The ICIR analysis of some banks’ audited annual reports and financial statements for the year ended December 31, 2023, revealed that the banks included Access Holdings, Zenith Bank, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Stanbic IBTC Holdings, Fidelity Bank, and Wema Bank.

It showed that the number of court claims against the banks surged by 460.47 per cent compared to N2.53 trillion claims in 2022.

The findings indicated that the court cases were related to alleged errors, omissions, and breaches of agreement.

Access Holdings is currently involved in 267 court cases: UBA, 1,649; GTCO, 1,546; Stanbic IBTC, 416; Fidelity Bank, 72; while Zenith Bank and Wema Bank did not disclose the numbers.

Despite the banks’ insisting the court cases would not impact their financial positions, shareholders’ responses suggest the claims could wipe out their total equity.

Total equity is the value left in a company after subtracting total liabilities (what the banks owe) from total assets (what the banks own).

The ICIR reports that Access Holdings has the highest claims, amounting to N11.3 trillion against it, representing 79.69 per cent of the amount claimed against the seven banks.

With only N2.19 trillion total equity, Access Holdings stated that it had already made a provision of about N3.46 billion for the claims despite insisting that the numerous court proceedings would not adversely affect its financial position.

Zenith Bank followed with N1 trillion claims against it; UBA, N986.247 billion; GTCO, N599.2 billion; Stanbic IBTC, N275.274 billion; Fidelity Bank, N11.74 billion; and Wema Bank, N9.47 billion.

Relative to 2022, Zenith Bank faced N967 billion; UBA, N666.12 billion; GTCO, N609.5 billion; Stanbic IBTC, N264.84 billion; Fidelity Bank, N12.06 billion; and Wema Bank, N8.33 billion court claims.

Why court cases against banks are rising

A legal expert, Rose Adima, told The ICIR that banks recorded high court claims in 2023 for several reasons.

According to her, there was a sharp rise in fraud cases against deposit money banks in Nigeria, amounting to about N5.79 billion in losses in the second quarter of 2023, representing a staggering 1,125 per cent rise compared with N472 million lost in the first quarter of that year.

“Naturally, bank customers will not take this lightly with the banks. Banks were sued to recover the deposits of customers affected by fraud.”

She also attributed the surge in court claims against the banks to the lack of appropriate legal advice banks receive to settle legitimate customer claims.

“It is found that banks need to seek appropriate legal advice or get the wrong ones when deciding whether or not to prosecute specific customer claims. At the end of the trial, banks are made to pay higher monetary damages/compensation as atonements for their wrongs. This was the case in 2023.”

Adima said banks’ unbridled compliance with regulatory bodies’ demands and staff incompetence also expose them to defamation claims and breach of contractual relationships.

“In most cases, banks need to check whether the demands of regulatory agencies like the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) comply with the law before acceding to their requests. This sometimes backfires, as customers go after the banks and the regulatory authorities.”

She added, “Some incompetent bank staff have incurred liabilities for the banks due to their incompetence in handling operational matters.”

Banks’ indictment on financial fraud

In March this year, the EFCC indicted the banks as being involved in about 70 per cent of the financial crimes in Nigeria.

The EFCC chairman, Ola Olukayode, disclosed this at the 2023 annual retreat and general meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) in Abuja.

He said the banking sector was increasingly becoming a cesspool of fraudulent activities and noted that banking fraud was inside and outside-related.

Inside-related fraud comprises outright selling customers’ deposits, authorising loan facilities, forgery, and other unhealthy and criminal practices. In contrast, outside-related ones include hacking, ATM fraud, and conspiracy.

In the review year, for instance, Access Bank reported 6,634 fraud and forgery cases that resulted in N8.61 billion, with N6.15 billion incurred as an actual loss. This represents a 40 per cent increase from N1.44 billion the bank incurred in 2022.

While Fidelity Bank posted 3,079 fraud and forgery cases worth N3.83 billion, with an actual loss of N2.094 billion, Wema Bank recorded 1195 fraud and forgery cases worth N1.14 billion, which resulted in an actual loss of N685.595 million.

To curb the menace, the EFCC boss suggested that ACAEBIN monitor banks’ financial activities, compare actual and budgeted revenue with expenses, and carry out periodic reviews and checks, among other things.

Call for special commercial court

There have been worries within the financial corridors about rising cybercrime losses, even as bankers anticipate a special commercial court to deal with backlogs of financial-related cases.

In November 2023, the President of the Chartered Institute of Bankers of Nigeria (CIBN), Ken Opara, suggested the creation of a specialised court to exclusively deal with commercial and financial cases as opposed to having divisions within the existing court structure when he spoke at a programme organised by the CIBN in collaboration with the National Judicial Institute (NJI) in Abuja.

He said cases needed to be speeded up and that much work was to be done in setting up a special court for commercial and financial cases that would handle financial matters.

Shareholders express worries

The National President of New Dimension Shareholders, Patrick Ajudua, told The ICIR that shareholders are worried about the magnitude of court cases involving banks.

He said, “Yes, litigation can arise from normal business transactions, but much depends on the bank’s ability to use out-of-court settlement if both parties agree.”

He stressed that the implication of always resorting to court resulted from the mounting claims against the bank, which could seriously affect the shareholders’ fund.

“So, we employ the bank to always seek alternative dispute resolution to minimise the cost of litigation,” Ajudua maintained.

Also, the national chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said some cases might be frivolous and not prosecuted.

This paper is an intellectual discourse on parenting and child safeguarding in our contemporary society. It is broadly categorized into four separate headings viz: the definitions of key terms that make up the topic, a vivid examination of the subject matter within the context of the Nigerian society today and finally the conclusion recommending ways to achieve good and effective parenting.

Definitions:

Parenting connotes the act of raising a child or the act of becoming a parent. A parent on the other hand, according to Merriam Webster Dictionary, is a person who brings up and cares for another. From the above, it can be deduced that being a parent is not just limited to biologically passing a gene to the child at birth, but it also has an extend meaning that includes guardian, step-parent, and grandparent amongst others.

A child under Section 29 (4) of the Nigerian Constitution, 1999 (as amended) is any person under the age of 18 years. This definition also agrees with the definition of a child under the United Nation Convention on the Rights of Child which has been domesticated in Nigeria as the Child Rights Act, 2003.

The Four Prominent Parenting Styles

Styles of parenting according to the three proponents, Dr Dinna Baumrind, a developmental psychologist, Eleanor Maccoby and John Martin (Stanford Researchers). Based on this theory, there are four broad categorization of parenting styles. These are:

1. Permissive parenting: This is characterized by lack of rules by the parent(s) and lack of expectation from the child; letting the child decide for him/herself. There is a high responsiveness from the parents to meet the child’s need but low demands from the parents, overindulgence of the child to always have his/her way in order to avoid conflict, etc.
2. Neglectful parenting: This style of parenting is the extreme case of permissive parenting. It is notable for always allowing the child fend for himself, low responsiveness and attention from the parent, offer little or no guidance to the child. It results in the child often struggling with self-esteem, and finds it difficult to form close relationship.
3. Authoritarian parenting: This style of parenting enforces strict rules with little or no regards for how the child feels, one-way communication, high demanding, low responsiveness, parent-driven in nature.
4. Authoritative parenting: This seems to be the best parenting style as it creates some balance. It is characterized by open communication and natural consequences, sets clear and moderate rules and expectations, staying attuned to the child’s needs and help the child to meet expectations. As such, the child clearly knows what is expected of him/her and feels confident for being able to meet those expectations, solving problems together with the child.

Parenting and Child Safeguarding in Our Contemporary Society (Nigeria in the Searchlight).

With reference to Nigeria where cases of child abuse and moral decadence are being reported daily, more emphasis will be placed on the first three listed above.

On child abuse; Child abuse is just another word for the neglect or violation of the rights of a child. Although there are several factors that may account for the violation of a child’s rights ranging from the individual propensity of the child, structure of the local community, socio-economic and cultural factors.

However, prominent amongst these is parenting style adopted in a home. Authoritarian parents can indulge in the violation of child rights via constant physical combats, verbal abuses, early and forced marriage. According to the UNICEF report (2017), Nigeria has the largest number of child brides in Africa with more than 23 million girls and women who were married as children, most of them from poor and rural communities.

Also, neglectful parenting may well account for sexual abuse (defilement) of children right under their parents’ roof by house help or a close relation staying in the same house. The child is bereft of the opportunities to discuss these cases of abuse with their parents either because the parents are “too busy” or that they are overly uninvolved in the child’s wellbeing. Therefore, the child cannot get the requisite help for good up-bringing. According to Chiluba Edo (Golden Gate University, School of Law), “Child abuse and neglect is prevalent in the everyday life of the child but it receives little or no attention by the society”.

On moral decadence, the importance of parenting in the life of a child cannot be overrated as parents are the first role models’ children have to interface with. Parenting, whether good or bad, will to a very large extent determine the child’s turn-out/outcome later in life. Therefore, every person on the street is a product of a home. While good parenting will groom the child’s good self-esteem, confidence, self-reliance, tactfulness and correct perception of issues amongst others, bad parenting such as permissive and neglectful parenting may more than likely result in moral decadence in the child. There are obvious cases of moral decadence everywhere in the society. This emanates more from poor or neglectful parenting than any other factor such as peer pressure, cultural and socio-economic factors. It is often said that children are the leaders of tomorrow. So, if most children are now products of poor parenting it simply means the leaders of tomorrow will invariably be bad.

According to John Creek (2015) on the ‘The Negative Impacts of Poor Parenting’, poor parenting can affect a child and invariably the society in the following ways:

1. Poor parenting can instigate hates among the children towards their parent and society.

2. Poor parenting affects a child psychologically which can be in two ways.

a) Inferiority complex: The child seems to be affected in this way whereby he feels so inferior among his peer groups

b) Intellectual Being: once a child is affected psychologically his or her intellectual being is also affected to a great extent.

3. Poor parenting leads a child to destruction by means of joining wrong companies just to seek for attention and protection

4. Poor parenting is responsible for the increase in crime rate across the globe, and this has not brought any meaningful development to the society.

5. Poor parenting eliminates some source of happiness in a child’s life by making ordinary things look so different and difficult to them.

6. Trust will have no light in any child experiencing poor parenting, which means it becomes difficult for them to trust the right people in their life.

From the above, it can be inferred that parenting and child’s safeguarding directly shape and mold the behavior of every child either positively or negatively. However, as important as this may seem, most parents just watch on while their children decide what to do with their lives, whether good or bad and them adopt the children behavior with the mantra ‘it is their time’. Such behavior from parents is largely responsible for the festering sexual immorality among teenagers, smoking, drinking, stealing, teenage cult groups, piercing/perforation of ears and noses by the male folks etc. amongst other prevalent decadence commonly seen is the society today especially amidst teenagers. Some of them do not know their lefts from rights so wallow on while the on-looking parents negligently adopt these despicable behaviors openly or passively.

Conclusion:

In conclusion, having established that a child’s behavior is directly linked to parenting, it is pertinent to cursorily point out some effective ways of achieving good parenting and child’s safeguarding that can enhance the worth of every child in our today’s society. Although it cannot be asserted that one out of the parenting styles discussed above is the hard and fast rule of good parenting, the authoritative parenting seems to be the most viable option and a cutting-edge method in a bid to accomplish good child’s upbringing. This parenting style as noted above, maintains some level of balance between parents’ expectations and those of the child. It enhances the self-image of the child as a result of the mild expectations they are able to live up to with the help of their parents. Research has consistently established that children of authoritative parents are more likely to enjoy positive relationships with their peers, to do well in school, and to become independent and self-sufficient than children whose parents are permissive, neglectful, or authoritarian.

Finally, with due diligence on the parts of parents providing good and proper up-bringing, the society will be a better place as it was Mother Teresa who once said ‘what can you do to promote the world peace? Go home and love your family’. And we so conclude.

Rose N. Adima ESQ.

This article was first published in Sacred Heart Nursery /Primary School Apapa GRA Lagos Year Book 2022.

But a check at the SEC website showed that it has not published its annual reports since 2015, and the CBN website since 2018, raising concerns of integrity in their financial management.

The annual reports are the core of transparency and accountability surrounding the activities of public interest entities, a financial analyst, David Adonri, said.

“The CBN and SEC are regulators in their industry. They require that companies they regulate disclose their financial activities from time to time, and impose sanctions when such disclosures are not followed. So, if they demand such a level of transparency, but they themselves are no longer transparent, then it is a call for concern,” Adonri said.

A development economist, Kelvin Emmanuel, had also expressed concern during an appearance on Channels Television in June 2023 that the CBN had since 2019 stopped disclosing its audited financial statements to the Senate in line with Section 51 of the CBN Act 2007, and had consequently stopped gazetting the published financial statements in line with Section 53 of the CBN Act.

What the law says

The law is not silent as regards the publication of annual reports by public interest entities, a legal expert, Rose Adima, told The ICIR.

“It is not news that for accountability sake, public interest entities are duty-bound to publish financial reports. Such publications, however, depend on the entity and the law that governs the activities of such entities,” Adima explained.

FRC, its Act, and role

The Financial Reporting Council (FRC) of Nigeria is a federal government agency responsible for, among other things, developing and publishing accounting and financial reporting standards to be observed in preparing financial statements of public entities in Nigeria, and for related matters.

Under Section 77 of the Financial Reporting Council of Nigeria Act, 2011 (Act No. 6), public interest entities “means Governments, Government Organisations, quoted and unquoted companies, and all other Organisations which are required by law to file returns with regulatory authorities, and this excludes private companies that routinely file returns only with the Corporate Affairs Commission (CAC) and the Federal Inland Revenue Service (FIRS).”

Adima, the principal partner at Rose Adinma & Associates, posited, “In line with the above, therefore, it could be said that government organisations may include the CAC, CBN, FIRS, and SEC.

“All public interest entities are mandated by virtue of the law establishing them to publish their financial statements.”

What CBN Act says

Section 50 (1) of the Central Bank of Nigeria Act (2007) provides thus:

“The Bank shall, within two months after the close of each financial year, transmit to the National Assembly and the President a copy of its annual accounts certified by the Auditor.

(2) A Report required to be submitted to the National Assembly and the President shall be published by the Bank in such manner as the Governor may Direct.

(3) The Board shall ensure that accounts submitted pursuant to this Section shall as soon as possible be published in the Gazette.

(4) The Bank shall as soon as practicable after the last day of each month make up and publish a return of its assets and liabilities as at the close of business on that day, or if that day is a holiday, as at the close of business on the last day preceding business day.

(5) A copy of the return referred to in sub–section (4) of this Section shall be forwarded to the President and shall be published in the Gazette.”

Section 48 of the Central Bank of Nigeria Act (2007), says the Bank’s financial year shall begin on January 1 and end on December 31.

What ISA Act says

The SEC, being an establishment of the Federal Government, is also expected to file an annual report, Adima maintained.

This is in line with Section 27 of the Investment and Securities Act (2007), which provides that “The Commission, shall not later than three months after the end of each year, submit to the Minister and the National Assembly a report on the activities and administration of the Commission during the immediately preceding year, and shall include in such reports audited accounts of the Commission and the report of the Auditor on the accounts.”

According to her, from the two provisions above, therefore, it was crystal clear that the publication of reports is part of the obligations bestowed upon government agencies, and that there are punishments for defaulters.

Section 57 of the Financial Reporting Council of Nigeria Act, 2011 (Act No. 6) states that “where any public interest entity is required to prepare any financial statement or report under any enactment, it shall ensure that the financial statements or reports are in compliance with the accounting and financial reporting standards developed by the Council under this Act,” she noted.

Effect of non-compliance

Adima also cited Section 65 (1) of the Financial Reporting Council of Nigeria Act, 2011 (Act No. 6), which provides thus:

“Where the Council reaches a final decision under section 57 to the effect that a public interest entity has failed to comply with any of its decisions under this Act, and with such other financial reporting, accounting, auditing, and financial reporting standards as may be specified under the relevant enactments, the Council shall serve a notice on the entity for an immediate restatement of its financial statements.

(2) Where a notice is served on a public interest entity under sub-section (1) of this Section, it shall, within 60 days of the service of the notice, restate its financial statements and resubmit same to the Council and to the relevant government department or authority.

(3) Any public interest entity which fails to comply with the notice referred to in sub-section (2) of this section commits an offence and shall on conviction be liable to a fine not exceeding N10,000,000.00 and be required to restate the said financial statements within 30 days thereafter, and the Council shall require such entity to disclose same in the following year’s financial statements.”

The lawyer explained that by the provision, “it is compulsory for all government organisations that fall under the public interest entities to publish their reports on financial statements and make them available to the public whose tax payments are used to fund their activities as domesticated in the Freedom of Information Act (2011).”

CBN declines comment

The apex bank did not respond to The ICIR questions on why it has not been making its annual reports public since 2018, as its director of corporate communications, Isa Abdulmumin, did not respond to messages sent via WhatsApp.

How SEC and FRC responded

The SEC head of corporate communication, Efe Ebelo, had in March 2020 told this reporter that a board was to meet to approve the commission’s annual reports.

Asked now why SEC has still not made the reports public, Ebelo said, “The board has approved all the reports from 2015 to 2021,” but declined to explain why the reports remained have not been made public.

When also reached for inquiry, the deputy director of policy, planning, research, and statistics at the FRC, Felix Azubuike, responded, “We confirm to you that the Council is in receipt of the Annual Reports and Financial Statements of Securities and Exchange Commission and Central Bank of Nigeria up to the year ending 2021.

“The Council has, in line with her statutory powers carried out regulatory reviews of the FS [financial statements].”

But Azubuike did not respond to a follow-up question about whether FRC was not supposed to have received 2022 annual reports from CBN and SEC and what sanctions were meted out to the regulators, even though he promised to revert.

A look at CBN’s financial status as of December 2017

A draft copy of the CBN Annual Report for the year ended December 31, 2017, signed by its suspended governor Godwin Emefiele, and former deputy governor, economic policy directorate, Okwu Nnanna, revealed that the apex bank posted a negative net interest (expense)/ income of N659.254 billion in 2017 after N1.344 trillion interest expenses were deducted from N685.608 billion interest income.

Net operating income dropped to N418.427 billion in 2017 from N660.350 billion in 2016 after the deduction of loan impairment charges from the total operating income of N788.736.

The bank also posted negative total operating expense of N327.643 billion in 2017 and N548.884 billion in 2016, respectively.

A further look at the report showed that net income before tax dropped to N109.170 billion from N125.360 billion, and after-tax deduction, the net income for the year dropped to N107.397 billion in 2017 from N124.470 billion in 2016.

Its total assets stood at N29.588 trillion, from N21.914 trillion, total liabilities at N28.769 trillion from N21.219 trillion, and total equity at N819.222 billion from N695.104 billion in the review year.

SEC financial status as of the 2014 year-end

For the year ended December 31, 2014, SEC posted a total comprehensive loss of N73.541 million after other comprehensive income/loss of N269.024 million was deducted from the surplus of N195.483 million.

Total income rose to N9.280 billion in 2014 from N8.965 billion in 2013, and total assets to N34.196 billion from N34.402 billion, while total liabilities stood at N2.033 billion from N2.166 billion.

Global perspective and standard

The publishing of annual reports does not relate to the CBN or SEC or any government ministry or agency alone; it is a standard globally known and recognised practice, a development economist, Kazeem Bello, said.

It is a practice that all public sector entities must ensure they take accountability serious, and financial report rendering is mandatory, he said.

According to Bello, the fact that the laws require this as a minimum standard shows why it must be honoured.

He wondered why Nigeria lacked simple adherence to the laid-down rule.

“We lack the taste for accountability and financial reporting responsibilities in Nigeria. In most countries where things are well structured, the volume of work carried out by professional auditors, lawyers and accountants are in the ratio of average 65 per cent for governments and the public sector, and 35 per cent or lower for the private sector,” said Bello, who is the chief executive officer/principal partner, Afrique Capital and Equity Funds Limited.

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