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First Bank defrauds customer N3.5bn • Faces CBN sanctions

Bisi Onasanya

DETAILED information has emerged on how one of Nigeria’s oldest, biggest and respected banks, First Bank of Nigeria (FBN), allegedly engaged in fraudulent financial manipulations of the accounts of one of its key customers leading to the stealing of huge sums of money from the same customer totalling about N3.5 billion (Three billion and five hundred million Naira only) using technical jargons.
The bank, according to our source, invented a term it called “Commercial Paper Charges” and “Excess Charges” which it used fraudulently to debit the said customer’s account with over N3.5 billion. According to our source, the alleged fraud was perpetrated by the instrumentality of arcane terms or terminologies that are alien to the world of finance.
According to impeccable sources, this was a clear case of the pot calling the kettle black as the complainant ended up being the accused. FBN had, in a report to the Police, made allegations of money-laundering, stealing, and funds diversion against Advanced Logistics and Procurement Services Limited and its directors. While the Police was looking into the report from the Bank, a counter-petition by Advanced Logistics and Procurement Services was written against FBN and some of its directors. This petition obviously provided a twist to the whole scenario as it contained very disturbing facts that prompted the investigators to review all facts before them.
According to Police investigations, Advanced Logistics and Procurement Services Limited (ALPS) has been a customer of First Bank Plc since 2005, and enjoyed various facilities with the bank for its operations which include importation and logistics. As part of the services FBN offers, the company obtains purchase orders from their various customers and their consent to domicile supply proceeds with First Bank Plc. The bank, on its part, would open letters of credit to finance the importation and ensured the goods are delivered to the customers at the right time. This relationship was running smoothly until the two parties had a disagreement in 2010 which led to the petition and counter- petition.
First Bank Plc had, in its petition against the management and directors of Advanced Logistics and Procurement Services including Messrs. Nicholas Yabeck, Mario Bou Harb and Roland Moubarack, alleged criminal conspiracies and unlawful conversion of depositors’ funds, claiming that for the various facilities totaling N6.05 billion it granted ALPS, it took the following collaterals to secure them: first, were the personal guarantees of the managing partners of ALPS; second, was the domiciliation of the contract proceeds of financed imports and execution of promisory notes.
According to the Bank, however, Advanced Logistics is presently indebted to it to the tune of N3, 736, 346, 344.73 including obligations on letters of credit (LC) and interest as at March, 2013. It also stated that out of N2,940,000,000 declared by Advanced Logistics as outstanding receivables to its account with the bank and that the company only paid N1.2 billion to the account and diverted the balance N1.8billion to the directors’ personal accounts.
The Bank noted that it had information from reliable sources that the bulk of the facility sum was diverted to the customer’s foreign account in Lebanon and Europe. And that a review of the company’s account showed that funds were transferred to Goshen Bureau de Change Limited and diverted. It equally claimed that Advanced Logistics diverted some facility sum and contract proceeds running to about N3billion into its directors’ overseas accounts.
In a letter dated September 18, 2013, First Bank further alleged that another sum a totaling N3,125,259,323.00 was diverted by the company through another firm operating under the name and style of Regius Clearing Ltd. out of which a total of N2,829,161,150.00 was withdrawn for personal purposes through one Mr. Peters E. Umogbai, a staff of Advanced Logistics.
It equally alleged that Advanced Logistics used one Hassan A. Abass, another of its staff, Mr. Gbenga Majekodumi, Mr. Collins Nosa of Advanced Logistics, Mr. Charles Ifidon and Rollag Investment Ltd. as conduit pipes through which it transferred to Regius Clearing Ltd. and thereafter diverted by the directors of ALPS.
It further alleged that that there was another diversion of N1,794,222,725.00 through one Sunquest Nig. Ltd. through the following accounts, Sunquest Nig. Ltd., Stanbic IBTC Acct. No. 7200056546, Advanced Logistics  Access Bank Acct. No. 014001002322, Zenith Bank Acct. No. 6015802028  and its  GTBank Acct. No. 201121097110.
However, in its own petition, Advanced Logistics highlighted that it had had a very smooth relationship with First Bank since it started business with the Bank in 2002 until it had disagreements with the Bank in 2012. Describing the nature of the relationship between his company and First Bank, the Chairman/CEO of Advanced Logistics, Mr. Nicholas Yazbeck, said that his company only took recurring overdraft facilities and not loans as the bank had insinuated.
He noted that, contrary to claims by First Bank, all transactions done through Goshen Bureau de Change were legitimate and in furtherance of the business and were done through transfer and from their account and not from any loan. He claimed that instead, First Bank stole their monies amounting to N3.5 billion from fraudulent charges and ridiculous and discriminatory interest rates other than the agreed rates, an allegation which the Police have verified to be true. He also said that the bank charged to their account interest rates of 32 per cent in August 2007 as against the agreed interest rate of 15 per cent from August 2007 through to July 2008 and claimed that his company entered into an agreement with the bank on the percentage it would charge them as interest. To this end, they agreed that from August 2007 to July 2008, their transactions attracted a 15 per cent interest rate per annum. From July 2007 to January 2009, it would be 17 per cent per annum, from January 2009 to March 2010, it would be 20 per cent per annum and from March 2009 to April 2010, the rates would be 17.50 per annum.
However, the interest rate agreed by the bank on all facilities granted to the company from the beginning of April 2010 till the problems started was 10.5 per cent, but the company discovered that the interest that was charged to its account by the bank peaked at 864 per cent as at September 2011.
Our sources further disclosed that investigations revealed that, contrary to claims by First Bank, it was the bank that engaged in fraudulent practices by systematically and fraudulently debiting  one of Advanced Logistics accounts with N85,318,000.00 (Eighty Five Million, Three Hundred and Eighteen Thousand) Naira which it referred to as ‘excess charges’.
It also discovered through a letter dated 27 September, 2013, addressed to The Managing Partner, Wolvers Partners, the bank admitted to defrauding Advanced Logistics to the tune of N66,400,000.00 (sixty six million and four hundred thousand naira) which it also termed as excess charges.
The audit investigation which was carried out by the Chartered Accounting Firm of Olusola Adekanola found that First Bank fraudulently debited Advanced Logistics with the sum of Three Billion, Five Hundred and Seventy Eight Million, Three Hundred and Eighty Eight Thousand, Four Hundred and Sixteen Naira and Eight (N3,578,388,16.08), which it conveniently called “commercial paper charges”. The bank could tender the commercial papers for which the accounts were debited the whooping sum of N3.578 billion naira.
In addition, First Bank was equally found culpable of charging discriminatory interest rates on the company’s account that are far and above the agreed rates especially from April, 2010, where the interest rate from then upwards was fixed at 10.5 per cent and in excess of CBN approved ceiling.
According our findings, First Bank’s allegation that part of the outstanding receivables of N1.8 billion had been diverted into the personal accounts of the directors of the company were found to be untrue and baseless. Also, the bank was already in court and had obtained a mareva injunction, stopping Advanced Logistics from collecting the same receivables they alleged had been diverted by the company to its directors’ personal accounts overseas. It was discovered that the dynamics of the facilities required direct purchase and payment for goods from Advanced Logistics oversea customers by First Bank Plc by way of opening of Letters of Credit and did not permit disbursements of monies into the company’s accounts hence the allegations that part of the facilities were diverted is also baseless.
Sources close to the Police also noted that it (the Police) had not found any evidence so far of any personal accounts either in Nigeria or Europe or elsewhere in Lebanon of the directors of Advanced Logistics to which part of the facilities were diverted as First Bank has alleged and that the bank had not supplied such evidence hence the allegation of diverting the funds to the personal accounts of the directors is thus far baseless, and to say the least, diversionary.
Our sources disclosed that First Bank has been speculative without proof of how much, if there was actually anything, in monetary terms, that was diverted by the directors  of the company in question, saying that their first petition and subsequent ones are merely based on suspicion that Advanced Logistics might have committed an offence which they lacked evidence to substantiate.
Moreover, investigations found out that the same bank that alleged a diversion of N1.8 billion naira receivables by Advanced Logistics went to court and obtained an order stopping all the company’s debtors from further payments of same outstanding receivables to the company.
It was further gathered that the Banking Surveillance and Investigation Department of the Central Bank of Nigeria (CBN) is already aware of the allegations against the First bank and has commenced a private investigation into the case. National Daily Investigation revealed that a petition had been sent to the apex bank in the country but it was left unattended until the new leadership of the regulator of the banking industry. The petition was alleged to have been unattended to because of the relationship between the former CBN helmsman and the First Bank.
All efforts made to get the side of the Bank through its media department proved futile as the numbers were not going through as at the time of filing this report. Stay tuned for more mind-blowing updates.

 

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