By Emma Okonji

A Senior Advocate of Nigeria (SAN) and President, People’s Alternative Front, Mr. Femi Falana has faulted the position of the United Kingdom and United States on the $8.1 billion fine imposed on MTN Nigeria by the Central Bank of Nigeria (CBN) for its alleged roles in illegal dividend repatriation and other contravention of  Nigeria’ s financial regulations.

The British and American governments had criticised the fine on the ground that it would scare MTN and other core investors from investing in Nigeria.

Speaking through John Bray, US Consul General, and Laura Beaufils, British Deputy High Commissioner to Nigeria, both countries said that foreign investors were discouraged by issues faced by MTN in recent times. They even alleged that some foreign investors had already taken  their invesments to neighbouring countries.

Both envoys were reported to have spoken on the sideline at the just concluded  2018 International Investment Conference organised by the Lagos Chamber of Commerce  as part of the activities marking the 2018 Lagos InternationalTrade Fair, which held in Lagos.

According to Bray, “Apparently things are being resolved, but once you make an announcement like that, there are probably guys sitting back there and waiting to get on the plane and fly back to the JFK and say, I am not investing again. So, we just want to get more investors here and part of that is improving the regulatory environment, improving infrastructure and dampening their fears about insecurity.”

Beaufils said: “Of course, investors are interested in regulations, policies and strategies, but ultimately, they look at signals like that and I think that was damaging. I think most people in Nigeria recognise that that was very damaging. There is a lot that is being done to address that and we are aware of that but sadly, investors also go beyond the headlines of such stories and my key point today is that we have to avoid such rash decisions at all cost in the interest of further investments that are absolutely essential to the economic development of the country, to job creation and to the vision that we all have of an incredibly rich and vibrant Nigeria.”

But contrary to their views and positions, Falana who welcomed the fine as a punitive measure to address financial anomalies in Nigeria, insisted that even the UK and US governments would do same, if there was clear case of infraction like that of MTN, which triggered the fine from the CBN.

According to him, the UK and US governments have, in the last nine years, imposed penalties of over $113 billion on banks and other corporate bodies for committing money laundering offences and for violating financial regulations.

Falana who described the positions of the US and UK governments as hypocritical, cheap blackmail and desperation to promote impunity in Nigeria, said their positions were not only discouraging, but also misleading, with the impression that the British and American governments would condone the violations of extant financial regulations in order not to discourage investors.

Listing some of the fines imposed by the US and UK governments on banks between 2009 and 2018, Falana said in 2012, UBS cooperated with a United States Department of Justice (DOJ) investigation in order to avoid criminal charges in connection with currency rigging, and imposed $203 million criminal fine to the DOJ in connection to LIBOR rate rigging, $342 million to the Federal Reserve in connection with its forex investigation, with no criminal charges.

“Again, $650 million criminal fine was imposed on the DOJ, plus an additional $60 million fine for violating a non-prosecution agreement. So $710 million to the DOJ total. $342 million to the United States Federal Reserve in connection with its forex investigation, £284 million (about $443 million) to the UK’s Financial Conduct Authority, $485 million to the New York State Department of Financial Services, and $400 million to the United States Commodities Futures Trading Commission.”

Similarly, Citi fine of $1.26 billion, shows $925 million criminal fine to the DOJ, $342 million to the Federal Reserve in connection with its forex investigation, while the JPMorgan fines of $892, shows $550 million criminal fine to the DOJ; and $342 million to the Federal Reserve in connection with its forex investigation.

Falana equally cited the cases of JPMorgan Chase and
four other Banks of $26
billion.

According to him, in February 2012, 49 states and the federal government reached an agreement, in what is now known as the National Mortgage Settlement, with the five largest banks in the country, including JPMorgan Chase. The settlement was the second largest civil suit settlement in U.S. history, only losing out to the Tobacco Master Settlement Agreement of 1988.

“The five banks agreed to pay out a total of $26 billion in fines; $5.29 billion of which came from JPMorgan Chase. One of the primary offences the banks were accused of was participating in the practice of robo-signing. While this term meant different things to different banks, the end result was the same. Documents were being signed and notarized prior to the financial crisis without any verification procedures in place for what was being attested to,” Falana said.

“In 2008, Bank of America acquired Countrywide, the largest home lender in the United States prior to the financial crisis. In 2011, Bank of America agreed to shell out more than $8.5 billion to finally absolve Countrywide’s sins in selling $174 billion worth of subprime mortgage-backed assets,” he added.