Business
Missing petrol: Capital Oil Wants Accounts Reconciliation
Ifeanyi Ubah, the chairman of Capital Oil and Gas Industries Ltd has called for a reconciliation of the company’s account with the Nigerian National Petroleum Corporation (NNPC).
Ubah, made the call on Sunday in Lagos, in the wake of the allegation by the NNPC that his company could not account for 100 million litres of petrol stored in its depot in Lagos.
The NNPC similarly accused the MRS, but said the company had returned 30 million litres that it initially diverted.
Ubah described the allegation against his company as mischievous and misleading.
Ubah said the NNPC also failed to tell the public that it also owed Capital Oil billions of Naira from their mutual business transactions.
The NNPC had on March 17 said that it would take full measures to recover about N11 billion worth of Premium Motor Spirit (PMS) which it stored in the facilities of Capital Oil and Gas Ltd in Lagos.
“It is normal for parties in businesses to owe each other in business relationships and that if reconciliation is carried out with the NNPC, the firm will find out that there may be very little or nothing for Capital Oil to pay the corporation.
“In the last four months, NNPC has borrowed products running into millions of litres from Capital Oil,’’ Ubah claimed in a statement made available to newsmen.
He said the management of NNPC should have called for account reconciliation by both parties before forging ahead to issue a false statement alleging his company was owing the NNPC N11 billion.
Ubah said the NNPC should stop trying to use the media to kill him.
“We have an ongoing relationship and we need to sit down and reconcile our accounts.
“NNPC has a subsisting contract with our company which is on throughput basis. The corporation has consistently been in breach of our contractual agreement by owing us money for services rendered.
“Payments from NNPC for services rendered by our company has consistently been delayed for periods spanning over one year and remains unpaid till date.
“Currently, NNPC owes us for services rendered to the corporation at very critical periods to salvage nationwide fuel scarcity since 2015 (more than two years now), amounting to millions of dollars and billions of Naira,’’ it said.
“The corporation has failed to deliver products to us which were duly paid for.
“It is instructive to note that Capital Oil and Gas has trucked out over seven billion litres of petroleum products for the NNPC over the last few years making us their biggest partner in the downstream sector of Nigeria’s Oil and Gas Industry.
“We have written the NNPC severally, requesting for our outstanding payments and delivery of products duly paid for by us.
“Rather than honour our request, we are shocked that the corporation has resorted to this needless campaign of calumny, while refusing to make payments and deliver our products to us till date.’’
Ubah said the company respected the fact that NNPC was its biggest partner in the downstream sector and had always stood by the corporation, especially in times of product scarcity.
“We have proudly rendered intervention services at all critical times in the life of our nation.
“It is on record that few months ago, when the same NNPC had a serious break in its supply chain and in a bid to avert an imminent national scarcity, Capital Oil and Gas Industries Ltd lent the corporation millions of product to close the gap.
“It is our sincere hope that the corporation will respect our contract with it by paying all outstanding bills as well as deliver cargoes which have been duly paid for by us to end this situation.
“We view this as a deliberate attempt to stifle our business bearing in mind that in spite of its unfair treatment, we still manage to retain thousands of employees in this critical period of the nation’s economy where even banks and multinationals are retrenching.
“This act of strangulation has been reported by our company to the Nigerian Senate in a petition against the NNPC that was read on the floor of the Senate on Wednesday, 8th of March 2017.
“A similar petition was also submitted to the Economic and Financial Crimes Commission (EFCC) as well as the Department of State Services (DSS),’’ the statement said.
Business
Electricity: Bands BCDE Suffer No Power
As DisCos struggle to meet the required 20 hours power supply to “Band A” customers following shortage of gas which has hindered power generation since January, customers on Bands B, C, D, and E are left with no light, according to The Tide’s source.
The source learnt that the distribution companies were concentrating more on the Band A customers to keep their Band A feeders from being downgraded.
Band A customers enjoy a minimum of 20 hours of electricity daily.
On April 3, the Nigerian Electricity Regulatory Commission announced that subsidies would no longer be paid for the electricity consumed by Band A customers.
The electricity tariff for Band A customers was revised upward from N68 per kilowatt-hour to N255/KWh.
1 kWh is the amount of energy that could be used if a 1,000-watt appliance is kept running for an hour. For example, a 100-watt light bulb operating for 10 hours would use 1 kWh.
After the power subsidy was removed, the NERC directed the 11 DisCos to release their lists of Band A customers, who must get at least a 20-hour supply daily.
The regulator and the Minister of Power, Adebayo Adelabu, emphasised that there would be sanctions should the distribution companies fail to supply Band A customers with 20 hours of electricity.
The DisCos were also mandated to inform customers whenever they failed to meet the required minimum service level.
NERC said where a DisCo failed to deliver on the committed level of service on a Band A feeder for two consecutive days, the DisCo should, by 10 am the next day, publish on its website an explanation of the reasons for the failure and update the affected customers on the timeline for restoration of service to the committed level.
It stated that if a customer’s service level improves to at least 20 hours, they should be upgraded from lower service bands to Band A, adding that if the DisCo fails to meet the committed service level to a Band A feeder for seven consecutive days, the feeder will be downgraded to the recorded level of supply by the applicable framework.
In their efforts to meet up with the service level, the source gathered that some of the DisCos were gradually resorting to diverting the little allocation they get to the Band A customers.
This is in spite of the fact that the gas constraints that have hindered power generation since the beginning of the year have yet to be addressed.
Many communities said they could not boast 30 hours of power supply since January, a development the government blamed on the refusal of gas companies to supply gas to power-generating companies due to heavy debt.
Recall that recently, the IBEDC spokesperson, Busolami Tunwase, explained that, “One of the primary factors is the low supply of gas to generating companies, which has led to a gradual decrease in available generation on the grid.
Business
‘Inappropriate Insider Dealing’ Earns Julius Berger NGX Sanction
Authorities at the Nigerian Exchange (NGX) have sanctioned Julius Berger Nigeria (JBN) Plc for engaging in inappropriate insider dealing in shares.
According to a document obtained by The Tide’s source, JBN, Nigeria’s leading construction company, was sanctioned for “insider dealing during closed period”.
Incorporated in 1970, Julius Berger, Nigeria, which was incorporated in 1970, became a publicly quoted company in 1991 and has more than 10,000 shareholders.
NGX Regulatory Company (NGX RegCo), the self regulatory organisation (SRO) that regulates activities at the NGX, stated that JBN breached certain provisions of the listing rules and was thus sanctioned accordingly.
According to NGX RegCo, JBN violated provisions on “closed period”, in breach of the construction company’s commitment to adhere to listing rules and standards.
The NGX had tightened its rules and regulations to checkmate boardroom intrigues and block information arbitrage that tend to confer advantages on companies’ directors.
The amendments expanded the scope and authority of corporate financial reporting while eliminating gaps that allowed companies to sidetrack relevant rules in stage-managing corporate compliance.
The enhanced framework provided clarity and greater disclosures on directors’ trading in shares, corporate liability for accuracy and compliance of financial statement, dissuade bogus dividend payment and other sundry boardroom’s maneuverings that tend to favour insiders.
The amendments came on the heels of noticeable increase in violations of rules on ‘closed period’, a period when directors are banned from trading in the shares of their companies.
Rule 17.17 of the NGX disallows insiders and their connected persons from trading in the shares or bonds of their companies during the ‘closed period’ or any period during which trading is restricted.
This period is mostly at a period of sensitive material information, like prior knowledge of financials, dividends or major corporate changes, which places directors and other insiders at advantage above other general and retail investors.
A review of the disclosure violations at the stock market had shown that all violations in 2021 were related to violation of Rule 17.17 on ‘closed period’.
Under the amendments, in addition to the provisions of relevant accounting standards, laws, rules and requirements regarding preparation of financial statements, companies are now required to include several specific declarations on securities transactions by directors, changes in shareholding structure, self-assessment on compliance with corporate governance standards and internal code for directors on securities transactions among others.
Business
Nigerian Breweries To Suspend Operations In Two Plants
Nigerian Breweries Plc says it is planning for a company-wide reorganisation which include the temporary suspension of operations in two of its nine breweries.
It said this is part of a company-wide reorganisation as part of a strategic recovery plan aimed at securing a resilient and sustainable future for its stakeholders.
The Business Recovery Plan includes a rights issue and a company-wide reorganisation exercise which includes temporary suspension of two of its nine breweries and an optimisation of production capacity in the other seven breweries, some of which have received significant capital investment in recent years.
These measures include relocating and redistributing employees to the remaining seven breweries and offering support and severance packages to those that become unavoidably affected.
The company said this move is essential to improve its operational efficiency, financial stability and enhance a return of the business to profitability, in the face of the persistently challenging business environment.
In letters signed by the company’s Human Resource Director, Grace Omo-Lamai, and addressed to the leadership of the National Union of Food, Beverage & Tobacco Employees (NUFBTE) and the Food Beverage and Tobacco Senior Staff Association (FOBTOB), the company informed both unions that its proposed plan would include operational efficiency measures and a company-wide reorganisation that includes the temporary suspension of operations in two of its nine breweries.
As a result, and in accordance with labour requirements, the company invited the unions to discussions on the implications of the proposed measures.
Recall that the company recently notified the Nigerian Exchange Group (NGX) of its plan to raise capital of up to N600 billion by way of a rights issue, as a means of restoring the company’s balance sheet to a healthy position following the net finance expenses of N189 billion recorded in 2023 driven mainly by a foreign exchange loss of N153 billion resulting from the devaluation of the naira.
Speaking on these developments, the Managing Director/CEO, Nigerian Breweries, Hans Essaadi, described the business recovery plan as strategic and vital for business continuity.
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