The Central Bank of Nigeria fired back at the NESG following a Businessday report that accused the bank of seeking immunity for CBN Governor, Godwin Emefiele in the proposed Banking and Other Financial Institution (BOFIA) Bill.
In a press release published on the website of the central bank, it addressed wide-ranging claims made against it by the National Economic Summit Group (NESG) which purportedly leaked to Business Day, a newspaper in Nigeria. In the article publishedon Tuesday, the newspaper alleged “business leaders opposed bill to give CBN Governor immunity” according to section 51 of the proposed bill.
“Section 51 of the Bill which grants immunity from judicial intervention to the Federal Government, the CBN, or any officer of the Federal Government or the CBN from any action, claim or liability to any person in respect of anything done in the exercise of their duties under the Bill.”
What section 51 actually says
“neither the Federal Government nor the Bank nor any officer of the Federal Government or the Bank, shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith in pursuance or in execution of, or in connection with the execution or intended execution of any power conferred upon that Government, the Bank or such officer, by or under this Bill or the CBN Act or any rules, regulations, guidelines or directives issued thereunder or pursuant to any other relevant laws,”
CBN fires back
The CBN retorted that the section claimed to be granting immunity to the Governor of the Central Bank already exists as Section 53 in the old Act long before Emefiele became Governor.
“On the revisions to the BOFIA Act, there are many reasons why we see a total ignorance or malicious intent on the part of the NESG. First, the provision they refer to as being currently conceived as part of the new BOFIA already exists as Section 53 in the old Act, which is now Section 51 in the amended Act passed by the National Assembly. The current bill has not proposed any changes to that section at all.”
The CBN also explained that the provisions in section 51 do not provide any immunity to the CBN Governor as it would for elected Governors of States of the Federation but rather it protects the apex bank and their officials against litigations brought forward against it for actions it may have taken in good faith.
“Second, contrary to their misleading anxiety and associated reportage, the provision of Section 51 does not purport to confer immunity on the Governor of the Central Bank of Nigeria like that which obtains for State Governors. Rather, this provision protects the Federal Government, the Central Bank of Nigeria and their respective officials against adverse claims for actions or omission in good faith exercise of powers under BOFIA and other specified statutes including the Central Bank of Nigeria Act and regulations made thereunder.”
In the Businessday report, it cited a quote from an unnamed CBN Governor who wondered why the bill would include such a provision alleging it was to provide immunity for the Governor.
“What would a governor of the central bank need this immunity for?”, asked a former governor of the apex bank who spoke to our reporter….you already have in BOFIA a section that requires anyone to first write the governor before he or she can sue the governor. The governor does not need the kind of immunity we are talking about and I do not think there is any sensible country in the world with a provision like this. What do we do if it happens that a governor contravenes the very law establishing the bank”?
It also quoted the NESG reporting that it “also kicked against granting immunity to the CBN and its officers from judicial review of acts undertaken in the exercise of their administrative duties.”
Who is on the right track
Reading between the lines, one does not need a lawyer to explain that the provision in the passed bill is not new and surely was not introduced by the current governor to protect himself from immunity. The provision has been in BOFIA (the existing law) and is also included in other laws setting up regulatory bodies such as the Securities and Exchange Commission (SEC), AMCON, NDIC, and even the CBN.
The provision basically protects regulatory bodies from being sued indiscriminately by parties to whom they may have carried out action against. For example, in the case of sacking the board of a failed bank, the directors may sue to get an injunction against the central bank curtailing its powers to take swift action where necessary.
It appears critics are now throwing the kitchen sink at the CBN Governor for actions they deem “unpopular” even if it means raising false alarms. Since 2015 when Nigeria’s economic crisis begun, Godwin Emefiele has come under severe criticisms in his handling of monetary policy and management of the exchange rate.
Thus, no matter his intent, critics view his actions with skepticism and caution suggesting a lack of trust between them and his leadership of the CBN. Despite a deluge of criticisms, he remains in favour of the current government after his second term was renewed. He is the first CBN Governor to serve two terms since Abdulkadir Ahmed whose term ended after 10 years in September 1993.
Federal High Court directs meeting to consider the transfer of GTBank into a Holding Company
A Federal High Court has directed that a meeting of the holders of GTBank Plc, be convened to consider the transfer of the bank to a holding company.
The Board of Directors and management of Guaranty Trust Bank has disclosed that the Federal High Court of Nigeria on November 6, 2020, directed that a meeting of the holders of the fully paid ordinary shares of GTBank Plc, be convened on December 4, 2020 for the purpose of considering the transfer of the bank to a holding company.
This information was conveyed through a Notice of Court-Ordered Meeting by the bank, and published on the website of the NSE. It was signed by the bank’s secretary, Erhi Obebeduo, and the Nigerian legal counsel to the bank, Aluko & Oyebode.
According to the information contained in the disclosure, the court-ordered meeting of the holders of the fully paid ordinary shares of Guaranty Trust Bank Plc to be convened for the purpose of considering and if thought fit, approving, with or without modification, a Scheme of Arrangement pursuant to Section 715 of the Companies and Allied Matters Act, 2020 between the bank and the holders of the fully paid ordinary shares of 50 Kobo each in the bank.
The meeting will be held at the Oriental Hotel, 3, Lekki Road, Victoria Island, Lagos, Nigeria, at 10:00 a.m. or soon thereafter, at which place and time the Holders are requested to attend.
Resolutions to be proposed at the meeting
The following are some of the sub-joined resolutions that will be proposed, and if thought fit, passed as special resolution at the meeting:
- The Scheme of Arrangement dated November 4, 2020, a printed copy of which has been produced for the meeting and, signed by the Chairman be and is hereby approved.
- In accordance with the Scheme, the 29,431,179,224 ordinary shares of 50 Kobo each in the issued and paid-up share capital of the Bank held by the shareholders be and are hereby transferred to Guaranty Trust Holding Company Plc (the Holdco) in exchange for the allotment of 29,431,179,224 ordinary shares of 50 Kobo each in the share capital of the Holdco to the shareholders in the same proportion to their shareholding in the Bank credited as fully paid without any further act or deed.
- In accordance with the Scheme and pursuant to the prospectus issued by the Holdco, each existing holder of the Global Depositary Receipts issued by the Bank (the Existing GDRs) receive, as consideration for each existing GDR held, one new Global Depositary Receipt issued by JP Morgan Chase Bank N.A. (JP Morgan Chase), the Depositary Bank for the Holdco GDR programme (the Holdco GDRs).
- The Board of Directors of the Bank be and is hereby authorised to take all necessary actions to delist the shares of the Bank from the official list of The Nigerian Stock Exchange.
CBN reviews appointment requirements for CCOs in Banks
The CBN has reviewed the appointment criteria for CCOs in Merchant Banks and Regional Banks.
The Central Bank of Nigeria has reviewed the appointment criteria for Chief Compliance Officers in Merchant Banks and Regional Banks (Commercial and specialized).
This is according to a circular issued by the apex bank dated October 9, 2020, and signed by its Director of Financial Policy and Regulation Department, Kevin Amugo.
According to the latest notice, Merchant banks and Regional banks are hereby granted dispensation to appoint CCOs on a grade not below an Assistant General Managers. However, the CCOs will report directly to the ECO of the financial institutions who have sole responsibility for compliance matters in the bank.
This latest action by the CBN is the sequel to consultations and engagement with stakeholders emanating from its earlier circular referenced FPR/DIR/GEN/CIR/06/004 of September 28, 2016, in which the tentative requirements for Executive Compliance Officers and Chief Compliance Officers of deposit money banks were mooted.
Meanwhile, the requirements and responsibilities of Executive Compliance Officers remain as earlier communicated in the circular dated 28 September 2016.
A part of the recent circular signed by Mr. Kevin read thus,
“Further to the circular referenced FPR/DIR/GEN/CIR/06/004 of 28 September 2016 on the appointment of Executive Compliance Officers (ECO) and Chief Compliance Officers (CCO) of deposit money banks, the CBN has, after due considerations and presentations by stakeholders on the size, structure, operation, and dynamics of classes of operators in the sectors reviewed the requirements for the appointment of Chief Compliance Officers.”
CBN grants Greenwich Trust Limited operational license for merchant banking
CBN has upscaled Greenwich Trust Limited to the status of a merchant bank.
The Central Bank of Nigeria (CBN) has upscaled Greenwich Trust Limited and granted it, operational license for merchant banking in the country.
According to an official statement released by the firm, the entity would be known as Greenwich Merchant Bank Limited. This license allows Greenwich Merchant Bank to upscale and offer such diverse services as corporate banking, investment banking, financial advisory services, securities dealing, treasury wealth and asset management, etc., making it possible to provide increased value to stakeholders beyond its previous scope.
Recall that the minimum capital requirements for establishing a merchant bank according to Merchant Banking Licensing Regulations in 2010 are N15 billion
With the addition of Greenwich Merchant Bank, Nigeria now has six merchant banks. The others are; FBN Quest, Coronation Merchant Bank, DSH Merchant Bank, Nova Merchant Bank and Rand Merchant Bank.
About Greenwich Trust Limited
Greenwich Trust Limited is an investment banking firm duly registered with relevant authorities such as the Nigerian Securities and Exchange Commission (SEC). It is a diversified firm with subsidiaries such as Asset management, GTL Properties, GTL Securities Limited, Cedar Express Limited and Meyer Plc.
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