Category Archives: Editorial Opinion

Kuforiji-Olubi Bags Jail Term In London …Jailed Son On The Run

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There is a powerful Yoruba mantra that says “May our old age be more auspicious than our beginnings”. This aphorism would definitely apply to the mess that our revered Chief of Ijebu and Egba descent, Chief Mrs. Bola Kuforiji-Olubi, has now enmeshed herself in. This Amazon is, without doubt, the most successful and accomplished woman that Nigeria has ever produced. She is a chief of Ijebuland and Egba Kingdom. She was President of the Institute of Chartered Accountants of Nigeria (ICAN), Chairman of the second largest bank in Nigeria, the United Bank for Africa (UBA Plc), Chairman of British Engineering Company, BEWAC, Chairman of French building materials supply conglomerate, EQUIP, Nigeria’s federal Minister of Commerce and Industry and many other accolades. She is very well blessed and successful in her travails through life.

She had studied Accountancy in England and got to know many Lagosians and Nigerians including Grammarians, Chief Ernest Shonekan, Nigeria’s former Head of State, Dr. Yemisi Kuforiji, past Chairman of Yoruba Tennis Club, Mr. S. Babashola Joseph, leading legal practitioner, octogenarian, member of the Yoruba Tennis Club and father of Mr. Babaseyi Joseph, current Chairman of the Yoruba Tennis Club. She passed her accountancy exams in the UK with flying colours and met other great Nigerian Chartered Accountants to be like Prince of Ijebu- Ode, Supo Adetona, Chief Tunde Anjous, Aremo Fola Awobo-Pearse and others. She also met a cousin of octogenarian, Dr. Yemisi Kuforiji, Soji Kuforiji whom she married and bore three children for.

 

As life is not always a bed of roses, she had separated from the father of her children who is late, but she kept the Kuforiji name in the interest of her children and as, indeed, she is legally entitled to so do. She later met dashing and youthful-looking Chief Daniel Adeyanju Olubi who was an administrative manager in one of the companies she held sway in, married him and, in her most popular and successful days, became known as Chief Mrs. Bola Kuforiji-Olubi. Her husband, Yanju, a good friend of late Chairman of the Yoruba Tennis Club and leading architect of his time, Kingsonian, Arc. John Seyton Macgregor (AKA JSK) of the iconic and dynastic Lagos Macgregor family who took immensely to him and enhanced Olubi’s initiation into the Yoruba Tennis Club.

 

Mrs Bola Kuforiji-Olubi later separated from Chief Olubi and has been living a happy retired life caring for her children, Tokunbo and Joke and their children in her massive riverside mansion on Marine Road Apapa while surrendering the management of her real estate holdings to her children and taking occasional vacations and health check travels to her London millionaires row residence on Philimore Gardens, Willesden near the Nigerian Ports Authority (NPA) houses, the Asemotas dwelling on Manor House Drive, the Mike Adenuga, the Dangote and Fola Ogunlesi residences on Willesden Lane, NW London.

 

It has therefore come not only as a surprise but also as a thundering shock to hear that this lady of such high integrity is now languishing in the notorious Holloway women’s prison in London, England. This social media site was absolutely incredulous and gob smacked to learn that this dignified woman would in her approach to octogenarianism be now irked in such a maelstrom of depravity.

 

In a nutshell: She was involved in a business venture with three international companies in Nigeria. A business disagreement occurred between her, the two oil and gas companies and another international oil company (IOC). The original business agreement provided for arbitration on any disagreement to be settled in City of London, under English law, especially as Mrs Olubi, the Chairman of the company and her son, Olutokunbo Afolabi Kuforiji, a Director of the company, are British citizens. The matter was taken before an English judge who ruled that a sum of USD19m in dispute should be paid by the IOC to the British company and a letter directing the IOC to so do be effected by Mrs. Olubi’s company.

 

Mrs. Olubi reverted to a Nigerian court, which failed to give a ruling on the matter (typical of procrastination and prevarication by Nigerian courts) even though the IOC offered to pay the amount in dispute to the court pending final judgment.

English court disagreed with intervention by Nigerian court as the agreement provided for arbitration in London and ordered Mrs. Olubi to direct the writing of the English court ordered directive.

Mrs. Olubi resorted to another Nigerian court and attempted to obtain another ruling. The English court ordered Mrs. Olubi to appear in court and comply with its ruling or face contempt of court.

 

Mrs. Olubi appeared in court and attempted to recuse herself from proceedings averring that she had resigned as Chairman of the defendant company as she had handed over the baton to her son, Tokunbo. The Judge, Justice Burton of the Commercial Division of the High Court of Justice Queens Branch Division, again admonished her and gave her a final warning that he was cognizant and considerate of her stature and age and thus gave her a last chance for her and her son to comply with the court ruling and purge herself of the seeming contempt.

Mrs. Olubi subsequently departed the shores of the UK and could not be found in her London residence.

Quite a few months later, when the Judge learnt of her presence in London, he issued a warrant for her arrest.

 

Mrs. Olubi refused to attend court stressing that she was very ill, on a wheelchair and only able to leave her house for medical appointments. The applicant in the case utilised the ploy usually associated with tracking of social security cheats who pretend to be disabled and are photographed the next day playing football. They set up a team to monitor Mrs Olubi’s movement and photographed her a few days later shopping gaily on London most famous Oxford Street.

When this photographic evidence was produced as evidence to the English Judge, he ordered the immediate arrest of the Madam. The Judge consequently sent her to the infamous Holloway Women Prison in North London where she is serving a one-month sentence for contempt of court.

Holloway Prison is reputed to be mostly occupied by Nigerian women fraud convicts (many called Alhaja Holloway) and the prison is irreputable for vice, vile, prostitution, molestation and Lesbianism.

 

The Judge also convicted and sentenced Mrs. Bola Kuforiji-Olubi’s son, Mr Olutokunbo Kuforiji, to four months imprisonment, albeit in absentia. He is likely to join ex-Governor James Ibori in SW London Brixton Prison where porridge is the most common and savoury item on the menu.

Tokunbo Kuforiji is on the run and has been declared wanted while his mother, Chief Mrs. Bola Kuforiji-Olubi languishes in the roach-infested Holloway Women Prison at the pleasure of Her Majesty, the Queen of England.

What is unknown is whether failure to comply with the court ruling may warrant a continuous sentencing and whether the amount of £300, 000 costs awarded against her may lead to the sale by auction of her London property.

 

How the mighty are falling! How can this happen to such an eminent personality? In the UK, the law is no respecter of persons but we think the Nigerian High Commission, on behalf of the government of Nigeria, should have taken diplomatic steps to sort out this matter. We hasten to add that it is strongly believed that Mrs. Olubi had utilized the Nigerian Immigration Services to deport the complainant in the matter from Nigeria although an equally reputable and powerful Nigerian oil and gas conglomerate is standing firmly behind that foreign company and that the expatriate deportees are back in the country transacting business in the oil and gas industry.

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EFFECT OF THE AMMENDED PENSION REFORM ACT 2014 (PRA 2014) AND IT’S EFFECT ON EMPOYER AND EMPLOYEES.

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On July 1, 2014, President Goodluck Jonathan signed into law the New Pension Reform Act 2014 (PRA 2014) after 10 years performance of the old Pension Reform Act of 2004. The new law repeals the 2004 Pension Reform Act No. 2 and prescribes a 10-year jail term for pension thieves.

The Act does not specify a commencement date, however, Section 2 of the Interpretation Act CAP I23 of LFN 2010 stipulates that, where no date of commencement is contained in an Act, the commencement day shall be the day the Act was passed or signed into law. Therefore, the commencement date of the new Pension Act is 1st July, 2014.

The changes in the old pension Reform Act 2004, was aim to streamline the savings of funds towards retirement and the provision of funds after retirement, including availability of funds for the surviving beneficiaries of deceased employees whilst in service and retirees under the pension scheme within the guaranteed period.

  • The key highlights and salient point of the new Pension Act are detailed below:Minimum number of staff requirement for employer to take part in pension scheme has been increased to 15 from 5 employees as stipulated under the 2004 Act.
  • Section 8(1) of the New Act exclude/exempt employees that is 3 years or less to retirement from participating in the pension      scheme.
  • Minimum contribution from employer has been increased from 7.5% to 10%. The minimum level of contribution from employee was also increased from 7.5% to 8%. This means the two rate is no longer equal. TNew-Pension-Reform-Act-2014he greatest impact is the base upon which the monthly contribution is to be calculated. The definition of ‘monthly emoluments’ has been expanded to mean the total emolument as defined in the employee’s contract of employment provided it is not less than the total of the employee’s basic salary, housing and transport allowance.
  •  Group life policy’s benefit is now allowed to be paid to a name beneficiary of employee upon his death. In the Old Act (Act 2004), Group life policy’s benefits are paid into a deceased employee’s Retirement Savings Account (RSA) which makes it difficult for beneficiaries to access. Consequently, employers are required to ensure that their employees avail the insurer with the list of their beneficiaries to receive the proceeds of their company’s Group Life Policy under which insurance has been taken out for their lives whilst in service.
  •  Voluntary contributions that is withdrawn within five years are taxable in the hands of the employee
  •  The 2014 Act also empowers PenCom, subject to the fiat of the Attorney General of the Federation, to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees within the stipulated time.
  •  In the event of loss of jobs (where an employee disengages from employment or is disengaged), the new Act reduces the waiting period for accessing benefits from six months to four.
  •  The Pension Reform Act 2014 makes provision that would compel an employer to open a Temporary Retirement Savings Account, TRSA, on behalf of an employee that failed to open an RSA within three months of assumption of duty.
  •  The Act also allows an employer to pay additional payments benefits to employee upon retirement OR can elect to take full responsibility of the contribution (that is, bears the total pension contributions of its employees). In that case, the Contribution shall not be less than 20% of the employee’s monthly emolument.

 OTHER AREAS MAINTAINED BY THE NEW ACT 2014 AS CONTAINED IN THE OLD ACT 2004

  • Employers are required to take up Group Life Insurance policy on behalf of their employees for a minimum of three times the annual total emolument of the employee.
  • Employee is free to utilize the amount on their RSA for either programmed withdrawal or to purchase an annuity from an insurance company.
  • The ACT still allows employer with less than the minimum staff requirement (prescriptive 3 employees) and self-employed persons to participate in the pension scheme under separate guidelines issued by PenCom. However, the Act is silent on the applicability of the Scheme to private organizations with more than 3 but less than 15 employees.
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Court stops FRCN from regulating Private Companies

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The Federal High Court (“FHC”)  in Lagos on Friday, 21 March 2014 ruled in a case between Eko Hotels Limited and the Financial Reporting Council of Nigeria (“FRCN”) and held that the Financial Reporting Council of Nigeria (FRCN) lacked the statutory powers to regulate the activities of private firms in Nigeria. The FHC decided that under the FRCN Act, the FRCN cannot enlarge its regulatory powers to regulate private companies.

The main issues raised by Eko Hotels for determination by the FHC were:

  • Whether Eko Hotels is required to register with the FRCN under the FRCN Act 2011
  • Whether Eko Hotels is liable to pay the statutory and renewable annual dues to the FRCN for 2011 and 2012.
  • Whether Eko Hotels is required to furnish the FRCN with evidence of its statutory filing with the Corporate Affairs Commission and the Federal Inland Revenue Service.
  • Whether the FRCN could penalise it for failure to submit the annual returns and statements.

Eko Hotels sought a declaration from the court that the FRCN’s demand for registration was unlawful on the basis that Eko Hotels is not a public company or a public interest entity. It further sought the FHC to declare that the FRCN lacked the statutory power to demand for annual returns and financial statements of a private limited liability company among others.

Position of the FRCN: 

FRCN’s position was that Eko Hotels was expected to routinely file returns not only with the CAC or the FIRS but also with the Tourism Development Corporation (being the regulatory body responsible for the registration, classification and grading of all hospitality and tourism enterprises in Nigeria). The FRCN Act defines a public interest entity to include ‘unquoted’ entities which file returns with regulators other than the FIRS and the CAC. The FRCN also stated that one of the requirements for Eko Hotels to file its routine returns with the CAC was evidence of payment of its annual dues to FRCN.

Justice Okon Abang, who handed down the verdict, equally ruled that the FRCN lacked the legal backing to impose statutory renewal dues on private companies in Nigeria.

Justice Abang arrived at the conclusions while delivering judgment in a suit filed by Eko Hotels Limited, challenging the legality of an attempt by the FRCN to regulate its financial activities.

FRCN had written a letter to Eko Hotels Limited requesting registration and payment of statutory renewal dues. The FRCN had also requested the plaintiff (Eko Hotels Limited) to furnish it with evidence of statutory filings of annual report, financial report and statements at the Corporate Affairs Commission (CAC) and the Federal Inland Revenue Service (FIRS).

But in his judgment, Justice Abang held that from the careful interpretation of the Financial Reporting Council of Nigeria Act, there was no provision that empowers the agency to exercise disciplinary control over a private company.

“The section relied upon by the defendant (FRCN) relates only to an employee of the plaintiff and not the plaintiff as a corporate entity.
“The plaintiff is a private company and the shares are not quoted on the floor of the Nigerian Stock Exchange. By the clear provision of the FRCN Act, the plaintiff is exempted.

“The defendant (FRCN) can only regulate publicly-quoted companies and public interest entity. “Where a statute does not empower a statutory body to do certain things, such body cannot so act,” Justice Abang ruled.

The court thereafter nullified the letter written by FRCN to the plaintiff, and also awarded N40,000 as cost in favour of the plaintiff (EKO Hotel) against the defendant.

CONCLUSION THAT COULD BE DRAWN FROM THIS COURT JUDGEMENT

This decision reiterates the scope of the FRCN’s authority in regulating companies in general in line with the provision of the enabling statute being the FRCN Act 2011. Based on the judgment, the FRCN does not have oversight functions over private companies. Attempts by the FRCN to bring a wider range of companies under its scrutiny and guidance are therefore open to challenge by any affected company on the basis of this decision.

The judgment suggests that the rules imposed in some industries requiring players in the industry to submit certain documentation or to pay certain registration fees does not translate to “filing of returns” as contemplated by the Act. Furthermore the mere fact that a company is popularly known to the public due to the nature of its services does not automatically make it a public interest entity.

On the basis of this judgment, private companies who only file returns routinely with the CAC and FIRS can carry on their business activities without the additional administrative burden of registration or payment of fees to the FRCN.

However, the Financial Reporting Council of Nigeria (FRC) has appealed  the verdict of the Lagos Federal High Court which restrained its powers to register and regulate companies in the country. The FRC also contended that the judgment did not take cognisance of the provisions of Section 77 of the FRC Act which defines a public interest entity as Governments, government organisations, quoted and unquoted companies and all other organisations which are required by law to file returns with regulatory authorities and this excludes private companies that routinely file returns only with the Corporate Affairs Commission and the Federal Inland Revenue Service.”

I shall keep you posted on the APPEAL DECISION.

Registration,forgery scandal rocks the Corporate Affairs Commision (CAC)

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The Corporate Affairs Commission (CAC) is enmeshed in a directorship registration and forgery scandal involving Gateway Estates Limited, a multi-billion naira firm. Two siblings, Mrs. Eunice Odirri and Mr. Sunny Esiso, children of the owner of the firm, the late Chief E.A. Esiso, and a lawyer, Mr. Wilfred Okoli, were allegedly arrested last week by the Special Fraud Unit (SFU) of the police in connection with the case.

The suspects were, however, said to have been released on bail while the SFU was alleged to be on the trail of their suspected collaborators in CAC. SFU sources said the suspects may be arraigned before a Magistrate Court in Warri, Delta State, this week on charges of fraud and forgery.

Founded by the late Esiso, Gateway Estates Limited has substantial real estate holdings across the country, particularly in Warri. The deceased and his wife, Mrs Iketiti Esiso, were registered as co-directors.

Esiso’s death in 2011, according to a petition by his first son, Y. Esiso, and upon which the SFU is acting, left the firm with one director. This threw up the need to appoint at least one more director to the company’s board.

The family, in the petition to the Commissioner of Police, SFU, Milverton Road, Ikoyi, dated February 15, 2014 headed to a Delta State High Court, sitting in Effurun, which granted Esiso’s first son and the eldest daughter as interim administrators of his estate.

The duo then approached the CAC to request that they be allowed to appoint new directors to the board of their father’s firm. This, the petition claimed, became necessary because the passing of their father had left the company with only one director, in contravention of the legal requirement of a minimum of two directors.

“The CAC rejected their request on the grounds that an order from a state court does not suffice to command the compliance of CAC. “CAC insisted that the duo must go to yet another court, this time the Federal High Court to get an order for an extraordinary general meeting.

“The strident objection of Barrister Ama Etuwewe, acting for the court appointed administrators to the illegality of this peremptory command, did not sway CAC from her flagrant contempt of an order of court,” the petition said.

This notwithstanding, the interim administrators reportedly instructed their counsel to approach the Federal High Court for the further order as insisted upon by the CAC.

“In January 2013, the Federal High Court, sitting in Abuja, granted the said order subsequent upon which an extra ordinary general meeting was summoned by the administrators at which resolutions were passed and adopted and a list of new board members nominated and forwarded to CAC,” the petition stated.

CAC was said to have made a U-turn and rejected the administrators’ list of directors mandated by the Federal High Court order. The petition alleged: “When pressed, they refused to give reasons for their second, more egregious contempt of court but a quick perusal of the files of CAC revealed that while CAC was sending the administrators on a wild goose chase for more court orders, they had proceeded with the acceptance of a list of directors from one Barrister Wilfred Okoli of C84, Banex Plaza, Wuse 11, acting for the duo of Mrs. Eunice Oddiri and Mr. Sunny Esiso, siblings and the fifth and sixth children of the late Chief Esiso.

“Ostensibly, CAC accepted the list from the duo on the basis of a form purported to be signed by the sole surviving director, Mrs. Iketiti Esiso and one Mr. Anthony Chikwendu, who had acted as Company Secretary at the time of formation of Gate Way Estates Ltd. in March 1973, 41 years ago.”

‘What the parties did not know is that the interim administrators had made spirited efforts to locate Mr. Anthony Chikwendu many years prior and had established the fact that he had been deceased for over a decade and had consequently proceeded to the court option for the summoning of an extraordinary general meeting’

A family source said: “When the name of Mr. Anthony Chikwendu was appended to the April 2013 form and when, on examination, it was discovered that the name was incorrectly spelt and the affixed signature suspected to be forgery, the case was reported to the Special Fraud Unit of the police.”

 

Did you know that bribes were once tax deductible as cost of doing business?

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For those of us who have had an interest in corruption for much of our careers, there is little doubt that sometime in the late 1980s and early 1990s there was a shift in thinking within the development community about the role of corruption in the development process. The shift was tentative at first; continued reluctance to touch upon a subject that was seen to have a large political dimension coexisted for a while with increasing references to the importance of “good governance” in encouraging successful development.

What were the factors that contributed to this shift?

One that quickly comes to mind is linked to the falling of the Berlin Wall and the associated collapse of central planning as a supposedly viable alternative to the free market. It was obvious that it was not inappropriate monetary policies that led to the collapse of central planning but rather widespread institutional failings, including a lethal mix of authoritarianism (i.e., lack of accountability) and corruption.

The collapse of central planning in the late 1980s and the need for the international community to assist these countries in making a successful transition to democratic forms of governance and economies based on market principles made it glaringly clear that it would take far more to do so than “getting inflation right” or reducing the budget deficit. Literally overnight, the economics profession was forced to confront a much broader set of issues beyond conventional macroeconomic policy. Related to the demise of central planning, the end of the Cold War had clear cut implications for the willingness of the international community to turn a blind eye to glaring instances of corruption in places where ideological loyalties had led to episodes of collective blindness. By the late 1980s, for instance, Mobutu was cut off by the donor community, no longer willing to quietly reward him for his persistent loyalty to the West during the Cold War.

A second factor was growing frustration with the plight of people in Africa and other parts of the developing world. Gains in the global fight against poverty had begun to bear some fruit but these were largely concentrated in China, with Africa actually seeing further increases in the number of poor.

A third factor had to do with developments in the academic community. In particular, research on the importance of property rights, education and training, and institutions, including some empirical work which began to suggest that differences in institutions appeared to explain an important share of the growth differential between countries, and therefore have an influence upon countries’ growth performance. (For a nice survey see, for instance, Acemoglu et. al., “Institutions as the Fundamental Cause of Long-Run Growth”, in Handbook of Economic Growth, Elsevier, 2004).  For a growing number of economists corruption began to be seen as an economic issue and this led to a better understanding of the economic effects of corruption.

Also playing an important role was the intensification, beginning in the 1980s, of the pace of globalization. Globalization and its supporting technologies have clearly led to a remarkable increase in transparency and to people’s demand for openness and greater scrutiny. The multilateral organizations were not immune to these influences. How could one ignore or fail to see the stashing away of billions of dollars of ill-gotten wealth in secret bank accounts by the world’s worst autocrats, many of them long-standing clients of these organizations?

In parallel to these developments and further raising international public awareness of corruption, the 1990s witnessed a large number of scandals involving major political figures in some form of bribery or corruption.

In India and Pakistan the prime ministers were defeated largely because they were dogged by corruption charges. In South Korea two presidents were jailed following disclosures of bribery, while in Brazil and Venezuela bribery charges resulted in the presidents being impeached and removed from office. In Italy, Italian magistrates sent to jail a not insignificant number of the political class, who had ruled the country in the post-war period, and exposed the vast web of bribery that had bound together political parties and members of the business community.

There was less progress in Africa but, without question, corruption became harder to hide and the new technologies of communication proved a useful ally of increasing openness and transparency.

A related development pertains to changes in the global economy, which significantly boosted the perceived importance of productivity as a primary engine of prosperity. Globalization highlighted the importance of efficiency. Countries could not hope to maintain their presence in the global economy and compete in an increasingly complex marketplace, unless they used scarce resources effectively. And the prevalence of corruption definitely detracted from this. Furthermore, business leaders began to speak more forcefully about the need for a level-playing field and the costs associated with doing business in corruption-ridden environments.

In the 1990s the United States government made efforts to keep the issue of corruption alive in its discussion with OECD partners, further raising international awareness. The Foreign Corrupt Practices Act of 1977 had forbidden American businessmen and corporations from bribing foreign government officials, imposing stiff penalties, including prison terms, on those engaged in the paying of illegal bribes. Because other OECD countries were not subject to such restrictions—in fact, the payment of bribes continued to be tax deductible in most other OECD countries, as a cost of doing business abroad—American companies began to complain that they were losing business to OECD competitors. Academics sifting through the data showed that following passage of the Act, U.S. business activities abroad declined substantially, as the Act had actually helped to undermine the competitive position of American firms. These developments gave considerable impetus to U.S. government efforts to persuade other OECD members to ban bribery practices and in 1997 the OECD adopted the Anti-Bribery Convention, an important legal achievement.

Also contributing to this shift in attitude was the work of Transparency International (TI) and the publication, beginning in 1993, of its now well-known Corruption Perceptions Index (CPI). That corruption existed everywhere was a well-known fact. What TI showed was that some countries had been more successful than others in curtailing it. The work of TI helped greatly to focus public attention on the issue of corruption and contributed to legitimizing public discourse on issues of corruption and thus eased the transition by the multilateral organizations into doing the same.

Transparency International was soon assisted in its efforts by the international organizations themselves. At the IMF/World Bank meeting in 1996 the Bank president, James Wolfensohn, gave a speech in which he did not mince words, saying that there was a collective responsibility to deal with “the cancer of corruption.” More important, Mr. Wolfensohn gave strong backing to Bank staff efforts to develop a broad range of governance indicators, including those specifically capturing the extent of corruption. This was an extremely important development because it made it possible for the Bank, through the use of quantified indicators and data, to focus attention on issues of governance and corruption while at the same time not appearing to interfere in the political affairs of its members.

SUBMITTED BY AUGUSTO LOPEZ-CLAROS