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Supreme Court orders Conoil to pay N13.2 billion to Vitol S.A

Downstream petrol retailer, Conoil Plc, may end 2018 on a negative note, going by a recent judgment awarded against the firm.

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Mike Adenuga, Chairman, Board of Directors, Conoil Plc

Downstream petrol retailer, Conoil Plc, may end 2018 on a negative note, going by a recent judgment awarded against the firm.

In the company’s annual report for the 12 months ended December 2017, the downstream oil firm disclosed that a Supreme Court judgment had ordered it to pay the sum of N13.2 billion to Vitol S.A.  The case had dragged on in the legal system for close to 10 years before judgment was given by the Supreme Court.

Judgement was recently given against the Company in the earlier disclosed suit between Conoil Plc and its former suppliers of Automotive Gas Oil (AGO); Vitol S.A. The commercial dispute which arose in 2008 had been contested through the High Court and the Court of Appeal but was finally decided by the Supreme Court in the month of December 2017. The board has resolved that the judgement sum of $43,322,497.57 (N13.2 billion) should be shared between the Company and Synopsis Enterprises Limited and disbursement be made to the Judgment Creditor in the ratio of 85% (N11.2 billion) by the Conoil Plc
and 15% (N2 billion) by Synopsis Enterprises Limited. The reason for this being that Synopsis Enterprises Limited as a sister Company to Conoil Plc consummated the transaction on behalf of the Company that led to the commercial dispute

Why the judgment is a heavy blow

Conoil’s retained earnings as at December 31, 2017, amounted to N13,721,190,000. Deducting its share of the judgment (amounting to N11.2 billion) leaves the company with just N2,521,190,000 in its kitty. In the event of the second judgment sum of N4.3 billion being awarded against the firm, this would leave the company with negative retained earnings.

Companies with negative retained earnings are barred from paying dividends.

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The company’s auditors had also flagged the litigation and claims by suppliers as a key audit matter.

Good times continue

Despite the heavy judgment sum and another hanging like the sword of Damocles, Conoil intends paying shareholders dividends for the 2017 financial year. For the 2017 financial year, it has proposed a dividend of N2.00 per share amounting to N1,387, 904,000.

Poor corporate governance

While the terms of the agreement between Conoil Plc and Synopsis are unknown, it is puzzling that Conoil would bear the bulk of the judgement sum.  Conoil’s Chairman, Mike Adenuga, also has significant interests in Synopsis Enterprises Limited.

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One would have expected that the firm would have made some provision for the judgement as the case dragged through several courts.

Conoil’s late release of financial statements has become a tradition of some sort. The company’s financial statements for the 2017 financial year were submitted to the Nigerian Stock Exchange (NSE) on June 1, 2018.

2016 financial statements were uploaded to the NSE portal on June 21, 2017. Financial statements for the 2015 financial year were submitted on September 8, 2016. The firm is yet to release its financial statements for the first quarter ended March 2018, which other listed majors have since done.

Conoil closed at N32 on Thursday, during trading session on the Nigerian Stock Exchange (NSE). Year-to-date, the stock is down 14.29%.

About Conoil Plc

Conoil Plc (formerly National Oil and Chemical Marketing Plc) was incorporated in 1960 as a private limited liability company. The company was converted to a public company on August 21, 1991.

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In the year 2000, the Federal Government, through the Bureau of Public Enterprises (BPE) bought 40% of the issued ordinary shares of the company held by Shell Company of Nigeria (UK) Limited.

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Following the privatisation of the company, Conpetrol Limited acquired 60% of the issued shares of the company. Following a rights issue by the company in 2002, Conpetrol Limited now holds 74.4% of the issued capital, while members of the Nigerian public hold the remaining 25.6% stake in the company. Conpetrol Limited is ultimately controlled by Mike Adenuga.

The principal activities of the company are the marketing of refined petroleum products, manufacturing, and marketing of lubricants, household and liquefied petroleum gas for domestic and industrial use.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Coronavirus

COVID-19 Update in Nigeria

On the 24th of November 2020, 168 new confirmed cases and 1 death was recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 66,607 confirmed cases.

On the 24th of November 2020, 168 new confirmed cases and 1 death was recorded in Nigeria, having carried out a total daily test of 5,838 samples across the country.

To date, 66,607 cases have been confirmed, 62,311 cases have been discharged and 1,169 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 749,136 tests have been carried out as of November 24th, 2020 compared to 743,298 tests a day earlier.

COVID-19 Case Updates- 24th November 2020,

  • Total Number of Cases – 66,607
  • Total Number Discharged – 62,311
  • Total Deaths – 1,169
  • Total Tests Carried out – 749,136

According to the NCDC, the 168 new cases were reported from 10 states- FCT (61), Lagos (50), Kaduna (27), Oyo (12), Rivers (6), Katsina (5), Ogun (3), Kwara (2), Edo (1), Kano (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 23,018, followed by Abuja (6,576), Plateau (3,805), Oyo (3,715), Rivers (2,963), Kaduna (2,940), Edo (2,695), Ogun (2,156), Delta (1,823), Kano (1,777), Ondo (1,727), Enugu (1,332),  Kwara (1,095), Ebonyi (1,055), Katsina (1,012), Osun (945), Gombe (938). Abia (926), Bauchi (753), and Borno (745).

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Imo State has recorded 662  cases, Benue (493), Nasarawa (485), Bayelsa (445),  Ekiti (354), Jigawa (328), Akwa Ibom (319), Niger (296), Anambra (285), Adamawa (261), Sokoto (165), Taraba (157), Yobe (94), Kebbi (93), Cross River (90), Zamfara (79), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

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The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

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Hospitality & Travel

US imposes $15,000 visa bond on 15 African countries, others

The US has issued a visa rule requiring tourist and business travelers in some countries to pay a bond of up to $15,000 in addition to the visa fees.

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US imposes $15,000 visa bond on 15 African countries, others, Berger Paints' improved margins ride on the back of cost efficiency

The outgoing administration of US President, Donald Trump, on Monday, November 23, 2020, issued a new temporary visa rule that requires tourist and business travelers from 15 African countries and others to pay a bond of up to $15,000 in addition to the visa fees, which ranges from $16 to $300, in order to visit the United States.

According to TheCable, the US State Department said the visa bond pilot programme, expected to take effect from December 24 and end on June 24, 2021, is targeted at countries whose citizens have higher rates of overstaying B-2 visas for tourists and B-1 visas for business travelers.

READ: Update: No one will take our democracy away, not now, not ever- Biden

The Trump administration said the six-month pilot program aims to test the feasibility of collecting such bonds and will serve as a diplomatic deterrence to overstaying the visas. Hence, overstay places significant pressure on Department of Justice and Department of Homeland Security.

The visa bond rule will permit U.S. consular officers to request tourist and business travelers from countries whose nationals had an overstay rate of 10% and above in 2019 to pay a refundable bond of $5,000, $10,000, or $15,000.

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READ: COVID-19: IMF Chief predicts $345 billion financing gap in African countries 

The countries whose tourist and business travelers fall into this category and subjected to the bond requirements are 24 countries, including 15 African countries. While these nations had higher rates of overstays, they sent relatively fewer travelers to the United States.

The countries include Afghanistan, Angola, Bhutan, Burkina Faso, Burma, Burundi, Cape Verde, Chad, the Democratic Republic of the Congo (Kinshasa), Djibouti, Eritrea, the Gambia, Guinea-Bissau, Iran, Laos, Liberia, Libya, Mauritania, Papua New Guinea, Sao Tome and Principe, Sudan, Syria, and Yemen

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READ: Falling Oil prices: Nigeria’s Halloween reality

Nigerian travelers escaped paying the temporary visa rule, as their overall score was below the threshold of 10% and above overstaying rate.

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Economy & Politics

Senate approves issuance of N148bn promissory notes to Bayelsa, 4 others

Promissory notes worth N148,141,969,161.24 has been approved by the Senate as refund to Bayelsa, Cross River, Ondo, Osun and Rivers States

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Senate approves issuance of promissory notes worth N148 billion as a refund to five states

Promissory notes worth N148.141billion have been approved by the Senate as a refund to Bayelsa, Cross River, Ondo, Osun, and Rivers States for projects executed on behalf of the Federal Government.

The approval which was given by the Senate at the plenary on Tuesday, 24th November 2020, came after the presentation of a report by the Committee on Local and Foreign Debts, led by Senator Ordia Clifford (PDP-Edo).

READ: Banks to lose interest on petrol subsidy-induced loans

According to a news report by NAN, this is a go-ahead to the Federal Government, who had sought the approval of the Senate for issuance of promissory notes for a refund on federal projects executed by State governments.

The request was contained in a letter addressed to President of Senate, Dr. Ahmad Lawan by President Muhammadu Buhari, and read at plenary. The Senate referred the matter to the Committee on Local and Foreign Debts for further legislative input.

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(READ MORE: FG inaugurates steering committee on Covid-19 economic recovery)

Senator Ordia Clifford, while presenting the report of the committee, said the Permanent Secretary, Federal Ministry of Finance; Federal Commissioners of Finance and Works in the five states, had briefed the committee on details of the projects.

He said the Committee was presented with documents relating to the approvals of the Federal Government through the Federal Ministry of Works and Housing for the execution of the projects and certificates of completion, amongst other documents.

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READ: Boosting IGR; A necessity for states to avoid total dependence on FAAC allocations

At the plenary today, Senator Ordia moved the motion that the Senate approves the Committee’s recommendations by approving the issuance of the promissory notes to the State governments.

According to him, the amount due to the five states is N148.14billion.

  • Bayelsa was allotted N38.40billion
  • Cross River was allotted N18.39billion
  • Ondo was allotted N7.82billion
  • Osun was allotted N4.57billion
  • Rivers was allotted N78.95billion

What they are saying

The President of the Senate, Ahmad Lawan, disclosed that records showed PDP states had the highest refund, he said: “If you look at the list of states, only two are APC states and they have the least in terms of refund, this is fantastic and a mark of leadership by the Federal Government. This shows tolerance and leadership by this administration.”

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