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Auditor-General calls for NPA`s MD sanction over alleged N7.5 billion contract misappropriation

Auditor-General calls for NPA`s MD sanction over alleged N7.5 billion contract misappropriation

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Why FG is planning to audit Customs', FIRS' revenues
The Auditor-General, Anthony Ayine, has called for the probe of the management of the Nigerian Port Authority (NPA) over a irregularities observed in a N7.5billion contract for Shore Erosion Control Work at Akipelai, Ayakoro and Otuoke towns in Bayelsa State.
The anomaly was discovered by the Office of the Auditor-General for the Federation after an audit had been conducted into the account of the port authority.
Breakdown of the findings: According to findings by the Office of the Auditor-General for the Federation, the contract which was awarded through a letter with reference number, HQ/GME/CP/CON/R.16/067 dated 22nd March, 2012; with a 14-month completion period, disclosed that as of November 11, 2015, he said four payment certificates and an advance payment, totalling N4.24 billion, had been made to the contractor. The fund represents about 56.61 per cent of the contract amount.
It was learnt that a review of documents and the Bill of Quantities under Bill No. 1 (General) attached to the payments revealed that mobilisation fee of N1.12 billion paid to the contractor was supported by a conditional bank guarantee from Zenith Bank Plc with a validity period of 365 days.
It added that the guarantee, which expired on March 2, 2013, was contrary to the provisions of Section 35(1a) of the Public Procurement Act, 2007 and Financial Regulations 2933 ’i’ (2009) which provided for submission of an unconditional bank guarantee or insurance bond.
Irregularities in fund disbursement: Ayine stated that the contractor had failed to renew it with the balance of unrecovered advance payment standing at N539.45 million four-years after the expiration of the bank guarantee. Part of the findings included there was no evidence that vehicles were purchased, but it was stated that the sum of N19.5 million was paid for the purchase of three Toyota Hilux vehicles.
Also, he added that the sum of N13.5 million was provided as an annual running cost for the project vehicles, out of which N6.75 million was certified and paid to the contractor, but like the vehicles reportedly purchased, there was no evidence to show what the amount was used for.
He said, “The sum of N11.25m certified for compensation of properties to be affected by the project and paid in certificate No.3 had no records on how the money was utilised nor the beneficiaries involved.
“The sum of N12.5m provided for community relations was certified and paid vide certificate No. 3 with no supporting documents to validate the payment.
“The sum of N128m provided for insurance of the work and insurance against damages to persons and properties was certified and paid through certificate No. 3 with no evidence that any insurance policy was undertaken.”

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Overpayment of contractors: Part of the report highlighted how the contractors were overpaid. It was learnt that the value of work was pegged at N3.9 billion, but about N4.24 billion was paid to the contractor.
Despite the contractors earning N344.26 million more than the amount expected, the project was abandoned. “During the inspection of the project, it was revealed that the contractor had since abandoned the project site; and the duration of the project had since lapsed without approval for its extension,” he told Punch.

Patricia

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

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Financial Services

Zenith Bank and GTBank are considering paying interim dividends despite COVID-19

Analysts earlier predicted that banks may hold off on dividend payments as a way of cutting down on costs in view of COVID-19.

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Zenith Bank’s board of directors is set to meet on July 23rd, 2020 to consider the tier-1 bank’s audited financial statements for half-year 2020. The directors will also consider “the proposal for recommendation of interim dividend for shareholders,” said a notice that was sent by the company to the Nigerian Stock Exchange.

In a similar development, Guaranty Trust Bank Plc said in a statement to the NSE that “issues relating to half-year dividend may also be discussed” when its board of directors meet later this month.

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Zenith Bank and GTBank, which are two of the most profitable banks in Nigeria, have always paid interim dividends to their shareholders. However, analysts earlier predicted that many banks may hold off on dividend payments as a way of cutting down on costs, in view of COVID-19 and its attendant economic implications. It is, therefore, fascinating to see that Zenith Bank and GTBank are considering interim dividends nonetheless.

Elsewhere, banks around the world have either been warned not to pay dividends at all or to be careful with dividend payouts. In April, The Economic Times reported that the Reserve Bank of India advised Indian banks to suspend dividend payments in order to conserve their capital amid the pandemic. In a similar development, regulators in Europe also banned European banks from paying any dividend in 2020. In Australia, banks were advised to slash their dividend payouts. Meanwhile, over in North America, the US Federal Reserve announced in late June that it will temporarily restrict dividend payouts by some of the country’s biggest banks, the New York Times reported.

As Nairametrics had repeatedly reported, the COVID-19 pandemic is expected to adversely impact different sectors of the Nigerian economy, including the financial institutions. An earlier report by Nairametrics quoted Augusto & Co to have predicted how the pandemic would weaken Nigerian banks’ assets. An April report by PwC also highlighted some of the ways COVID-19 could impact Nigerian banks.

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In the meantime, the Banking Industry Risk Indicator (BIRI) in Nigeria stands at a score of 12.14 out of 100, according to a recent analysis by Fitch Solutions, as Nairametrics reported.


Do note that Zenith Bank Plc has declared a closed period for the trading in its stock starting from July 6th, 2020. The closed period will last until 24 hours after the company’s half-year 2020 financial report is released to the public. In the meantime, all persons with inside knowledge of Zenith Bank’s affairs shall be prohibited from buying and selling the company’s stock during the closed period. 

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Financial Services

GTBank declares closed period as directors meet July 22nd to consider H1 result

GTBank reported a net interest income of N64.28 billion in Q1 2020 as against N53.58 billion in Q1 2019.

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GTBank H1 2020 result

Guaranty Trust Bank Plc (GTBank) has declared a closed period ahead of the release of its audited half-year 2020 financial statements.

A corporate disclosure that was signed by the Company Secretary (Erhi Obebeduo) and sent to the Nigerian Stock Exchange said the closed period commenced on July 3rd, 2020. In line with the listing rules of the NSE, the closed period is expected to last until twenty-four hours after the bank’s financial statements have been released to the public.

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Note that the implication of the closed period is that all persons with insider knowledge of the company’s affairs are hereby prohibited from trading the company’s stock.

READ ALSO: Fidelity Bank announces closed period as it readies to release unaudited Q1 2020 result

Meanwhile, members of GTBank’s board of directors are scheduled to meet on July 22nd to consider the audited HI 2020 financial statements. A separate notice that was sent to the NSE said:

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“Pursuant to the post-listing requirements of the Nigerian Stock Exchange for quoted companies, Guaranty Trust Bank Plc hereby informs you that the board of directors of our bank is scheduled to meet on Wednesday, July 22, 2020, to consider the audited financial statement for the half-year ended June 30, 2020. Issues relating to half-year dividend may also be discussed at the meeting.”

The audited financial statements for half-year 2020 shall be sent to the Central Bank of Nigeria for approval prior to being made public through the Nigerian Stock Exchange.

READ ALSO: Analysis: GTB is minting profits but CBN is squeezing its cash.

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Recall that GTBank reported a net interest income of N64.28 billion in Q1 2020 as against N53.58 billion in Q1 2019. In the same vein, the tier-1 bank’s profit before tax grew by 2.1% to N58.2 billion, up from N57 billion in Q1 2019. Profit after tax also grew from N49.3 billion in Q1 2019 to N50 billion in Q1 2020.

GTBank closed last week’s trading on the Nigerian Stock Exchange with a share price of N20.80, according to trading reports seen by Nairametrics. Year to date, the stock has lost by more than -19%.

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Coronavirus

COVID-19: WHO stops hydroxychloroquine, HIV drugs trial after failure 

The WHO boss had earlier warned that the worst is yet to come from the coronavirus pandemic.

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Dr Tedros Adhanom, Head of the World health organization (WHO), COVID-19

The World Health Organization (WHO) has announced that it was going to abandon its trials of the malaria drug, hydroxychloroquine and combination of HIV drug, lopinavir/ritonavir on hospitalized patients that have coronavirus disease after they failed to reduce the death rate. 

This is a major setback for the WHO in the face of a second wave of the virus outbreak in US, China, Asia and some American countries. The United Nations (UN) health agency reported over 200,000 new cases of the disease globally, the first time in a single day. 

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According to a statement from the WHO, ‘’These interim trial results show that hydroxychloroquine and lopinavir/ritonavir produce little or no reduction in the mortality of hospitalized COVID-19 patients when compared to standard of care. Solidarity trial investigators will interrupt the trials with immediate effect.’’ 

READ ALSO: Nigeria’s ratings risk downgrade over rising debt and lower revenue

The WHO has hinged its decision on the recommendation of the trial’s international steering committee and does not affect other studies where those drugs are used for non-hospitalized patients. 

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Another aspect of the WHO-led trial is looking at the potential effect of Gilead’s antiviral drug remdesivir on COVID-19. The European Commission gave remdesivir a conditional approval for use on Friday after it was discovered that it helps reduce hospital recovery times. 

The trial which is led by WHO started with five branches looking at possible treatment approaches to coronavirus. They include, standard care, remdesivirhydroxychloroquinelopinavir/ritonavir, and lopanivir/ritonavir combined with interferon. 

The WHO Director-General, Tedros Adhanom Ghebreyesus, disclosed on Friday that almost 5,500 patients in 39 countries had been recruited into its clinical trials and that interim results were expected in the next two weeks. 

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There are about 18 experimental COVID-19 vaccines that are being tested on humans with almost 150 treatments under development. 

A top emergency expert from WHO, Mike Ryan, said it would not be wise to predict when a vaccine could be ready because while a vaccine candidate might show its effectiveness by the end of the year, the challenge might be how soon it could be mass-produced. 

READ MORE: Developing countries will pay less for COVID-19 drug – Gilead reveals 

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The WHO boss had a few days ago warned that the worst is yet to come from the coronavirus pandemic due to lack of global solidarity and the susceptibility of most people to the virus, which still has a lot of room to move. He stated that contact tracing of people that are infected with the virus is the most important step in fighting the coronavirus pandemic. 

The UN health agency had also revealed its plans with its partners to buy 2 billion doses of COVID-19 vaccines for the most vulnerable people across the globe. The plan projects that the doses of the COVID-19 vaccine will be distributed to countries with special priority on high-risk persons like people above 65 years, health care personnel and other adults with ailments like diabetes.  

 

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