CBN Expands Forex Abuse Investigations from Betting Firms to 55 Companies

The Central Bank of Nigeria (CBN) has teed off a forex probe into the activities of 55 firms and persons in the currency market, after an initial scrutiny pointed in the way of probable breach of extant foreign exchange laws.

The suspected foreign exchange transactions infractions largely have occurred outside the over-the-counter spot market alternatively known as Investors and Exporters (I&E) forex window. The window serves formal sector operators who meet certain requirements, mainly centered around buying forex for purposes approved by the CBN.

In August 2020, the apex bank got a court order to freeze the firms’ accounts, which are said to have been responsible for volatility in forex exchange. The CBN alleges that the firms and individuals are “the cause of the current volatility and imbalance in the foreign exchange regime in Nigeria with the attendant negative impact on the economy.”

The betting firms under the CBN radar for possible forex regulations infractions have purchased and transferred foreign exchange to purported foreign technology partners after being refused the approval of the National Office for Technology Acquisition and Promotion (NOTAP) which is required to buy forex from official-recognized (CBN) sources.

Industry watchers think there is a suspicion that the betting firms may be involved in money laundering. The usual forex regulations infraction has for more than four decades been to purchase foreign exchange at cheap official rates and sell for higher amounts in the parallel or black market, a very lucrative practice known as “arrangee” in the 1970s and as “round tripping” from the mid 1980s. Firms that handle large volumes of cash are thought to be ideal vehicles for money laundering.

Also Read: Despite CBN Interventionist Strategies, Naira Exchanges for N462

Given the experience of over 40 years, it is very unlikely that the CBN’s hawkish approach would have a significant impact on dissuading people from abusing the regulations that govern foreign exchange transactions. The incentives to abuse the system is very high precisely because of the multiple exchange rates the CBN maintains. The opportunity for arbitrage i.e. buying dollars at official rates and selling in the black market at high rates, seems the real source of “volatility” of the naira’s value rather than the activities of those who have always sought to capture the massive administratively created rents.

The companies and individuals under scrutiny are:

1. Stallion Nigeria Limited
2. Solem Agro Limited
3. Deekay & Sons Limited
4. Hana Nigeria Limited
5. Emel Nigeria Limited
6. Sonnex Nigeria Limited
7. Montana Nigeria Limited
8. Daraju Nigeria Limited
9. Dasco Nigeria Limited
10. Savvy Corps Limited
11. Pan-Cat Nigeria Limited
12. Mustafa-Multipurpose Services
13. Olayfis Global Resources Limited
14. Pals Interchange Concept Limited
15. 2015 Petroleum & Investments Limited
16. Manann Nigeria Limited
17. Brollo Pipe & Profile Ind. Limited
18. Altrunk Nigeria Limited
19. Dartford Energy Services Limited
20. Global Links Ventures Limited
21. Elemental Integrated Associates
22. New Home Distribution (Africa)
23. ACCI Ventures (Nig) Limited
24. Dover Engineering Limited
25. John Kell & Associate Nigeria
26. Maaway Ventures Limited
27. Good Metal Enterprises
28. Medlog Logistics Services Limited
29. Interswitch Nigeria Limited (Dollar Acct)
30. Beirut Hill Construction Limited
31. CMA CGM Nigeria Shipping Limited
32. Agrinexus International Limited
33. Sylvangel Maritime Resources Limited
34. Unimer SRL Limited
35. SCIB Nigeria & Company Limited
36. Domenik LLC
37. Petro-Afrique Energy Services
38. Silver Dome Enterprises Limited
39. Ajibola Bankole Adebutu
40. Petro-Afrique Energy Services Limited
41. Steel Force Far East Limited
42. Stemcor London Trading Limited
43. Fix Nigeria Limited
44. SA Turutu International Ent
45. New Brand Metals Global Limited Ventures
46. Auto Petroleum Company Limited
47. Cavendish Mechanicals Limited
48. Aquashield Oil & Marine Limited
49. Haitch & Elf Integrated Services Limited
50. Fenog Nigeria Limited
51. Promasidor Nigeria Limited
52. Hatford Resources Nigeria Limited
53. Don & Chyke Nigeria Limited
54. BCL Trading Services Limited
55. Omniworx Export Enterprises