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Business News

UPDATED: Court rules ICAN members do not need CITN license to file tax returns

The suit, which was filed some years ago by CITN, was basically struck out for lacking merit.

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ICAN

Justice S. A. Onigbanjo of the High Court of Lagos State has ruled that members of the Institute of Chartered Accountants of Nigeria (ICAN) do not need to be licensed by the Chartered Institute of Taxation of Nigeria (CITN) before they can file tax returns.

The ruling on July 2nd followed a suit filed by CITN trying to restrain ICAN members from filing tax returns for their clients unless they have a practicing CITN license.

A notice to ICAN members regarding this development, as seen by Nairametrics, noted that Justice Onigbanjo struck out the suit after describing it as “an abuse of court process and an embarrassment to the judiciary.”

The backstory: Nairametrics understands that the disagreement between ICAN and CITN stemmed from the misinterpretation of a 2015 Memorandum of Understanding (MoU) and Terms of Settlement (ToS) between the two organisations. Consequently, CITN had filed a suit before the High Court of Lagos State, seeking the following:

  • A declaration that the Memorandum of Understanding and Terms of Service both dated February 12, 2015 between the CITN and ICAN are valid, subsisting, and binding on the CITN and ICAN.
  • An injunction restraining ICAN whether by its agents, privies, assigns, or whosoever called, from repudiating, resiling from or acting in any manner or doing anything that is inconsistent with, contrary to or is a violation of the Memorandum of Understanding and the Terms of Settlement dated February 12, 2015, between the CITN and ICAN.
  • Determine whether the Memorandum of Understanding and Terms of Settlement both dated February 12, 2015 between the CITN and ICAN are valid, subsisting, and binding on CITN and the ICAN.

However, last week’s ruling by Justice S. A. Onigbanjo which, by the way, was delivered virtually due to COVID-19, has made it impossible for the CITN to implement the terms of the 2015 MoU and ToS. The ruling also aligned with ICAN’s earlier objection to the MoU and ToS.

The status quo: In view of this development, ICAN has informed its members that they do not need to obtain any license from the CITN before they can file tax returns for their clients with the Federal Inland Revenue Service, FIRS.

ICAN members were also informed that an earlier ruling by the Federal High Court on the case does not affect the status quo. This is because “the earlier ruling by the Federal High Court in Suit No. FHC/L/CS/125/2019 did not make pronouncement on the memorandum and terms of settlement between ICAN and CITN.” More so, regulation 5 of the FIRS Act was not reflected in the earlier judgment of the Federal High Court.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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    Business News

    NAICOM revokes operational licence of UNIC Insurance, appoints Receiver/Liquidator

    NAICOM stated that it had appointed Hadiza Baba Gimba as the Receiver/Liquidator to wind up the affairs of the company.

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    Recapitalisation: 26 firms get NAICOM's approval

    The National Insurance Commission (NAICOM) on Wednesday announced the withdrawal of the operational licence issued to UNIC Insurance Plc.

    Although no official reason has been provided for the revocation of the insurance firm’s operating license, NAICOM, however, stated that the decision of the regulator was in the exercise of the powers conferred on it by the enabling laws.

    According to a report from the News Agency of Nigeria (NAN), this disclosure is contained in a notice which was issued by the commission in Lagos to the general public and policyholders, where it noted that the revocation of the operational license, RIC 043, is with effect from March 25.

    NAICOM, thereafter stated that it had appointed Hadiza Baba Gimba as the Receiver/Liquidator to wind up the affairs of the company.

    NAICOM in its statement said, “The general public/policyholders are by this notice required to direct all inquiries and correspondence regarding UNIC Insurance to the receiver/liquidator.

    The receiver/liquidator will be dealing with the company’s liabilities in accordance with the provision of Insurance Act 2003.’’

    What you should know

    • It can be recalled that NAICOM, for the third time in June 2020, gave insurance firms in the country a one-year extension to meet the recapitalisation obligation that was recently set for them apparently due to the coronavirus pandemic which had disrupted the activities of most insurance companies.
    • Some insurance companies had been going through some bad patches with a good number of them struggling to meet up with their obligations and the recapitalization requirements.
    • The recapitalisation programme requires life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.
    • The regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.

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    Corporate Press Releases

    Shareholders applaud FCMB, approve dividend of N2.97bn at AGM

    The virtual meeting is also in accordance with Section 254 of the Companies and Allied Matters Act 2020 and as approved by the CAC.

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    Shareholders of FCMB Group Plc (www.fcmbgroup.com) have restated their confidence in the financial institution to sustain its impressive performance and deliver more value. The shareholders gave the commendation at the 8th Annual General Meeting (AGM) of the Group held on April 21, 2021 at its corporate head office in Lagos. They also unanimously approved the payment of a dividend of N2.97 billion, translating to 15 kobo per ordinary share for the year ended December 31, 2020, as against 14 kobo per share the previous year.

    The AGM was held virtually due to the prevailing COVID-19 (coronavirus) pandemic and streamed live via www.fcmb.com/AGM to shareholders of the financial institution. This is in conformity with government’s directives on physical distancing and the restriction on maximum number of people at every gathering due to the COVID-19 pandemic. The virtual meeting is also in accordance with Section 254 of the Companies and Allied Matters Act 2020 and as approved by the Corporate Affairs Commission.

    FCMB Group is a holding company divided along three business groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Corporate & Investment Banking (The Corporate Banking Division of the Bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited) and Investment Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

    The Chairman of FCMB Group, Mr. Oladipupo Jadesimi, along with the Group Chief Executive, Mr. Ladi Balogun; Company Secretary/General Counsel, Mrs. Funmi Adedibu; a Director of the Group, Mrs. Olapeju Sofowora; Executive Director, Corporate Banking & Investment Banking of the Group, Mr. Olufemi Badeji, representatives of the Central Bank of Nigeria, Securities and Exchange Commission as well as leaders of shareholder Associations, were present at the meeting.

    Speaking at the AGM, the Co-ordinator of Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, praised the institution for efficiently running its affairs and the appreciable growth recorded in key operating areas.

    According to him, “FCMB is a great institution and we are glad that its value is growing. The fact that it has been able to meet all its financial obligations to its creditors is a very good sign of strength. It also shows the seriousness of the management to remain worthy of doing business with. From the results, it is clear that the management has done its best to grow all the subsidiaries, thereby contributing significantly to profit and the overall performance of the Group. We appreciate the results and dividends declared by FCMB, while looking forward to many more years of prosperity”.

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    Also commenting, the National Co-ordinator of Pragmatic Shareholders Association of Nigeria Mrs. Bisi Bakare, stated that, “we are impressed by the digital transformation drive of FCMB which has impacted positively on customer service and financial inclusion. We commend FCMB for the introduction of paperless and cardless transactions at branches and other touch points. We are also happy that the Bank intervened to support the government and Nigerians to ease the problems caused by COVID-19 through various support. It is also a thing of joy to see the Bank carrying out several activities to grow businesses and empower Nigerians, especially youths. The 2020 results are a welcome development”.

    The National Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said, “FCMB as a Group has done so well over the years in every aspect of business. The institution is growing rapidly with branches all over the country. It is also performing well in terms of innovation, technology and customer service. Profit and dividend are rapidly increasing going by the 2020 financial results. The dividend payment of 15k to shareholders is a very good one in the midst of the difficult situation caused by the COVID-19 pandemic. Overall, FCMB Group has done excellently well and we are optimistic of a brighter future”.

    Presenting the report for the year ended December 31, 2020, the Chairman, Mr. Jadesimi, assured that FCMB Group is well-positioned to continue to succeed in the years to come, even in the face of the COVID-19 pandemic. He attributed the optimism to the decisions that the financial institution has made over the past few years, especially those around leveraging new digital technology, to expand access to financial transactions.

    According to him, ‘’the Board of Directors has adopted a policy that seeks to provide investors with a stable and sustainable form of capital distribution, with consideration given to the growth and capital requirements of the business, thereby maximising long-term share value for shareholders’’.

    Stanbic 728 x 90

    On his part, the Group Chief Executive of FCMB Group Plc, Mr. Ladi Balogun, reported that in spite of the challenging macroeconomic environment, the Group grew profit after tax by 13.4% to N19.7billion. He added that this increase had a direct correlation with earnings per share, which grew from 87 kobo in 2019 to 98 kobo in 2020, while return on average equity also rose to 9.2% from 9%.

    He stated that, “our businesses continue to improve with growth in other key indicators, such as loans and advances 14.9% and total assets 23.4%. Customer deposits grew by 33.3% to over N1.2 trillion with a large portion of the growth coming from current and savings accounts. Our customer base in the Group also increased from 6.8 million to 8.3 million. Our investment management businesses increased their assets by 23% to almost N500 billion at the end of the year’’.

    Mr. Balogun further reported that, “across the Group, our digital transformation gathered momentum, with the total number of internet banking growing by 43% to 6.6 million. Transaction volumes from mobile banking (App and USSD) grew by 74% in 2020. Our digital loans grew from N14.5 billion in 2019 to N54.6 billion at the end of 2020. Innovation and efficiency gains will be the key pillars on which we seek to raise our game in the near future. We expect that in 2021, we will continue with the strides we have made with our digital initiatives, as our technology platforms and products continue to contribute to our performance and competitiveness. We will remain resilient and innovative in charting new avenues for growth. We will also remain committed to elevating the quality of life of all our stakeholders’’.

    Speaking on the response of FCMB Group to the challenges of COVID-19, he disclosed that the financial institution contributed immensely to the efforts at combating the spread of the pandemic and alleviating the pains of the most vulnerable members of the society by donating N250 million to the CACOVID initiative.

    The Group Chief Executive added that, “we also supported state governments across the country to provide testing, palliatives, various medical items, including Personal Protective Equipment and ambulances to assist them effectively equip and secure health workers. We also provided catalytic support for givefood.ng. Through this initiative, one million vulnerable Nigerians had access to meals during the height of the government lockdown’’.

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    FCMB Group and its subsidiaries have consistently proved their mettle as resilient institutions with significant improvement on all financial fundamentals over the years.

    Among other results for the year 2020, the Group’s gross revenue increased to N199.4 billion, a 10% increase from N181.3 billion achieved in 2019. The results also showed enhanced customers confidence in FCMB, as deposits grew by 33% to N1.3trillion from N943.1billion in the previous year. Loans and advances surged by 15% to N822.8 billion as at December 2020. Total assets of the Group increased by 23% to N2.06 trillion last year. Moreover, FCMB Group’s net interest income was up by 20% to N90.8 billion for the full year 2020 from N76.0 billion in 2019. Non-interest income equally increased to N37.8 billion, representing a 9% growth, as against N34.8 billion prior year. The Group’s Assets Under Management (AUM) also sustained its growth trajectory by rising to N495.2 billion for the year ended December 2020, up by 23%.

    Similarly, capital adequacy ratio remained stable at 17.7% for the retail and commercial banking subsidiary of the Group (that is, First City Monument Bank). The capital adequacy ratio of 17.7% is above the benchmark set by the Central Bank of Nigeria for deposit money Banks in the country. Liquidity ratio of the Bank stood at 34.2% as at the end of the financial year 2020, indicating that the financial institution is in a very healthy position. Non-performing loans to total loans ratio stood at a modest 3.3%.

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    Analysts have already expressed broadly positive views on FCMB’s 2020 financial results. An analyst described it as, “very encouraging”.

    A financial expert stated that, “the 2020 results of the Group is a clear indication that the business is on a stronger pedestal with capacity to deliver more value to shareholders, the market and other stakeholders”.

    FCMB Group is a frontline financial services institution in Nigeria with subsidiaries that are market leaders in their respective segments. Having successfully transformed to a retail banking and wealth management-led group, FCMB has continued to distinguish itself through innovation and the delivery of exceptional services.

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