EXCLUSIVE: Firm, CBN tango over allegations of fraud in $54.2m bank guarantee charges

Lensview Consulting Services, a forensic and auditing firm, has accused the consumer protection department (CPD), an arm of the Central Bank of Nigeria (CBN) of bias, fraud, and deliberate cover-up in its handling of bank guarantee charges refund involving First Bank of Nigeria (FBN) and its client.

A bank guarantee refers to a promise provided by a bank or any other financial institution that if a certain borrower fails to pay a loan, then the bank or the financial institution will take care of the losses.

The consulting firm’s client had approached FBN to issue a bank guarantee of $54.2 million on its behalf to a Nigerian oil company, according to a letter dated June 25, 2015, obtained by TheCable.

In a statement, Lensview Consulting said both parties (FBN and its client) had agreed to a bank guarantee fee of .50 percent for the transaction. But rather than taking the agreed fee, FBN took 1 percent which translated to $554,570.68, leading to an overcharge of $227,235.34.

On the refusal of FBN to refund the excess of the amount agreed, and the long standing offered rate at .50 percent, Lensview Consulting petitioned the CBN, who after a careful review of the matter, asked FBN to refund same to customer with accrued interest as a standing rule.

According to a letter dated September 17, 2021, title, ‘letter of acceptance for refund of excess bank charges and interest — USD 1,314,810.90’, both FBN and the client had accepted the refund of the charges.

However, the consulting firm said while its client was expecting to be credited, FBN submitted an email conversation allegedly between its staff and a representative of the client, claiming that a bank guarantee fee of 2 percent was agreed upon.

As a result, the CPD reversed its decision and subsequently closed the case.

“Please be informed that we have reviewed the letter and concluded that there are no new facts/information to warrant a change of our earlier position communicated to you vide emails dated 26th October 2021, 12th November 2021, and letter dated 24th May 2022,” the CBN department said in a letter dated January 5, 2023.

The CPD also alleged that it held an interdepartmental meeting between a representative of Lensview Consulting, “Mr. Polycarp, representatives of the governor’s department, legal services department and the consumer protection department in August 2022, wherein the unanimous decision was upheld that the position of the CPD in respect of this complaint is correct”.

“…In light of the above, please be informed that this case remains closed and further correspondence would not be entertained,” it added.

Four days later, the department restated its decision in another letter dated January 9, 2023, but noted that Lensview’s representative (Mr. Polycarp) was not part of the meeting.

Consequently, on January 20, 2023 Lensview Consulting wrote to the governor of the apex bank on the “fraudulent perversion, impersonation, and miscarriage of justice” by CBN’s CPD.

It alleged that there was an impersonation of its person, fraudulent neglect and non-compliance on the part of the officers of CBN in the matter.

‘CPD MADE U-TURN BASED ON FRAUDULENT EMAIL’

Faulting the CPD’s decision which was based on the email communication earlier mentioned, Lensview Consulting said FBN was aware that the said company’s representative did not have the powers or mandate to authorise such transactions.

“Where he may, it will require at least two authorised signatures over the company’s letter of acceptance on their letter head document and not via a chat on the phone between two mutual friends,” the consulting firm said in the statement.

“The transaction was a heavy one, FBN cannot claim ignorance they didn’t know that for any change to transaction fees to be effective, it must first be communicated to the customer with a letter with evidence of acknowledgement as a proof that the customer is aware of the change.

“Given the facts of the matter vis-a-vis the practice of banking in Nigeria, it’s surprising that the CBN after its earlier verdict that refunds be made, it made a sudden U-turn that FBN was justified by the fraudulent e-mail received from customer’s staff to it to conclude that the e-mail suffices as an authority for FBN to take the charge based on instructions from company’s staff without confirmation from company’s authorised signatories.

“The question is, if the e-mail content sufficed, why did FBN charge 1 percent instead [of] 2 percent of guarantee fee stated in the e-mail?

“Who negotiated it from 2 percent to 1 percent?

“Where is a copy of the letter from customer acknowledging the new rate which could have been negotiated or rejected if customer saw it?

“More worrisome is the CBN’s lack of explanations why the email chat between these mutual friends on behalf of their organisation sufficed as an authority to move such huge amount from customer’s very busy account in the books of FBN.”

ALLEGED COVER-UP BY CBN’s CPD

Further speaking, Henry Foss, managing consultant, Lensview Consulting Services, said the engagement of one “purported Mr. Polycarp” to stand in for Lensview Consulting Services in the said August 2022 meeting was another fraudulent move by the CBN to cover for FBN in the open e-mail fraud.

“The CBN in one of their recent letters to Lensview Consulting, wrote to say they have closed the matter based on the affirmation of the impostor consultant they hired to kill the matter,” Lensview Consulting quoted him as saying.

The company added that as soon as the CBN realised that it had erred by “engaging an impostor consultant to stand in for Lensview” in the said August 2022 meeting, they quickly wrote back with efforts to withdraw their letter dated January 5, 2023, wherein the Mr. Polycarp in question was referred to.