REVEALED: Why CBN hammer fell on E-Tranzact directors

Facts have emerged on why the Central Bank of Nigeria (CBN) ordered the sack of E-Tranzact directors.

The Apex bank, asked the Chief Executive Officer, Valentine Obi, and two other executive directors, Sullivan Akala and Ike Ezeto vacate their seats.

• According to BusinessDay report, In 2012, Smartmicro Systems Limited had approached E-Tranzact for the deployment of a bulk purchase solution to facilitate payment of salaries of Delta State employee in Microfinance Bank.
• It was alleged that the company configured an additional outbound fund transfer solution which requires Smartmicro to maintain a pre-funded settlement account with a first generation bank for settlement.
• The first generation bank sometime in March 2018, revealed to E-Tranzact that the settlement account was in debit to the tune of N11 billion.
• The Economic and Financial Crimes Commission EFCC in April arrested Michael Obasuyi, Managing Director, Smartmicro Systems Limited, for alleged offenses bordering on cybercrime and money laundering.
• Obasuyi had earlier written a petition to the anti-graft agency in March 2018 against E-Tranzact. However, in a twist of events, E-Tranzact had also written a counter-petition against Smartmicro.
• Investigations by the anti-graft agency revealed Obasuyi had defrauded the bank to the tune of N11 billion using E-Tranzact’s platform.
• In addition, the apex bank has reportedly ordered Pricewaterhouse Coopers and Ernest and Young to conduct an audit of the firm’s accounts.

E-Tranzact in its recently released company’s results for the first quarter ended 31st March, 2018 show 17% increase in revenue from ₦2.8 billion in 2017 to ₦3.3 billion in 2018. Profit before tax, however, fell sharply from ₦190 million in 2017 to ₦91 million in. 2018. Profit after tax also dropped from ₦129 million in 2017 to ₦62 million in 2018.

E-Tranzact international was incorporated as a Private Limited Liability Company on the 7th of May 2003. It became a public limited liability company on the 7th of August 2009 and was quoted on the Nigerian Stock Exchange (NSE).

The majority shareholder of the company is Virgin Island-based eTranzact Global, with a 50.3% shareholding.E-Tranzact shares are currently trading flat on the Nigerian Stock Exchange at ₦4.55 with its one year return down by 7.14%.