The Global Integrity Crusade Network (GICN), a civic organisation, has said that its recent investigation revealed that Guaranty Trust Bank (GTBank) Limited, a subsidiary of Guaranty Trust Holding Company Plc, also known as GTCO Plc, has over 10,000 customers being exposed to grave danger without their knowledge.
NewMailNG reports the group, in the Private Investigation Report (PIR), claimed GTBank Limited, led by Segun Julius Agbaje, Managing Director/Chief Executive Officer (CEO), unethically opened bank accounts in the names of several thousands of the said “customers” without their consent.
Edward Ejembi Omaga, President of Global Integrity Crusade Network, while presenting the group’s PIR at a world press conference Friday, October 4, 2024, noted the report indicated that GTBank had been punished severely for different violations even at the international level.
The organisation, in the report, also levelled other sundry allegations bordering on “unscrupulous, unethical and criminal activities” against the financial institution.
Justifying its responsibility to carry out the investigation, Omaga asserted that the CIGN Private Investigation Report was compiled pursuant to Section 24 (d) and (e) of the 1999 Constitution of the Federal Republic of Nigeria (as amended).
The group said the fundamental objective of the report to help in ensuring that corrupt practices are abolished both the important banking sector of the Nigerian economy and the country at large.
Explaining the inherent dangers in GTBank’s Unsolicited Account Opening for unwary individuals as its “so-called” customers to unduly boost its customer base, Global Integrity Crusade Network said as of the time of its report, there are over 10,000 customers exposed to grave danger without their knowledge, as accounts were purportedly opened in the Guaranty Trust Bank in their names without their consent.
According to the report, Guaranty Trust Bank Limited was incorporated July 19, 1990, and licensed to engage in commercial banking and other allied services within Nigeria and elsewhere.
GICN, in the report, further revealed the bank has Ordinary Shares of 25 billion with eight Active Directors, but its only shareholder and person with significant control is Guaranty Trust Holding Company Plc, represented by Segun Julius Agbaje.
The report stated: “In the United Kingdom, Segun Julius Agbaje started the Bank by registering same at the Companies House as Rainsouth Limited with Number 5969821 on 8 December, 2006.
“The said Rainsouth Limited went through various changes until it became Guaranty Trust Bank (UK) Limited on 17 March, 2008. One of the corrupt practices recently linked to Guaranty Trust Bank Limited in Nigeria has to do with Unsolicited Accounts Opening.
“This is a situation where a customer did not approach the bank or show any interest in maintaining an account with the bank. Yet, the bank goes ahead to source for the customer’s information, such as telephone number, date of birth, Bank Verification Number (BVN), and other vital details to open an account for the customer without his/her consent.”
The group also alleged in the report that “the aim of this practice is to increase the customer base of the Bank, thereby giving it high ranking in terms of size, capacity and profitability.”
Omaga told reporters: “We submit that Unsolicited Accounts Opening tantamount to breach of data privacy, identity theft, and can expose the innocent account holders to lots of financial crimes.
“As of today, there are over 10,000 customers in the database of Guaranty Trust Bank Limited who are already exposed to grave danger without their knowledge.”
GICN as well indicated in the report that some of the affected customers, who got the wind of the development have threatened to sue the bank.
The group, at the media briefing equally said that its PIR report alleged that Guaranty Trust Bank, besides its involvement in Unsolicited Accounts Opening for over 10,000 ‘customers’, hurriedly put together misleading financial statements and declared false profits to mislead the public on its financial positions.
The report noted: “We have equally uncovered that Guaranty Trust Bank Limited has been declaring profits that do not reflect its actual financial performance.
“For instance, GTCO PIc on 11 September, 2024, released its Audited Consolidated and Separate Financial Statements for the period ended 30 June, 2024, to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE) wherein the whopping sum of N1.004 trillion was declared as Profit Before Tax (PBT).”
“This caused the Group to be reported all over media as ‘the first Nigerian financial institution to cross the N1trillion mark in profit.’ ”
GICN, however, stated in the report: “It is our finding that these figures, as contained in the Audited Statements, are mere conjectures hurriedly put together by Segun Julius Agbaje and his team to deceive the Securities and Exchange Commission (SEC), Financial Reporting Council of Nigeria (FRCN), Central Bank of Nigeria (CBN), customers/investors and the general public into believing that all is well with GTB.”
The group, while challenging the Nigerian regulatory bodies to do their investigations too, further asserted that GTBank “could not justify its stated profit of N1 trillion”, which it released to the public recently, purporting that such humongous profit could have been declared through roundtripping.
Omaga said at the briefing: “Ladies and Gentlemen, there is no gainsaying the fact that Guaranty Trust Bank Limited has become notorious over the years for engaging in deceptive accounting practices to artificially inflate profit figures.
“For instance, no substantial pieces of evidence presented by Segun Julius Agbaje to support the assertion that GTCO Plc made over N1 trillion in profit as at 30 June, 2024. Even at that, it is very possible that the figures were generated through roundtripping.”
He explained the concept of roundtripping as “a process where funds are moved in and out of the bank through different accounts or entities to create an illusion of legitimate transactions.
“The combination of this process and other unethical business practices within the Bank points towards the direction of systemic corruption, fraud and money laundering, which are opened for further investigation by the relevant agencies.”
“It is feared that such ugly situation if not properly checked could have the tendency of not only undermining customers/investors’ confidence in the Bank but pose significant risks to the stability of Nigerian financial sector.”
Besides the purported misleading financial statements, the PIR report further noted Guaranty Trust bank had been punished severely for different violations at the international level.
Omaga, President of GICN alleged: “Surprisingly, Segun Julius Agbaje did not tell Nigerians that the corporate image of Guaranty Trust Bank Limited has been terribly battered in many foreign countries where it is carrying on business.
“He (Agbaje) lied by stating in the recent Audited Statements that GTCO Plc ensures compliance with disclosure requirements under the Disclosure and Transparency Rules of the UK Financial Conduct Authority (FCA).”
The report stated: “The truth is that Guaranty Trust Bank (UK) Limited was sanctioned by the same FCA to pay a financial penalty of £525,000 for breaches of Principle 3 (Management and Control) of the Authority’s Principles for Businesses between 19 May, 2008 and 19 July 2010.
“In another development, the FCA imposed on Guaranty Trust Bank (UK) Limited a financial penalty of £10,959,700 pursuant to Section 206 of the Financial Services and Markets Act 2000.”
The group said: “As usual, the bank agreed to resolve this matter at an early stage and was given a 30% discount which reduced the fine to £7,671,800.
“The FCA, in justifying this financial penalty, which was paid with customers/investors’ funds not later than 24 January, 2023, stated that Guaranty Trust Bank (UK) Limited again failed to put in place policies and procedures to prevent and detect money laundering.
“FCA considered this repeated misconduct to be a direct result of the inability of the Senior Management within the Bank, over a prolonged period of time, to formulate and implement an effective plan capable of addressing the weaknesses identified in its AML and financial crime systems and controls.”
According to the statement, Guaranty Trust Bank had been suspended in Ghana, a neighbouring West African country, for various breaches of foreign exchange operations.
“Our investigation took us to the Bank of Ghana where we discovered that the Foreign Exchange Trading Licence of Guaranty Trust Bank Ghana Limited (GTB) was suspended for a period of 1 (One) month with effect from 18 March 2024.
“The Press Release dated 4 March 2024 indicates that the said Licence was suspended as a result of various breaches of the Foreign Exchange Market Regulations, including fraudulent documentation in foreign exchange operations.
“By the Press Release, the Bank of Ghana cautioned GTB to put in place effective controls to ensure strict adherence to the extant Regulations and Guidelines,” GICN noted.
The group also wondered in the statement why the GTBank allegedly carried out several infractions in Nigeria without any due sanctions to it.
The organisation stated: “One begins to wonder the number of infractions committed by GTB in its originating country – Nigeria without due sanctions from Regulatory Bodies and Anti-Corruption Agencies.
“We are certain that it is not too late for the Regulatory Bodies and Anti-Corruption Agencies to act by rescuing the soul of GTB. The time to act is now!”
In its recommendations, the group, in the PIR report, recommended that Governor of the Central Bank of Nigeria (CBN) should forthwith dissolve the Board and Management of Guaranty Trust Bank Limited in order to allow thorough investigations into its sundry allegations against the financial institution.
The report also advocated the suspension of Segun Julius Agbaje as Group CEO of Guaranty Trust Holding Company Plc and retrieve from him all files or documents relating to Guaranty Trust Bank Limited to avoid interference with further inquiry into the issues raised in the PIR.
According to the statement, if found guilty of Corporate Governance, the CBN as the banking sector regulator, in conjunction with the Economic and Financial Crimes Commission (EFCC), Nigerian Financial Intelligence Unit (NFIU), Independent Corrupt Practices and Other Related Offences Commission (ICPC), Nigeria Police Force and Department of State Services (DSS) “should deal decisively with Segun Julius Agbaje and prosecute him like Mrs. Cecilia Ibru, who practically milked the defunct Oceanic Bank Plc dry before the Banks Consolidation era in Nigeria.”
Other recommendations made include that the Nigeria Deposit Insurance Corporation (NDIC), Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE) as well as Financial Reporting Council of Nigeria (FRCN) “should urgently step into the affairs of Guaranty Trust Bank Limited with a view to safeguarding customers/investors’ funds and portfolios before the Bank fails completely.”
The statement equally recommended the Nigerian Senate Committee on Banking, Insurance and Other Financial Institutions (OFIs), House of Representatives Committee on Banking as well as House Committee on Banking Regulations should jointly or individually convene a Public Hearing, where at Segun Julius Agbaje will be summoned to appear and defend the ‘weighty allegations’ contained in our Private Investigation Report (PIR).”
GICN also urged the UK National Crimes Agency (NCA), Crown Prosecution Service (CPS), Financial Conduct Authority (FCA), Financial Ombudsman Service, British Prime Minister, Governor Bank of England, US Department of Justice, US Securities and Exchange Commission, Federal Bureau of Investigation (FBI), US Federal Reserve Board (FRB), British High Commissioner to Nigeria and Governor Bank of Ghana to shut down all operations of Guaranty Trust Bank (GTB) in their territories.
“By so doing, GTB will be prevented from turning the United Kingdom, United States of America and Ghana into a safe haven for money laundering, terrorism financing and other sundry economic crimes.”
The statement noted: “That in addition to the above, UK National Crimes Agency (NCA), Crown Prosecution Service (CPS), US Department of Justice and Federal Bureau of Investigation (FBI) are requested to commence prosecution of Segun Julius Agbaje in line with appropriate laws for all the infractions he has used GTB to commit within the territories of both United Kingdom and USA.”
