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Debt Securities

DMO reacts to alleged N1.08 billion corruption scandal rocking the agency

The DMO pointed out that the story referred to documents that are incomplete and do not reflect the whole story.

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The Debt Management Office (DMO) has reacted to the alleged N1.08 billion corruption scandal that has been making the round in the news media.

In its reaction, the DMO, while denying the allegation, described the story in a Vanguard report as false and full of lies. It also stated that the documents referred to in the report have been twisted and distorted with the intention to misinform the general public and discredit the institution.

The disclosure was made in a public statement that was issued by the DMO on August 22, 2020, and can be seen on its website.

READ MORE: FG responsible for 80% of Nigeria’s N25.7 trillion debt profile

The statement from the DMO reads, ‘’The attention of the Debt Management Office (DMO) has been drawn to a report in the Vanguard of Saturday, August 22, 2020, titled, Alleged N1.08bn corruption scandal hits DMO.’’

‘’The DMO hereby states unequivocally that the story is false, full of lies and the documents referred to in the Vanguard’s report have been twisted and distorted with the intention to misinform the general public and discredit the institution. The Vanguard story is not a true representation of the dealings in the DMO.’

The DMO noted that it is an accountable, transparent and responsible organization that works in accordance with laid down civil service procedures and is highly regarded by Multilateral Agencies and financial institutions as a reputable government agency.

The DMO described the sponsors of the story are disgruntled elements who have not only breached the Civil Service Rules but have also contravened laid down procedures for dealing with official matters.

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The agency said that the officials have resorted to illegally leaking official documents due to their recent redeployment and have colluded with other disgruntled persons who have failed in their attempts to control the running of the affairs of the DMO, which has blocked their ability to steal public funds.

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READ: FGN Bonds record first undersubscription in 2 years

The DMO pointed out that the story that was making round referred to documents that are incomplete and do not reflect the whole story or the purpose of any transaction. They said that the claims that events and travels by officials of the DMO either did not take place or did not hold are false and an attempt to discredit the impeccable records of the organization and also a desperate attempt to give the institution a bad name.

They described as unfortunate a situation where a reputable news medium such as Vanguard would lower its guard by allowing its platform to be used to promote falsehood by disgruntled and fraudulent elements in the DMO without cross-checking with the management of the organization.

READ: BOOM: Nigeria’s total debt portfolio hits at N27.4 Trillion

Stanbic 728 x 90

The DMO revealed that in line with laid down Civil Service Regulations, they will brief relevant security agencies in the country to thoroughly investigate the sources of the documents, on which the sponsors based their story, with a view to bringing the perpetrators to book in line with Public Service Rules No. 030401 and 030402 which prescribes dismissal for unauthorized disclosure of official information as a serious act of misconduct.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Debt Securities

MTN invests N121 billion in fixed deposits, treasury bills, etc

MTN Nigeria invested a whopping N121.5 billion in bonds, treasury bills and foreign currency deposits in 2020.

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Nigeria’s largest telecommunications company, MTN Nigeria invested a whopping N121.5 billion in bonds, treasury bills and foreign currency deposits in 2020. This compares to just N9 billion in 2019 suggesting the GSM giant had challenges deploying the capital raised during the year.

MTN raised N143.96 billion in several syndicated facilities during the year which was to be utilized for its network expansion plans. However, the Covid-19 induced lockdowns affected capex activities forcing most companies to freeze spending on anything that is capital intensive. Effective Interest Rates for most of the loans obtained by MTN range between 3.5% and N5.8% per annum.

From the breakdown seen by Nairametrics, MTN invested N93 billion in naira denominated fixed deposits, equivalent of N19 billion in US dollar deposits and another N34.8 billion in treasury bills. The total amount invested earned MTN about N15.84 billion in income which it used to offset its finance cost of over N129 billion.

Why it matters

Interest rates for risk-free government securities fell drastically in 2020 as investment outlets dried up locally. This triggered a massive influx of money into the stock market helping it to close above 50%, one of the best performing in the world last year.

  • For companies like MTN with a significant cash hoard, treasury operations are a significant part of the activities of its finance department.
  • The investments in risk-free treasury bills despite the negative real return (when interest rate is adjusted for inflation) suggest corporates will rather fix their money in treasury bills than leave it idle in commercial banks.
  • It also suggests corporates like MTN are more favourably disposed to lending to the government despite Nigeria’s ballooning public debt and its attendant risk to its credit ratings.
  • Despite the investments, MTN still closed the year with about N275 billion cash in its balance sheet.

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Debt Securities

Emzor Pharmaceuticals accesses capital markets for the first time, lists N13.7bn Bond on NGX

Emzor Pharmaceutical Industries Limited, has listed its N13.7bn 5-Years Series 1 Bond exclusively on NGX.

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Wholly-owned, indigenous pharmaceutical manufacturing group, Emzor Pharmaceutical Industries Limited, has listed its N13.7 billion 5-Years Series 1 Bond exclusively on the Nigerian Stock Exchange Limited “NGX” Platform.

Information contained in a statement published on the NGX website revealed that the N13.7Bn 5-Years Series 1 Senior Unsecured Fixed Rate Bond due by 2026, under the company’s N50 billion Debt Issuance Programme, is the first public instrument listed by the Nigerian pharmaceutical group.

Why this matters

In line with the objective of the NGX Group, Emzor capitalized on the robust size of the Nigerian Capital Market to bridge funding gaps and restructure its existing debt profile, through its N50 billion Debt Issuance Programme.

Details of the transaction revealed that Emzor was able to access the domestic debt capital markets for the first time and raise 5 years of financing in local currency using a corporate bond, with the issuance of its N13.73 billion 5-Year 10% Series 1 Senior Unsecured Fixed Rate Bond.

READ: This woman turned her little pharmacy shop into one of the biggest Pharmaceutical companies in Nigeria

The proceeds from the bond initiated by Emzor Pharma Funding SPV Plc, a special purpose vehicle set up to finance Emzor’s funding requirements, will be used to finance the purchase of notes and other debt securities issued by Emzor, in accordance with the terms of the Master Notes Purchase Agreement (the “MNPA”).

The N13.73 billion Series 1 Unsecured Bonds accorded with an ‘A-’ credit rating by Global Credit Rating Co., was undersubscribed by 8.47% as the intended capital was pegged at N15 billion.

READ: Dangote Cement, MTN, Nigerian Breweries, 9 others raise N478.4 billion from commercial papers

What you should know

  • Emzor Pharmaceutical Industries Limited is a renowned manufacturer of quality pharmaceutical products and medical consumables. The company has grown its product portfolio from a modest four products in 1987, to more than 120 different products in recent times.
  • The company has a wide range of products in the analgesic, anti-malaria, vitamin/haematinics/multivitamin supplement, anti-helmintic, antibiotics and therapeutic categories.

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