Home BUSINESS Zenith bank alleged $64 million fraud: NGO fingers NDIC of connivance

Zenith bank alleged $64 million fraud: NGO fingers NDIC of connivance

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An Abuja based Non-Governmental Organisation, (NGO)

Empowerment for Unemployed Youth Initiative (EUYI) has

accused the Nigeria Deposit Insurance Corporation (NDIC) of

possible connivance in an alleged $64 Million Dollars fraud

perpetrated by Zenith bank Plc against an unsuspecting

customer, Messrs Obigs and Owigs Nigeria Limited.

National Coordinator of the body, Comrade Solomon Adodo

spoke with newsmen in Abuja at the weekend expressed worry

over what he described as unwarranted delay by the Nigeria

Deposit Insurance Corporation (NDIC) in conducting investigation

into the case more than three years after the matter was brought

to its attention.

He said his organization had petitioned the regulatory body over

the matter since 2015 and got assurance that it would conduct

thorough investigation into case in collaboration with the Central

Bank of Nigeria (CBN) for more than three years now, NDIC has

seemingly swept the fraud case under the carpet for no reason.

Comrade Adodo revealed “that following a petition I sent to the

Managing Director of NDIC on December 3, 2015 with the

caption, “contravention of banking rules and depositor

exploitation: need for urgent clarification and request for swift

intervention”, Nigeria Deposit Insurance Corporation had

promised to investigate this case of $64 million dollars Zenith

bank fraud in collaboration with the Central Bank of Nigeria (CBN)

which I also copied in the petition.

“The response to my earlier petition by NDIC, which was

endorsed by one Mrs A C. Onyewere of the Bank examination

 

unit, dated January 6, 2016, with ref. NDIC/BEU/7/VOL.8: reads

in part: “while we are working on your petition, kindly be assured

of our rules and responsibilities towards depositors’ confidence

and customer protection. We noted the fact that you have copied

your letters to the CBN among others. We would therefore

collaborate with the CBN on investigating the matter”.

However, investigation revealed that the NDIC has not come up

with any report on the fraud allegation more than three years after

making the promise to investigate the matter in collaboration with

apex regulatory financial institution, CBN.

Recall that the Managing Director of Owigs and Obigs, Emeka

Okorie, had also dragged Zenith Bank before the Central Bank of

Nigeria, CBN, over unethical conduct which resulted in the

termination of a foreign business transaction worth

over $64 million, involving a Chinese firm, King-Tan Tantalum

Industry.

Okorie is asking the apex bank for clarification on the validity of

letters of credit issued by the Industrial and Commercial Bank of

China, ICBC, to his company, Owigs and Obigs, through Zenith

bank.

In a representation to the CBN dated January 30, 2019 the

aggrieved businessman is seeking answers to questions

bothering on banking protocol, customer relations and applicable

rules of international trade policy.

The petitioner wants CBN to confirm if the said letters of credit

issued by ICBC LC Nos. 456011400024 and 365991400013 were

actually unconfirmed irrevocable letters of credit, not issued

based on the approved draft copy of Zenith bank.

 

“In 2014, our company was issued two Irrevocable Confirmed

Letters of Credit by ICBC for a contract to supply tin, columbite

and tantalite valued at $64,107,180.00, having relied on Zenith

bank for guide in international trade documentation as our firm

being the first exporter, was naive.

“Instead of confirming the letters of credit, the bank rather

cancelled and rejected them. This is not a general enquiry, but a

specific enquiry dealing with specific issues that require specific

answers for avoidance of further occurrence of issues as we pray

that our cry and yelling for guide and direction may really touch

your heart as our shrieking voice may start fading away if you do

not attend to us speedily.

“It became exigent that we seek CBN’s timely advice/clarification

on issuance of Confirmed Irrevocable Letter of Credit (LC) and to

help our company identify the internationally acceptable standard,

according to the Uniform Custom Practice (UCP latest version) as

specified in the letters of (LC No: 456011400024, LC No:

365991400013).

“Zenith bank assured our firm that ICBC had agreed to abide by

the new rules to transfer the fund to them and that we should get

our shipment ready as ICBC reissues the LC accordingly”, Okorie

explained.

He claimed that bank, after receiving the two letters of credit

cancelled and subsequently rejected them on the grounds that the

issuance did not comply with the approved standard by the bank.

Banking supervision is an essential function of the Nigeria deposit

insurance scheme as it seeks to reduce the potential risk of failure

and ensures that unsafe and unsound banking practices do not

go unchecked.

All attempts to get reaction from NDIC proved abortive as officials

declined to speak on the matter.

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