Financial Crime World

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Nigeria’s Corporate Failures: A Look at the Latest Developments

In recent times, several prominent companies in Nigeria have been embroiled in high-profile scandals, sparking concerns over the state of corporate governance in the country.

SEC Suspends Trading of Oando plc’s Stock

According to recent reports, the Securities and Exchange Commission (SEC) ordered the Nigerian Stock Exchange (NSE) to suspend trading of Oando plc’s stock in October 2017 following complaints from two shareholders who held over 70% of the company’s issued equity. The SEC investigation revealed that the company had breached several risk and compliance regulations, including rules against related party transactions and insider trading.

Other Companies Face Sanctions

  • Stanbic IBTC was fined N1 billion (approximately US$5 million) by the Federal Inland Revenue Service (FIRS) for alleged misstatements in its 2015 financial report. The bank’s chairman was also suspended as part of the sanctions.
  • MTN, Nigeria’s largest mobile telephone operator, faced a hefty fine of N1.04 trillion (approximately US$5.2 billion) from the Nigerian Communications Commission (NCC) for failing to register SIM cards on its network. However, after negotiations, the company was permitted to pay a reduced fine of N330 billion.
  • First Bank of Nigeria, United Bank for Africa, and Skye Bank were also fined by the Central Bank of Nigeria (CBN) for delays in transferring government funds to the Treasury Single Account.
  • Guinness Nigeria, an affiliate of Diageo plc, was slapped with a N1 billion fine by the National Agency for Food and Drug Administration and Control (NAFDAC) for various violations of its rules and regulations.

Government Obligations

It is worth noting that some government agencies have risk and compliance management obligations. For instance:

  • The Asset Management Corporation of Nigeria (AMCON) is required to keep books of all transactions in compliance with CBN rules under section 7 of its establishment act.
  • Part 15 of the Investment and Securities Act applies to government agencies seeking to raise finance on the capital market, subjecting them to the same disclosure obligations as other entities seeking finance.

Digital Transformation

In conclusion, Nigeria’s corporate failures highlight the need for improved risk and compliance management practices in the country. As the nation continues its journey towards digital transformation, it is essential that regulatory bodies and companies alike prioritize transparency, accountability, and good governance to avoid similar scandals in the future.

Statutory and Regulatory Differences

Despite the importance of corporate governance, there appear to be no key compliance differences between public sector and private sector risk and compliance management obligations. This lack of distinction underscores the need for consistent enforcement of regulations across all sectors to ensure a level playing field and prevent similar failures from occurring in the future.

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