent positive and Ghana’s market was 2.6 percent positive also.

The gains posted in the first days of February may not, however, have come as a surprise as some analysts have expected it. Analysts at FSDH Research had said political considerations, rising global yields ad increased yields on fixed income securities in Nigeria led to a reallocation of portfolio away from equities market, hence the decline in January.

But looking into February, FSDH Research they expected some positive performance.

“We expect savvy investors to take strategic positions in the months leading to an expected recovery in the second quarter of 2019. Despite the overall decline in January, we have seen pockets of this positioning over the months and expect to see further examples in February,” they said.

While the stock market comes with volatilities, investors stand to record significant gains provided they understand the market and have good investment objectives.

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CBN aims to boost credit

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The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday stated that given that the inherent risks in granting loans to Micro Small and Medium Enterprises (MSMEs) by banks are now reduced tremendously through the introduction of the National Collateral Registry (NCR), small businesses will now be able not only to access credit but also access such at reasonable rates.

This is coming as acting Chief Justice of Nigeria (CJN), Justice Tanko Muhammad, has assured that the judiciary will on its part continue to ensure that disputes arising from moveable assets lending are resolved speedily in line with constitutional provisions.
Emefiele assured that MSMEs in the country would be able to access credit at reasonable interest rates through the implementation of the NCR, which allows them to present moveable assets as collateral, for bank loans.

Emefiele spoke at the opening of the first national workshop for judicial officers on Secured Transactions in Moveable Assets Act (STMA) and National Collateral Registry with the theme: “Leveraging Moveable Assets for Credit Delivery in Nigeria: Legal and Regulatory Framework.”
He observed that small businesses had practically been denied access to credit as well as subjected to high-interest charges by commercial banks largely as a result of their inability to provide acceptable collateral.

The governor, however, said given that the risks inherent in granting loans to MSMEs by banks had now been reduced tremendously through the introduction of the NCR, small businesses “will be able not only to access credit but also access credit at reasonable rates.”
The CBN is already moving towards the enforcement of the Secured Transactions in Moveable Assets Act (STMA) across all financial entities.
Highlighting some of the achievements of the NCR since its creation in 2015, Emefiele said as at January 31, 2019, 628 financial institutions comprising 21 deposit money banks, four merchant banks, one non-interest bank, four development finance institutions, 551 microfinance banks, 13 non-bank financial institutions, and 34 finance companies had been registered on the Registry’s portal.

He said lending banks had also registered interest on movable assets worth N1.23 trillion, $1.14 billion and €6.08 million through 41,408 financing statements.
He added that within about 18 months, over 41,000 moveable assets with values of over N1.4 trillion, including those in dollar and Euro denominations had been registered in registry.
“This underscores the potential of movable assets as collateral to enhance access to credit and, hence, our resolve to drive its effective implementation,” Emefiele added.

On the rationale for the NCR, Emefiele said: “You will all recall that one of the biggest problem that the MSMEs face in Nigeria given the fact that we recognise their contribution to economic growth and development in any economy- the biggest constraints they have often gone through is their inability to provide acceptable collateral for the loans they seek to obtain from the banks.

“Banks and financial institutions themselves have often used their inability of these MSMEs to provide collateral as the reasons why they cannot lend to them.
“So, at the CBN, we thought that we must break this jinx and so we said access to finance must be a thing of the past in Nigeria for small businesses.”

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Court issues warning to CBN,NCC over Etisalat

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A Federal High Court in Abuja has warned the Central Bank of Nigeria (CBN), the Nigerian Telecommunication Commission (NCC) and others involved in the transaction for the sale of troubled telecom firm Etisalat (9mobile) against taking further steps to conclude the sale.

The warning was informed by the claim by some aggrieved investors that despite a subsisting order of the court, made on October 10, last year, by Justice Binta Nyako, barring parties to the transaction from taking further steps pending the determination of the suit, the CBN, First Bank, and others have allegedly sold the firm and transferred its ownership.

The warning by the court is contained in Form 48 issued by the court’s Registrar, on institutions listed as defendants in the suit marked: FHC/ABJ/CS/288/2018 filed by the aggrieved shareholders, through Afdin Ventures Ltd and Dirbia Nigeria Ltd.

The Form 48 reads: “Take notice that unless you obey the directions contained in the order of the Federal High Court number three, Abuja, made on the 10th of October 2018 ordering parties to maintain status quo, with regard to the sale of Etisalat Nigeria Limited (rebranded 9mobile), you will be guilty of contempt of court and will be liable to be committed to prison.”

The affected defendants are Karington Telecommunications Ltd, Premium Telecommunications Holding NV, First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat International Nigeria Ltd (trading under the name and style of 9mobile) and the Nigerian Communication Commission.

The aggrieved subscribers, who claimed to be major investors in Etisalat, said they were excluded from the firm’s decision making and therefore want a refund of their investment estimated at $43,330,950.

Afdin and Dirbia, in newly filed court documents, alleged that the defendants have not only sold the company, despite the existing restraining order, but they have also effected a transfer of ownership to a new set of buyers.

They exhibited newspaper publications, indicating that the defendants have allegedly proceeded with the sale in breach of the pending court order.

The aggrieved shareholders, in a pre-action notice issued by their lawyer, Mahmud Magaji (SAN), are threatening to institute fresh suits against the CBN, NCC and First Bank in an effort to retrieve their investment and accrued interest.

The pre-action notice, copies of which were sighted in Abuja, were addressed to the CBN Governor and NCC Executive Vice Chairman/Chief Executive Officer.

Part of the notice reads: “The intending plaintiffs, who are shareholders in Etisalat Nigeria Ltd, having purchased a total number of 1, 300,391 at $13,003,910 only and 3,300,004 Class A shares at $30,030,040) intend to sue for the recovery of their investment, dividends on their shores, and damages for breach of contract.

“Please kindly recall that, by the custodian agreement, all the shares certificates of the plaintiffs were kept under your custody.

“However, you have failed to exercise your role in good faith leading to the sale of Etisalat Nigeria Limited to Teleology Nigeria Ltd, at the detriment of our clients.

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