Fraud:Court Gives CBN Nod To Freeze Accounts Of Fintechs

The Federal High Court, Abuja has granted the request of the Central Bank of Nigeria to freeze the accounts of some companies allegedly involved in fraudulent financial activities.

The request, granted by Justice Ahmed Mohammed, was filed by former Attorney-General of the Federation and Minister of Justice, Mr Michael Aondoakaa, SAN, on behalf of the CBN.

Some of the  companies include Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Tech. Ltd., CTL/Business Expenses and Trove Technologies Limited.

Others are: Chayomi Multi Services Limited, Ningbo Excel Enterprises Limited and Dagang Enterprises.

The court order, empowers the CBN to direct heads of Zenith Bank, Guarantee Trust Bank, Standard Chartered Bank, Access Bank and VFD Microfinance Bank to freeze forthwith all transactions on the 86 accounts on the list annexed to the CBN’s application and all other bank accounts of the defendants/respondents for a period of 180 days for the first set of defendants and 90 days for the second set.

Aondoakaa said  that some of the firms were owned by individuals and organisations based in the United States.

The accounts are to be frozen pending the outcome of investigation and inquiry currently being conducted by the CBN.

Aondoakaa said that the application was premised on the grounds that the firms were using the foreign exchange sourced from the Nigerian market to purchase foreign bonds/shares in contravention of its directive issued in July 2015.

The applicant also accused the firms of operating without licences as asset management companies, adding that the firms violated the CBN directive contained in its circular referenced TED/FEM/FPC/GEN/01/012 and dated July 1, 2015.

He also said that the forex deals by the defendants were undercutting the strength of the naira against the dollar.

He said there was the need to block 15 accounts of the first set of firms for 180 days to stop the firms from moving their funds out of Nigeria.

“We need to write the embassy, we need to go to the Foreign Affairs, the minister will serve the U.S. to seek assistance so that we can block these leakages,” he said.

In a short ruling, the judge granted the prayers saying the court was satisfied with the reasons given for the action.

He said that the defendants were at liberty to approach the court and ask that the order be vacated within the stipulated period.

He adjourned the matter until Feb. 20.

In an affidavit of facts deposed to by a senior supervisor of the CBN, Christiana Gyang, the apex bank said it had reviewed the activities of the defendants to determine their alleged involvement in illegal foreign exchange dealings.

She stated that investigation showed that the platforms were violating Nigeria’s trading laws including dealing in cryptocurrency in contravention of the CBN policy.

Concerning Rise Vest Technologies Limited, the affidavit stated that it was incorporated in Oct. 2019 with objects of technological and business consultancy.

” The company partners with companies involved in payments and settlements as well as internal and international remittances.”

The CBN also said Bamboo Systems Technology Limited was owned by US-based Bamboo Global LLC (99.99 per cent share).

“Further reviews showed that Bamboo Systems Technology Limited operates an online App, ‘Bamboo’, that provides a medium for investors to buy and sell stocks, exchange traded funds (ETFs), index funds and derivatives listed in major exchanges in the U.S.”

Gyang in her deposition said that the investigation being carried out concerned what had been discovered to be serious infractions by the defendants in connection with some foreign exchange transactions.

She also said the infractions included non-documentation by the defendants in violation of the extant laws and regulations, particularly the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the Central Bank of Nigeria Foreign Exchange Manual.

“That more specifically, there is a grave allegation that the defendants/respondents are engaged in illegal foreign exchange transactions, accessing/procuring of foreign exchange ‘via their banks from the Nigerian Foreign Exchange ‘Market via several bureaux de change, International Money Transfer Operators and have transferred cash deposit of more than $10,000.00 (Ten thousand dollars) to various accounts overseas contrary to provisions of extant laws and regulations and also traded in foreign securities and cryptocurrencies in contravention to CBN ‘Circular referenced TED/FEM/FPC/GEN/01/012 .

“The aforesaid transactions undertaken by the defendants using their bank accounts has caused and is causing significant financial loss to members of the public if left unchecked in order to mitigate the likelihood of reputation /legal risk on the bank.”