Court Grants CBN Request To Freeze Companies Accounts Over Illegal Forex Trading

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The Abuja division of the Federal High Court has granted the request of the Central Bank of Nigeria (CBN) to freeze more than 86 bank accounts of companies allegedly involved in illegal foreign exchange (Forex) trading and other fraudulent financial activities.

Justice Ahmed Mohammed granted the interim order after listening to the motion exparte filed and moved by former Attorney General of the Federation and Minister of Justice, Mr Michael Aondoakaa, SAN, on behalf of the CBN.

Some of the affected 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 informed the court that some of the firms were owned by individuals and organisations based in the United States.

Justice Mohammed directed that the affected accounts are to be frozen for the first period of 180 days, pending the outcome of the investigation and inquiry currently being conducted by the CBN.

During his submissions, Aondoakaa said that the motion exparte 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 CBN also accused the firms of operating without licences as asset management companies in clear violations of its directive as contained in its circular referenced TED/FEM/FPC/GEN/01/012 and dated July 1, 2015.

The apex bank further said that the forex deals by the defendants were undercutting the strength of the naira against the dollar.

Aondoakaa 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 US to seek assistance so that we can block these leakages,’ he said.

READ ALSO: Millions of naira belonging to traders, artisans and others was lost to fake microfinance bank

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

He, however, said that the defendants were at liberty to approach the court and ask that the order be vacated within the stipulated period and adjourned the matter until February 2022.

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 the 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 shareholders of the company at incorporation were Eke Eleanya Urum and Rise Vest Technologies Limited (USA).

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

“However, information on the company’s website indicated that it is an asset management company, which provides a platform for customers to invest in foreign instruments using an app called “Risevest”.’

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 US.’

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.’

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