CBN Moves against Banks, Gaming Companies over Unauthorised FX Transfers


•Places over 38 firms on PND
•To penalise management of banks
•Increases target credit facility to N100bn

By Obinna Chima in Lagos and Chineme Okafor in Abuja

The Central Bank of Nigeria (CBN) has moved against some banks through which some gaming companies have been making unauthorised foreign exchange transfers abroad.

Consequently, the apex bank has placed a post-no-debit (PND) instruction on the bank accounts of 38 companies, including Premier Lotto Limited, SV Gaming Limited, R & S Lotto Limited, over allegations of foreign exchange manipulation.

Apart from the gaming companies, the CBN, THISDAY learnt, would deal decisively with management of banks found culpable in the shady transactions.

Already, First City Monument Bank (FCMB), through which about $420 million was reportedly moved abroad without lawful authority has been queried and asked to explain why disciplinary action, including management change, should not be taken against it.
THISDAY learnt that there had been a lot of gaming and illegal transfers abroad by the company in collusion with some banks.

The apex bank, it was learnt, has decided to put a stop to the underhand deals in the interest of the economy.

The CBN, in a letter addressed to all banks, dated September 4, 2020, and signed by its Director of Banking Supervision, Mr. Bello Hassan, a copy of which was obtained by THISDAY yesterday, directed that the bank accounts of the 38 banks should be frozen.

The letter stated: “You are hereby required to place the underlisted accounts on PND with immediate effect and revert with the account names, numbers, currencies and balances of all accounts placed on PND.”

With the PND placed on the accounts of the companies, transactions won’t be allowed on the accounts.

Other companies, whose accounts were frozen, are Over the Top Entertainment Limited, Beaufortbet Nigeria Limited, TM Gaming Network Limited, Fumsky Bureau De Change, 3D Scanners Bureau De Change, Blue Sleevers Bureau De Change Limited, Maiburgama Bureau De Change Limited, Upront Movers Limited, Pocasharks Ventures, Incel Trading & Supplies Limited and Savvy Corp Limited.

Also on the list are Barkoli Trading Company Limited, Comm. Professional Limited, Blue Wall Nigeria Limited, JNFX International Limited, Suxus General Trading Limited, Escale Oil & Gas Limited, Triune Resources & Energy Limited, Exchange Telecommunications Limited, Vingt Communications Limited, Incel Mega Resources Limited, Camberwell Logistics Limited, Godoni Enterprises Limited, and Crescentpillars Investment Limited.

Others are Carisbrooke Global Enterprises, Nitegale Global Resources Limited, Northline Limited, Befour Energy & Allied Services Limited, Tasmara Integrated Services Limited, Incel Integrated Services Limited, Laketrail Investment Limited, Tamrose Ventures Limited, Roots Mining Company Limited, Rapid International Procurement Limited, and Springcreek Capital Limited.

Shedding more light on the reason for freezing the bank accounts of the 38 companies, a top CBN official, who pleaded to remain anonymous, accused them of illegal purchase of forex and repatriation of same abroad.

The official said: “To be honest, these are some of the people who have been putting pressure on the black market. They are so many and we are going after them gradually and we would ensure that they face the law.

“There is impeccable proof that one of the gaming companies, (name withheld), is suspected to have illegally siphoned over $420 million over a period of 18 months under the pretext of paying for software that can be procured by local software engineers. These funds were illegally transferred to their companies in Mauritius solely for the purposes of money laundering and economic sabotage.”

According to the official, the plan by the CBN is not only to penalise the companies, “but also the banks and their managements that allowed such illegal transfers to go through their systems.”

He described the activities of the companies and the banks that enabled them as economic sabotage, money laundering and insider trading, saying CBN will ensure not only prosecution but withdrawal of the licences of those found wanting.

“CBN is going to punish these companies and individuals to serve as a deterrent to others.

“Those of them involved in the gaming business, their business is in naira. Some of them would say they are paying for technical services. Assuming they even have the approval to take money out, why are they not in the official market? Why go to the black market? That means there is something illegal they are doing without documentation.

“We are accusing them, especially the gaming companies, of money laundering, illegal transfer of forex out of Nigeria. Most of them open accounts in Mauritius and other safe havens for them to move monies out of Nigeria and then do whatever they like.

“Now, they would say they are paying for technical services. Were those fees authorised officially by the CBN? The sole institution responsible for forex dealing in Nigeria is the CBN. Did they obtain the CBN’s approval?

“They don’t even have the National Office for Technology Acquisition and Promotion (NOTAP) approval, even if they say it is for software purchase, as some of them claimed. Indeed, one of them that went to NOTAP, the approval wasn’t granted because the so-called software they claimed they wanted to import can be manufactured locally,” he added.

The official alleged that the companies had contravened the Money Laundering Act, which carries with it stringent penalties that include the withdrawal of their licences and prosecution.

CBN Increases Target Credit Facility to N100m

The CBN has increased its N50 billion Target Credit Facility (TCF) to N100 billion.

The Director, Development Finance, Central Bank of Nigeria (CBN), Mr. Yusuf Yila, said at the virtual launch of the first pan-African MSME Academy that the bank had put in place many funding support initiatives to enable micro, small and medium scale enterprises (MSMEs) survive the COVID-19 pandemic and beyond.

He added that MSMEs are an important sector, hence the CBN and the Bankers’ Committee have put in place combined stimulus packages directed at them.

He urged MSMEs to take advantage of the CBN’s various funding windows to meet the demands of their businesses as the government is striving to revamp the economy through their efforts.

THISDAY had reported that the CBN had disbursed N49 billion out of its initial N50 billion Targeted Credit Facility meant to cushion the impact of the COVID-19 on the economy.

Giving details of the disbursement, CBN’s Director, Corporate Communications, Mr. Isaac Okorafor, had told THISDAY that about 80,000 operators of MSMEs and families had benefitted from the intervention fund.

The apex bank had earlier released guidelines for the disbursement of the special intervention fund.

The NISRAL Microfinance Bank (NMFB) serves as the disbursing financial institution and the fund is meant for SMEs, households and enterprises that have verifiable evidence of livelihood and evidence of business activities adversely impacted by the pandemic.
The scheme is being financed out of the CBN’s N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF).

Out of the fund, the CBN earmarked a maximum facility of up to N25 million for MSMEs while households can access up to N3 million based on the activity, cashflow and industry/segment size of a beneficiary.

CBN Raises N250bn for FG’s New Gas Expansion Drive

The apex bank has also raised a financial facility worth N250 billion to support Nigeria’s plan to make gas the first-choice fuel for its domestic economy; powering mostly the transport and manufacturing industries.

A circular titled ‘Framework for the Implementation of Intervention Facility for the National Gas Expansion Programme’ obtained by THISDAY yesterday, contained how the bank will fund the federal government’s new gas utilisation plan.

Amongst its intentions is to see Nigeria leverages the National Gas Expansion Programme (NGEP) to quickly switch to Compressed Natural Gas (CNG) as fuel for transportation and advance the use of gas for home cooking.

The NGEP was launched recently by the Minister of State for Petroleum Resources, Mr. Timipre Sylva.

The CBN’s intervention will support the growth of domestic gas-based industries such as fertiliser for agriculture and methanol for industrial purposes.

In the circular, the CBN explained that parts of the N250 billion will be administered through the Power and Airlines Intervention Fund (PAIF) for large-scale projects in the value-chain, in line with existing guidelines regulating the PAIF.

Its subsidiary, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank (NMFB) and other Participating Financial Institution (PFI) under its Agribusiness/Small and Medium and Medium Enterprises Investment Scheme (AgSMEIS) will administer other aspects of the fund, mostly for small-scale operators and retail distributors within the gas value-chain.

The circular said: “With proven gas reserves of 188 trillion cubic feet (tcf) of gas, the natural gas industry presents an opportunity to diversify the economy through domestic commercial utilisation of its (Nigeria) natural gas.

“Historical non-viability of domestic commercial production and utilisation of gas continues to severely constrain private investments in the industry. Consequently, the low level of investment in the industry has resulted in the minimal production and utilisation of Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) as clean alternative sources of domestic energy in Nigeria.

“Failure to harness its gas resources has had negative consequences for the country– economic, environmental, fiscal and social, particularly as the industry has the potential to engender rapid growth in Nigeria’s non-oil economy.

“To this end, the National Gas Expansion Programme (NGEP) was introduced to make CNG the fuel of choice for transportation and LPG, the fuel of choice for domestic cooking, captive power and small industrial complexes. Equally, gas-based industries, most especially the petrochemical, are to be enabled to support large industries, such as agriculture, industrial applications, textile and so on.

“Therefore, as part of its efforts at stimulating finance to critical sectors of the economy, the Central Bank of Nigeria (CBN) introduces the N250 billion intervention facility to help stimulate investment in the gas value chain.”

According to CBN, the fund will be administered in collaboration with the Ministry of Petroleum Resources.

It expressed optimism that its implementation will improve access to finance for private sector investments in the domestic gas value chain; stimulate investments in the development of infrastructure to optimise the domestic gas resources for economic development and fast-track the adoption of CNG and LPG as the fuel of choice in Nigeria’s domestic economy.

It explained that the fund will support the establishment of gas processing plants and small-scale petrochemical plants, gas cylinder manufacturing plants, Liquid to Compressed Natural Gas (L-CNG) regasification modular systems and autogas conversion kits or components manufacturing plants.

It will also fund the establishment of CNG primary and secondary compression stations, manufacturing of LPG retail skid tanks and refilling equipment as well as enhancement of autogas transportation systems, conversion and distribution infrastructure, domestic cylinder production and distribution by cylinder manufacturing plants and LPG wholesale outlets.

According to the CBN, micro-distribution outlets and service centres for LPG sales, domestic cylinder injection and exchange will also be funded by the fund to boost LPG adoption, while gas aggregators, manufacturers, processors and wholesale distributors will be eligible to apply to the fund for up to N10 billion per obligor through the PAIF.