The Senate has indicted the Central Bank of Nigeria (CBN) of regulatory failure in the $13.9 billion capital repatriation by telecommunication giant, MTN.
The upper chamber also called for sanctions on Stanbic IBTC for “for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952.07 respectively.”
Recall that MTN was accused to have illegally repatriated the funds from Nigeria to other countries between 2006 and 2016.
The Senate had then referred the matter for investigation following a motion raised on October 2016.
The finding of the Senate was contained in a report made by its Committee on Banking, Insurance and other Financial Institutions which was adopted during plenary on Wednesday.
Senator Rafiu Ibrahim (APC, Kwara) while presenting the 40 page report noted that MTN did not deliberately violate the Foreign Exchange Act but that the CBN was lax, a situation which also led to sharp practices by commercial banks.
Ibrahim revealed that the committee summoned CBN, MTN management, the Financial Reporting Council of Nigeria, three commercial banks and some businessmen over violation of the Foreign Exchange (Monitoring and Miscellaneous) Act to the its public hearing.
The report said that the committee did not receive proof of conspiracy to contravene the foreign exchange laws.
Part of the observations made by the committee was that there was an evidence of massive capital outflow but the fact alone is not conclusive that a crime had been committed.
The following recommendations were then made by the committee which was adopted by the senate:
Condemnation of the CBN for failing in its duty to bring forth observed deficiencies of Foreign Exchange (Monitoring and Miscellaneous) Act (FEMMA) for amendment rather than granting extensions and exemptions which became prone to abuses;
A call on the CBN to sanction Stanbic IBTC for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952.07 respectively;
That CBN should equally “sanction the activities of Stanbic IBTC Nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation.”
The apex bank was also asked to come up with a proposal for the amendment of FEMMA with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of the foreign exchange.
The CBN should also “render periodic status report to the Senate on the performance of foreign investments inflows and outflows.”
Reading the report, Senator Ibrahim said; “No doubt, there is a disturbing evidence of foreign exchange hemorrhage in Nigeria especially in this period of recession.
“MTN for instance repatriated over $1.3 billion annually since 2006, or N13.92 billion between 2006 and 2016. Just for one company, the phenomenon constitutes a huge outflow that could pose challenges for foreign exchange and national economy stability.”