Major International Business Headlines Brief::: 07 March 2022

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Major International Business Headlines Brief::: 07 March 2022 

 


 

 


 <https://www.nedbank.co.zw/> 

 


 

 


ü  Ukraine conflict: Oil price soars to highest level since 2008

ü  TikTok limits services as Netflix pulls out of Russia

ü  Visa and Mastercard suspend Russian operations

ü  Shell defends 'difficult' decision to buy Russian crude oil

ü  Ashneer Grover: Bitter BharatPe feud worries India's booming start-ups

ü  U.S., European allies discuss banning imports of Russian oil

ü  Accounting firms KPMG and PwC to exit Russia

ü  'The shops are gone': How Reliance stunned Amazon in battle for India's Future Retail

ü  Russian banks may issue cards with China's UnionPay as Visa, Mastercard cut links

ü  Indian police arrest NSE stock exchange's former chief

ü  Nigeria: Devastated Delta Oil Community Begins Protest

ü  Nigeria: How Nigerians Struggle to Fix, Replace Faulty Transformers Despite Govt Regulations

ü  Nigeria: Vat - Hotel Owners, FIRS Head for Showdown

ü  South Africa's TFG to buy Coricraft owner for $152 mln

ü  Gold crosses $2,000 mark, palladium at record high on Ukraine crisis

 

 

 

 

 

 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 

Ukraine conflict: Oil price soars to highest level since 2008

Oil prices have soared to the highest level since 2008 after the US said it was discussing a potential embargo on Russian supplies with its allies.

 

Brent crude - the global oil benchmark - spiked to above $139 a barrel, before easing to around $130.

 

Energy markets have been rocked in recent days over supply fears triggered by the Russian invasion of Ukraine.

 

Consumers are already feeling the impact of higher energy costs as fuel prices and household bills jump.

 

Stock markets in Asia fell on Monday, with Japan's Nikkei 2.7% lower and the Hang Seng in Hong Kong down by 3%.

 

On Sunday, the US Secretary of State Antony Blinken said the Biden administration and its allies are discussing an embargo of Russian oil supplies.

 

Later, US House of Representatives Speaker Nancy Pelosi said the chamber was "exploring" legislation to ban the import of Russian oil and that Congress this week intended to enact $10bn (£7.6bn) of aid for Ukraine in response to Russia's military invasion.

 

"The House is currently exploring strong legislation that will further isolate Russia from the global economy," Ms Pelosi said in a letter.

 

The comments came as pressure grows on the White House and other Western nations to take tougher action against Moscow over its invasion of Ukraine.

 

A Russian oil embargo would be a major escalation in the response to the invasion of Ukraine and would potentially have a major impact on the global economy.

 

"While the US might just push through a ban on Russian oil imports, Europe can ill-afford to do the same. More worryingly, [Russian leader Vladimir] Putin, with his back to the wall, could turn off gas supplies to Europe, cutting off the continent's energy lifeline," Vandana Hari at oil markets analysis firm Vanda Insights told the BBC.

 

The price of Brent crude rose by more than 20% last week as the conflict triggered fears of a shortage of oil on the global markets.

 

Consumers around the world have seen costs jump in recent days as they feel the impact of rising wholesale energy prices.

 

On Sunday, the American Automobile Association said that US petrol prices at the pump jumped by 11% over the past week to the highest level since July 2008.

 

In the UK, the average price of petrol has risen above £1.50 a litre, according to the RAC.

 

Meanwhile, a jump in the price of gas amid the Ukraine conflict has added to worries that annual UK household energy bills could reach £3,000.

 

In recent days, the cost of gas in Europe and the UK has hit record levels as fears persist that Russian supplies could be reduced.

 

On Sunday, energy giant Shell defended its decision to purchase Russian crude oil despite the invasion of Ukraine.

 

The company said in a statement that the decision to purchase the fuel at a discounted price was "difficult".

 

It confirmed that it had bought a cargo of Russian crude oil on Friday but it had "no alternative".

 

Ukrainian Foreign Minister Dmytro Kuleba hit out at the energy company, asking on Twitter: "Doesn't Russian oil smell Ukrainian blood for you?"

 

It came as global brands continue to cut their ties with Russia over the conflict.

 

At the weekend, video-sharing app TikTok said it had suspended livestreaming and new content from its platform in Russia as it assesses tough new laws to crack down on "fake news" about the country's armed forces.

 

Meanwhile, streaming giant Netflix said it had cut its services in the country following its invasion of Ukraine.-BBC

 

 

 

TikTok limits services as Netflix pulls out of Russia

Video-sharing site TikTok and streaming giant Netflix have limited and cut their services respectively in Russia following its invasion of Ukraine.

 

TikTok said it had suspended live streaming and new content from its platform as it assesses tough new laws to crack down on "fake news" about Russia's armed forces.

 

Netflix said it was pulling out in protest at the invasion.

 

Visa, Mastercard and PwC also joined the list of western firms cutting ties.

 

TikTok, which has around 36 million users in Russia, said its move was about ensuring the safety of its staff and users.

 

Since Friday, anyone who writes news deemed false about the military could face up to 15 years in jail.

 

Among other things, the Kremlin objects to the conflict being called a war, instead calling it a "special military operation".

 

The BBC and other news outlets have already stopped reporting in Russia, saying they can no longer be independent.

 

In a series of Tweets, TikTok said: "In light of Russia's new 'fake news' law, we have no choice but to suspend live-streaming and new content to our video service while we review the safety implications of this law.

 

"Our in-app messaging service will not be affected."

 

It added: "We will continue to evaluate the evolving circumstances in Russia to determine when we might fully resume our services with safety as our top priority."

 

Chinese-owned TikTok, which has one billion users worldwide, has been criticised for not speaking out against Russia invading Ukraine, unlike its peers Meta, which owns Facebook and Instagram, and Twitter.

 

But in a longer statement on its website on Sunday, it described the war in Ukraine as "devastating", adding that it had "brought pain to our community and our people".

 

TikTok says it "doesn't break down user numbers by country" but we know that Russia is one of the company's top territories.

 

It's thought that around 36m people use the app and TikTok's new rules reduce them to spectators of other people's content.

 

TikTok says it's making the move to protect its users from breaking Russia's new "fake news" laws.

 

But it will no doubt help the company too.

 

Moderating social networks during times of crisis is hard enough, but having to vet content under the new draconian laws in Russia puts all platforms in a tough position.

 

I wouldn't be surprised if other apps took similar measures to protect themselves.

 

Russia has many high-profile creators who make their living from TikTok so we can expect even more people to be motivated to protest themselves against the "fake news" laws.

 

The Kremlin may also lose out in the information war too with less pro-Russia content on people's timelines.

 

Presentational grey line

Last week, Netflix temporarily stopped all future projects and acquisitions in Russia as it assessed the impact of Moscow's invasion of Ukraine.

 

But on Sunday, a spokesperson said: "Given the circumstances on the ground, we have decided to suspend our service in Russia."

 

The firm launched in Russia in 2016 and only has 1 million subscribers there - a fraction of the 220 million it has worldwide.

 

But according to Variety magazine, the streaming platform - which operates in a joint venture in the country with Russia's National Media Group - had four Russian originals in the works.

 

That includes the crime thriller series Zato, which was shooting and has since been put on hold.

 

A host of companies have suspended their operations in Russia since it attacked its neighbour, including Apple, Jaguar Land Rover, H&M and Burberry. Many other firms are reviewing their positions, while some are looking to offload stakes in Russian ventures.

 

On Sunday, two of the Big Four accounting firms KPMG and PricewaterhouseCoopers LLP (PwC) said they would no longer have a member firm in Russia because of the invasion.

 

Visa, Mastercard and American Express also suspended operations in Russia, although the country's banks played down the impact on consumers.-BBC

 

 

 

Visa and Mastercard suspend Russian operations

Visa, Mastercard and American Express have announced they will suspend all operations in Russia in protest at its invasion of Ukraine.

 

But Russia's major banks have already downplayed the impact the move will have on consumers.

 

Shoppers will still be able to use the cards for purchases within Russia until they reach their expiry dates.

 

But Visa, Mastercard or American Express cards issued abroad will no longer work at shops or ATMs in Russia.

 

Clients will no longer be able to use their Russian cards abroad or for international payments online either.

 

Visa and Mastercard alone control about 90% of credit and debit payments in the world, outside of China.

 

 

Earlier, Russia's central bank insisted that all Visa and Mastercard bank cards issued by Russian banks would continue to operate normally on Russian territory. That is because domestic payments in Russia are made through a national system and don't depend on foreign systems.

 

Russia's biggest state-backed bank, Sberbank, said its cards would still work "to withdraw cash, make transfers using the card number, and for payment at offline as well as at online Russian stores".

 

Since 2015, the Russian government has required all domestic payment transactions in the country be processed there. This followed similar suspensions of operations by Visa and Mastercard in Crimea, following its annexation.

 

Several Russian banks suggested that they would start issuing cards that use the Chinese UnionPay system, coupled with Russia's Mir payment network, to avoid any impact for consumers.

 

Farida Rustamova, an independent journalist who left Russia because of the invasion, criticised Visa and Mastercard's decision, saying it would cut off people like her from much needed funds.

 

She told the BBC she had raced to withdraw cash following the news as she hasn't set up a foreign bank account yet, and many others face the same problem.

 

"Now thousands of people, including not only journalists but opposition activists and even common people who are scared of Putin's regime and are running from war will be cut from their little money.

 

"And the sad thing is this is exactly what Putin wants to happen."

 

Both Visa and Mastercard had already announced that they would comply with sanctions introduced by Western countries since the start of the conflict.

 

"This war and the ongoing threat to peace and stability demand we respond in line with our values," said Visa boss Al Kelly.

 

In a statement, Mastercard also described the ongoing invasion of Ukraine as "shocking and devastating".

 

The card company has operated in Russia for more than 25 years. It confirmed that it would continue to pay the wages of its 200 staff members there.

 

Visa added: "We regret the impact this will have on our valued colleagues, and on the clients, partners, merchants and cardholders we serve in Russia."

 

It would not disclose how many Visa cards are in operation in Russia.

 

American Express called Russia's attack on Ukraine "unjustified" and said it was also terminating all business operations in Belarus.

 

US President Joe Biden "welcomed the decision" during a phone call with Ukrainian leader, Volodymyr Zelensky, according to a White House readout.

 

'Adding to financial turmoil'

Susannah Streeter, senior markets analyst at Hargreaves Lansdown, pointed out that the move came after the disconnection of Russian banks from the Swift international payments system and a dramatic plunge in the rouble.

 

"Bank customers in Russia may be able to keep using the cards until they expire, but the boycott means Russians abroad will see their payments rejected, with the shutting out of some big spenders also likely to hurt a raft of businesses reliant on their custom," she said.

 

She added that China's UnionPay is likely to be the alternative "system of choice" for Russian banks as it's already accepted around the world, although not as widely as Visa and Mastercard.

 

"But it will take significant time to re-issue millions of cards, and will add to the financial turmoil in the country."

 

The payments giants' announcement comes amid a widening corporate backlash to Russia's actions in Ukraine.

 

Inditex-owner Zara and French fashion houses LVMH, Kering and Chanel have all said in recent days that they would stop sales temporarily in Russia.

 

PayPal also said on Saturday that it had shut down services in Russia but that it would support withdrawals "for a period of time".

 

This would ensure that account balances were dispersed "in line with applicable laws and regulations", it said.

 

The Ukrainian government had been calling on PayPal to quit Russia and help its officials with fundraising.-BBC

 

 

 

Shell defends 'difficult' decision to buy Russian crude oil

Shell has defended its decision to purchase Russian crude oil despite the invasion and bombardment of Ukraine.

 

The oil giant said in a statement that the decision to purchase the fuel at a discounted price was "difficult".

 

It confirmed that it had bought a cargo of Russian crude oil on Friday but it had "no alternative".

 

Ukrainian Foreign Minister Dmytro Kuleba hit out at the energy company, asking on Twitter: "Doesn't Russian oil smell Ukrainian blood for you?"

 

So far Western countries have not imposed sanctions on Russian oil imports, fearing it will drive up already record high energy prices around the world.

 

But on Sunday, US Secretary of State Antony Blinken said the US was now in "active discussions" with European partners about banning them while also maintaining a "steady global supply".

 

Russia is the world's second top producer of crude oil after Saudi Arabia, and supplies about a third of Europe's needs.

 

I am told that Shell discretely bought some Russian oil yesterday. One question to @Shell: doesn’t Russian oil smell Ukrainian blood for you? I call on all conscious people around the globe to demand multinational companies to cut all business ties with Russia.

 

Commenting on its move, Shell said it was forced to buy oil from Russia in order to maintain timely supplies of fuel to Europe.

 

The firm said it remains "appalled by the war in Ukraine" and has stopped most activities involving Russian oil, but it added the situation with supplies is "highly complex".

 

Russian oil currently makes up about 8% of Shell's working supplies. One of the firm's refineries, which produces diesel and petrol and other products, is also among the biggest in Europe.

 

"To be clear, without an uninterrupted supply of crude oil to refineries, the energy industry cannot assure continued provision of essential products to people across Europe over the weeks ahead," a spokesperson said.

 

"Cargoes from alternative sources would not have arrived in time to avoid disruptions to market supply.

 

"We didn't take this decision lightly and we understand the strength of feeling around it."

 

The firm also said that it will try to choose alternatives to Russian oil "wherever possible", and that profits from Russian oil will go to a dedicated fund aimed at helping people in Ukraine.

 

It comes shortly after the company announced that it would end all of its joint ventures with the Russian energy company Gazprom following the invasion.

 

That will involve the company selling its 27.5% stake in a major liquefied natural gas plant and a 50% stake in two oilfield projects in Siberia.

 

It will also end its involvement in the Nord Stream 2 pipeline between Russia and Germany. The 1,200km pipeline under the Baltic Sea had already been put on hold by German ministers.

 

In a statement issued on Monday, Shell said that it expected the move, which will also apply to any "related entities" to Gazprom, would be worth about $3bn (£2.2bn). The associated costs will be marked on its balance sheet later this year.

 

Shell followed on from the likes of BP, which had already announced that it would offload its stake in the Russian state-owned oil giant Rosneft - a potential hit of $25bn.

 

BP said earlier this week it was too soon to say how or to whom its stake in Rosneft would be sold.

 

Norwegian oil and gas producer Equinor has also announced its exit from Russia, saying the conflict made its current position "untenable".-BBC

 

 

 

Ashneer Grover: Bitter BharatPe feud worries India's booming start-ups

The resignation of a high-profile Indian entrepreneur from the company he co-founded has led to worry in the country's booming start-up sector.

 

Ashneer Grover, founder of at least two unicorns - tech start-ups valued at over $1bn - resigned last week as managing director of BharatPe, one of India's most prominent fintech companies, after a public fallout with the board of the company he founded.

 

Mr Grover's abrasive behaviour as a judge on Shark Tank India - the Indian version of the reality show where aspiring entrepreneurs pitch their ideas to a panel of investors - had made him a talking point since December.

 

But in January, he came under intense media scrutiny after a leaked phone conversation led to allegations that he had abused a bank employee for failing to secure funds so he could invest in the public share sale of beauty start-up Nykaa.

 

Since then, BharatPe's board has accused him of misappropriating funds and siphoning off company money to pay for a "lavish lifestyle" - charges Mr Grover has denied.

 

In his scathing resignation letter, he accused the company's investors of making him the "villain of the piece".

 

 

"You treat us founders as slaves - pushing us to build multi-billion-dollar businesses and cutting us down at will," Mr Grover said in his letter.

 

The BBC spoke to corporate experts, who said Mr Grover's case - where there are allegations of fraud - is an aberration in India's start-up ecosystem. But it's only the latest in a series of ugly public spats involving the country's start-up entrepreneurs and investors.

 

A few years ago, realty search portal Housing.com's Rahul Yadav famously told his board that they weren't "intellectually capable" of sensible discussion. Since then, big start-ups such as Ola and Flipkart have seen founders battle investors for control.

 

In this picture taken on December 29, 2021, a woman walks past a store for beauty products platform Nykaa in Mumbai.

 

 

India's start-up ecosystem has become a high-stakes game - thanks to a gush of liquidity around the globe, start-ups in India raised a record $28bn last year, birthing 43 new unicorns and making overnight millionaires of several internet entrepreneurs.

 

But the dizzying valuations and furious deal-making are causing tensions between founder-entrepreneurs, investors and boards.

 

"There will be friction, as more and more money is raised and the founders' stake goes down," says TV Mohandas Pai, chairman of venture fund Aarin Capital.

 

But in most cases, he insists, founders and investors have their interests aligned.

 

"Sometimes they [founders] think that they can do what they want, despite retaining only a minority stake. That's all right when you are alone. But you need to change your practices when the roles reverse, as they increasingly are," says Mr Pai, whose fund is an early investor in ed-tech giant Byju's, India's most valuable start-up.

 

Indian tea start-ups search for an exotic edge

Nithin Kamath, founder and CEO of Zerodha, a brokerage firm that has not raised private equity yet, says it's natural for founders to start feeling "short-changed" when their stakes get too diluted - which he cautions against.

 

"They need to have more skin in the game. Single-digit shareholding, where most start-up founders eventually end up at, is like being an employee, in terms of being able to run the business," Mr Kamath says.

 

This may not always be possible - investors, chasing handsome returns, also often replace founders when companies reach a certain scale, to "get people of their choice on board", says Mitu Samar Jha, a reputation consultant who advises a number of entrepreneurs.

 

The controversy surrounding Mr Grover has also put the spotlight on the broader issues with India's "start-up culture" - critics say this includes compromised governance standards, a toxic work environment and the phenomenon of founder-entrepreneurs assuming an increasingly boisterous public persona.

 

"This brashness, especially among entrepreneurs who've successfully raised money, comes from a belief that they have 'arrived'," says Ms Jha. "But little do they realise that they are growing on someone else's money, and that someone will question them."

 

At least three top PR consultants told the BBC on condition of anonymity that they have had to terminate client relationships with major unicorns recently because of behavioural problems.

 

"Their demands are often unreasonable, and they don't value our advice," said one executive.

 

Another complained of abusive behaviour and an inability to take "no" for an answer.

 

"A company's culture filters down to people at all levels. People down the ladder start exhibiting the same aggressive personality of the leader at the helm," he added.

 

Experts say many aspects of business culture have been compromised because of the availability of an abundance of capital, and a push to grow at any cost.

 

"Valuations have taken precedence over values," says Shriram Subramanian, who heads an independent corporate governance research and advisory firm. He believes ethics, business processes and culture are all deemed secondary to hyper-growth, and this attitude is often encouraged by private equity players. "Even if they don't actively encourage it, they don't condemn such behaviour."

 

Over time, as capital dries out and the frenzy is tempered, attitudes will change, believes Mr Subramanian.

 

Other experts also point to the fact that start-up culture everywhere around the globe is inherently driven by young people who have to adjust to shorter grooming times and quicker learning curves than traditional corporations. They also bypass governance rules applicable to listed companies, such as the need to have independent directors.

 

"These mechanisms must be brought in after the companies have found their product market fit," says K Ganesh, a serial entrepreneur and angel investor who founded one of India's largest online grocers, Bigbasket.

 

Some believe accountability will improve as more start-ups raise public funds through the stock markets - though the process may be painful.

 

"You can't change gears suddenly," says Mr Kamath. "The skill sets required to run a privately held company are different from those required to run a large public company. It is like playing Twenty20 vs a Test cricket match."-BBC

 

 

 

U.S., European allies discuss banning imports of Russian oil

(Reuters) - The United States and European allies are exploring banning imports of Russian oil, U.S. Secretary of State Antony Blinken said on Sunday, and the White House coordinated with key Congressional committees moving forward with their own ban.

 

Europe relies on Russia for crude oil and natural gas but has become more open to the idea of banning Russian products in the past 24 hours, a source familiar with the discussions told Reuters on Sunday.

 

Meanwhile, U.S. House of Representatives Speaker Nancy Pelosi also said in a Sunday letter that the chamber is "exploring" legislation to ban the import of Russian oil and that Congress intends to enact this week $10 billion in aid for Ukraine in response to Moscow's military invasion of its neighbour. 

 

The White House is also talking with the Senate Finance Committee and House of Representatives Ways and Means Committee about a potential ban, the source said.

 

Still, Blinken also stressed the importance of maintaining steady oil supplies globally.

 

"We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil," Blinken said in an interview on NBC's "Meet the Press" show.

 

Blinken, who is on a trip across Europe to coordinate with allies the response to Russia's invasion of Ukraine, also said he discussed oil imports with President Joe Biden and his cabinet on Saturday. 

 

Japan, which counts Russia as its fifth-biggest supplier of crude oil, is also in discussion with the United States and European countries about possibly banning Russian oil imports, Kyodo News reported on Monday. 

 

Asked about a potential embargo on Russian oil imports at a regular news conference on Monday, Japan's top government spokesperson Hirokazu Matsuno declined to comment on its communication with the United States.

 

Oil prices , have soared over the past week after the United States and its allies sanctioned Russia over the invasion.

 

A bipartisan group of U.S. senators introduced a bill on Thursday to ban U.S. imports of Russian oil. The bill is getting fast-tracked and could ultimately become the vehicle for the sanctions.

 

After Russia invaded Ukraine, the White House slapped sanctions on exports of technologies to Russia's refineries and the Nord Stream 2 gas pipeline, which has never launched.

 

So far, it has stopped short of targeting Russia's oil and gas exports as the Biden administration weighs the impacts on global oil markets and U.S. energy prices.

 

Asked if the United States has ruled out banning Russian oil imports unilaterally, Blinken said: "I'm not going to rule out taking action one way or another, irrespective of what they do, but everything we've done, the approach starts with coordinating with allies and partners," Blinken said.

 

He said there were a series of additional measures that the United States was looking at to increase the pressure on Russia, but he did not provide any details on what the new measures would be.

 

Americans are by far the world's heaviest consumers of gasoline, thanks to big cars, long driving distances and little public transportation in many areas. Rising gas prices have traditionally been political poison for U.S. leaders.

 

The U.S. national average for a gallon of gasoline hit $4.009 on Sunday, the highest level since July 2008, according to AAA. Consumers are on average paying 40 cents more than a week ago, and 57 cents more than a month ago.

 

The United States imported more than 20.4 million barrels of crude and refined products a month on average in 2021 from Russia, about 8% of U.S. liquid fuel imports, according to the Energy Information Administration (EIA).

 

The Thomson Reuters Trust Principles.

 

 

 

Accounting firms KPMG and PwC to exit Russia

(Reuters) - Two of the Big Four accounting firms KPMG and PricewaterhouseCoopers LLP (PwC) on Sunday said they will no longer have a member firm in Russia due to the country's invasion of Ukraine.

 

The auditing and consultancy giant KPMG said its Russia and Belarus firm will leave the KPMG network, a move that will affect over 4,500 partners and staff in Russia and Belarus.

 

Separately, PwC agreed PwC Russia will leave its network. The firm has operated in Russia for more than 30 years, and has 3,700 partners and staff there, it said.

 

"As a result of the Russian government's invasion of Ukraine we have decided that, under the circumstances, PwC should not have a member firm in Russia and consequently PwC Russia will leave the Network," PwC said.

 

Sanctions imposed by the U.K., EU and the U.S. on Russia are forcing firms globally to consider whether they should continue working with Russian clients who are state-owned.

 

Earlier Sunday, Britain said it will seek to speed up its sanctions process on Monday via new legislation designed to allow ministers to tighten restrictions on Russian businesses and wealthy individuals. 

 

The Thomson Reuters Trust Principles.

 

 

 

 

'The shops are gone': How Reliance stunned Amazon in battle for India's Future Retail

(Reuters) - At a large Future Retail (FRTL.NS) supermarket in Mumbai last week, workers were unloading hundreds of bright blue grocery crates belonging to India's biggest retailer Reliance.

 

Prospective customers were turned back by security, disappointed at the closed state of the store that still carries the signage of Future's biggest brand, Big Bazaar, but which will likely soon be rebranded as a Reliance outlet.

 

Across India, similar scenes are being played out as Reliance Industries (RELI.NS), India's biggest conglomerate run by Mukesh Ambani, the country's richest man, presses ahead with a shock de facto takeover of prized retail real estate that Amazon.com Inc has been keen to take part-ownership of.

 

The high-profile bitter dispute between corporate titans in which Amazon has sought to block Reliance's planned $3.4 billion purchase of Future Group's retail assets is currently before India's Supreme Court.

 

Reliance's takeover began with utmost stealth on the night of Feb. 25 when its staff began arriving at Future stores. Many in Future's management were in the dark about the plans as store employees from all over the country frantically began to call, according to people with direct knowledge of the matter.

 

"It was tense, everybody was panicking. We didn't know who they were. They wanted access and seniors didn't know about it," a New Delhi Big Bazaar store employee said, describing what happened around 8 p.m. that day.

 

At a Future store in Sonipat town in northern Haryana state, announcements were made asking customers to leave as Reliance seized control, one source said. In Vadodara in western Gujarat, Future employees arriving for work the next morning were asked to go back home with no explanation, said another source.

 

Citing unpaid payments by Future, Reliance has taken control of operations of some 200 Big Bazaar stores and has plans to seize another 250 of Future's retail outlets. Combined, they represent the crown jewels of Future's retail network and around a third of all Future outlets. 

 

Although Reliance had not played a large public role in the legal dispute, it had, according to sources, for some months assumed many of the leases held by cash-strapped Future, India's No. 2 retailer and Amazon's estranged business partner.

 

Reliance's sudden possession of the stores appears to have landed what some analysts are calling a coup de grace that spoils Amazon's chances of untangling the transfer of Future's assets to Reliance. That's despite a series of legal battles won by the U.S. e-commerce giant to date blocking the 2020 deal announced between the two Indian companies.

 

"What will Amazon fight for now?" said a source close to the U.S. company with knowledge of the legal dispute. "The shops are gone."

 

Representatives for Reliance, Amazon and Future did not respond to Reuters queries for this article. Sources asked not to be identified due to the sensitive nature of the dispute.

 

AFTER THE TAKEOVER, TALKS

 

Future Retail said on Feb. 26 it was "scaling down its operations" to cut losses although it made no mention of Reliance in its statement. Future Group as a whole has more than $4 billion in debt.

 

Reliance plans to retain Future's employees at the stores it takes over, sources have said.

 

Amazon, which has a stake in a separate Future Group unit that it argues prevents Future from selling retail assets without its permission, has called the supermarkets and other stores an "irreplaceable" network in a sector worth $900 billion in revenues annually.

 

The legal wrangles had over time become increasingly high-stakes and marked by ugly rhetoric. At one point, Amazon sought for Future Chief Executive Kishore Biyani to be detained in prison for disobeying a legal order. And Future once likened Amazon to Alexander the Great and his "ruthless ambition to scorch the earth".

 

But on Thursday, six days after Reliance's move, Amazon at a Supreme Court hearing unexpectedly called for cordial talks to end the dispute - a proposal Future agreed to.

 

"People have taken over shops ... let's at least have a conversation," Amazon's lawyer Gopal Subramanium said.

 

Discussions are expected to begin soon. 

 

Whatever the outcome of the talks, analysts say Amazon had gravely underestimated Reliance.

 

"If anybody should have seen this coming, it should have been Amazon and they should have prepared against it," said Devangshu Dutta of retail consultancy Third Eyesight.

 

"Clearly, they didn't."

 

The Thomson Reuters Trust Principles.

 

 

 

Russian banks may issue cards with China's UnionPay as Visa, Mastercard cut links

(Reuters) - Credit cards issued by Russian banks using the Visa and Mastercard payment systems will stop functioning overseas after March 9, Russia's central bank said on Sunday, adding that some local lenders would look to use China's UnionPay system instead.

 

Russian-issued Mastercard and Visa cards would be accepted within Russia until their expiry, the bank said,

 

The overseas ban also applies to cards issued by local subsidiaries of foreign banks, the bank said.

 

Its announcement came after U.S. payments firms Visa Inc (V.N) and Mastercard Inc said they were suspending operations in Russia, joining the list of companies that are severing business links with Russia.  .

 

The central bank added that many Russian banks plan to issue cards using UnionPay, a system it said was enabled in 180 countries.

 

While several Russian banks already use UnionPay, others including Sberbank (SBER.MM) and Tinkoff could start issuing cards co-badging Russia's domestic Mir payments system with UnionPay, it added.

 

Thousands of Russians, including holidaymakers, are stranded abroad after many countries closed off their airspace to Russian aircraft while Russia has retaliated with flight bans for many foreign airlines.

 

The central bank advised citizens currently overseas, to withdraw cash before the ban came into force  .

 

The Thomson Reuters Trust Principles.

 

 

 

Indian police arrest NSE stock exchange's former chief

(Reuters) - India's federal police on Sunday arrested the former chief executive of the National Stock Exchange of India in a case related to alleged governance lapses at India's top bourse, a source with direct knowledge told Reuters.

 

Chitra Ramkrishna was arrested in New Delhi, the source at the Central Bureau of Investigation (CBI) said, without sharing further details.

 

The market regulator penalised Ramkrishna, among others, after an investigation that showed she had sought advice for years from an outsider she described as a Himalayan yogi. 

 

The action is the latest sign the CBI is stepping up its investigation of a 2018 case involving allegations that the NSE provided some high frequency traders unfair access to speed up algorithmic trading. The additional scrutiny risks further delaying a planned NSE listing. 

 

Sunday's arrest follows a Feb. 11 order by the market regulator that highlighted lapses at the exchange and said Ramkrishna, who quit as CEO in 2016, was "merely a puppet" of someone she described as a yogi.

 

The Thomson Reuters Trust Principles.

 

 

 

 

Nigeria: Devastated Delta Oil Community Begins Protest

The people of Iwhrekan, an oil and gas producing community in Ughelli South Local Government Area of Delta State, have threatened massive protest over what they termed long years of neglect by oil companies operating in the locality.

 

They said that they have run out of patience and appealed to the federal and state governments to come to the aid of the people and rescue them from health, economic and social challenges due to environmental degradation, including pollution of water bodies and farmlands resulting from oil exploitation.

 

The Iwhrekan people stated this at one-day 'Community Diagnostic Dialogue' held in the community hall at the weekend, organized by Health of Mother Earth Foundation (HOMEF), a non-governmental organisation (NGO), which vowed to partner negatively impacted communities to address environment injustice.

 

 

Speaking on behalf of Iwhrekan community, Elder Victor Onokere, said that although they are host community to ND Western (formerly SPDC) with the first and second phases of the multi-billion dollar Utorogu Gas Plant, the people have nothing to show for it than destroyed fishing water, farmlands, houses and all manner of health challenges.

 

He said that the oil and gas companies have apparently been taking the community for granted because Iwherekan has been too quiet as a peace loving community.

 

Onokere said, "We are calling on the ND Western, they are the people in charge, all these companies we have mentioned today, they are working with them. There are contractors working under ND Western. We will stage a protest for the whole world to hear us, to know what we are suffering here.

 

"Many multi-national companies are coming here, for example Malcolm's Engineering Services; they just finished the second phase of the gas plant. Now we have Lowlem that are working here now, working on the third phase of the gas plant.

 

 

"Pollution is one of the things we experience in this community. Hazard, serious hazard! We drink the gas, we inhale it. If you wash your shirt like I was telling one of your men, just wash your white shirt and put it on the sun in the next 30 minutes you will see that it's already black; and, that black, that carbon, is what we inhale into our system and we don't even have hospital, no health centre in our community. As a community having two to three gas plants here we have no hospital."

 

Pa Onokere further said, "We are the host community to ND formally SPDC. We have the first phase gas plant, which is Utorogun Gas Plant 1, and then we also have the Utorogun Gas Plant 2. Now the third phase is under construction by a company called Lowlem; but in all this, we have nothing to show.

 

 

"In all this, we have nothing to show. The government doesn't recognize us, the company ND Western does not recognize us. Today, we have no functional school as the only one, which is the technical school, is like a ghost yard. When you go there today, you hardly will see any pupil there, because there is no equipment there, no teacher to teach them; these are things we are experiencing.

 

"We are sharing primary school with another community, the only secondary school we have, go there it's like a graveyard. No chairs for the children to sit, there is no teacher to teach them and they say they have given us a technical school, there is no single equipment to show for it. So, we want you to help us talk to the government, talk to those that are concerned to come to our aid because we are suffering."

 

The Executive Director, Health of Mother Earth Foundation (HOMEF), Nnimmo Bassey, assured of the readiness of environment and democracy friendly non-governmental organisations like HOMEF to support media efforts to persistently draw attention to the plights of Iwhrekan and other host communities that suffer so much neglect from appropriate authorities.

 

He lamented the fact that no visible respite has come for the Iwrekan community despite over 15 years of engaging in legal tussle to get the multinational oil companies operating in the area to put an end to degradation of its environment including permanent gas faring.

 

Bassey said, "In 2005, the people of Iwhrekan took Shell to court. It was the first time that we have a case that was successful on the issue of gas flaring. By the end of 2005, I believe it was November 2005, there was a judgement by the high court in Benin-City that gas flaring is illegal, is unconstitutional and against the human rights of Nigeria people. From that time, we have been watching to see whether the gas flaring in Iwhrekan community will stop, but as we speak at this moment it's still going on.

 

"It is even expanding rather than stop. And, that judgement that was given in 2005 was not appealed to or appeal against until recently. In fact, it was in January 2022 that the appeal case was first held. So, you can imagine what has been having. Judgement against identity, against the government and against the oil company for so many years and nothing was done about it.

 

"And, so we are here today to listen to the community people about exactly what their situation is, how they are surviving the case of environmental degradation and in what way their issue have been listened to, and what they believe needs to be done and how.

 

"In this process, we are going to different communities, we are not going to all the gas flaring communities because they are over a hundred communities where this is going on. So, we are dealing with gas flaring, oil spill and also impact of climate change in communities. And, when we come to a place like Iwhrekan, the outcome from here has significance for other communities.

 

"In fact, through the media and through our contact we are going to share what happened here today. And we also have in mind to connect Iwhrekan community to other communities where they have similar problems so they can share experiences directly and also probably come here to visit and see what is going on.

 

"HOMEF is a grassroots organization, we work with communities across the continent of Africa and we don't impose anything on any community. We are here to visit the community. You can't force yourself on any community and we don't do that,"

 

Similarly, the coordinator of 'We the People', a Port-Harcourt based NGO, who is also a researcher with HOMEF, Mr. Ken Henshaw, said, "We are here for community diagnostic dialogue with Iwherekan community, here in Delta State, around the environment of OML-34.

 

"Sometime last year, about November last year, we carried out intensive research on this community and other communities. Basically, to understanding the underlying natural resource issue of this community, specifically coming to terms with how natural resources extraction, oil and gas extraction has affected the community of Iwhrekan.

 

"What we discovered here was devastating. We discovered that, for example, gas is flared here from four different points non-stop for 24 hours; the entire year gas is flared. And, gas flaring alone has significant impact on the community here.

 

"We also discovered, in terms of infrastructure, that if you build a house here in Iwhrekan community, the chances of the house being destroyed within a short space of time is much higher than other part of the country on account of the gas flaring."-This Day.

 

 

 

Nigeria: How Nigerians Struggle to Fix, Replace Faulty Transformers Despite Govt Regulations

Although NERC regulation mandates electricity DISCOs to fund the replacement of faulty electrical assets, desperate Nigerians are sometimes forced to shoulder the costs.

 

When Ololade Fayemi moved into a new apartment in April last year at the Iyana-Ipaja area of Lagos, she did not know that the residents had been living in darkness. A <a target="_blank" href="https://nairametrics.com/2020/10/09/gas-station-explosion-lagos-to-enforce-stiffer-measures-on-operators-blames-negligence/">gas explosion</a> in the area in October 2020 had damaged their <a target="_blank" href="https://en.wikipedia.org/wiki/Transformer">transformer</a> and left them without electricity.

 

 

The 30-year-old, who runs a fashion-designing business in her home, said houses connected to the transformer were told to contribute N10,000 each to repair the transformer.

 

Ms Fayemi said if she had been aware of the power failure, she would have reconsidered her decision of taking the apartment.

 

"This is August (2021), they (agent and landlord) didn't go deeper into the fact that the transformer has not been functional for some months, because I moved here in April and I heard that the light has been having issues since February. I thought it was just a minor issue and it was then that it dawned on me that the transformer was faulty.

 

"As someone into fashion designing you have to iron, you have to use your machine, all manner of stuff and you have to work overnight too. And all these have been hectic for me. It has not been smooth and most of the time when I have plenty of clothes, I pack them. Thank God for my sister who lives not too far from here, I pack the whole clothes to her place to iron. I also charge my power bank, phone, and lamp there."

 

 

She said sometimes she turns on her small generator to charge while she uses a stove iron to work.

 

Who repairs faulty transformers?

 

Nearly a decade after the Nigerian government handed control of a large part of its electricity sector to private investors, the sector still struggles with meeting the power needs of Nigerians.

 

In February, the <a target="_blank" href="https://nerc.gov.ng/">National Electricity Regulatory Commission (NERC)</a> condemned electricity distribution companies forcing customers to buy or repair electricity assets as a condition for the restoration of power supply. The practice, however, has continued.

 

Also, the NERC while stating its "<a target="_blank" href="https://nerc.gov.ng/index.php/home/consumers/consumer-rights-obligations">consumer right and obligation</a>" emphasised that it is "not the responsibility of electricity customers or communities to buy, replace or repair electricity transformers, poles and related equipment used in the supply of electricity."

 

 

According to the commission, some of the obligations of electricity consumers include monthly payment of power consumed, "vigilant protection of electrical installation, cordiality towards electricity workers, ensure that metering and other electrical equipment within your premises belonging to the DisCo are not tampered with, or by-passed, notify the DisCo serving you of any tampering or bypass of electrical installations, notify the DisCo serving you of any outstanding electricity bill before moving into new premises."

 

The commission also stated that the repair or replacement of faulty electrical infrastructure should be <a target="_blank" href="https://nerc.gov.ng/index.php/about/faqs">fixed within 48 hours of official complaints</a>. It, however, noted that where the DisCo is unable to "speedily replace the faulty transformer, residents may go into discussions with the company and agree on the terms of the replacement of the affected transformer if they wish to assume the responsibility of the company."

 

The agency said irrespective of the financial commitment made by the residents, the "equipment purchased and integrated into the electricity system or grid automatically becomes the property of the Electricity Distribution Company (DisCo)."

 

But Sunday Adeyemi, a landlord in Baruwa, Iyana-Ipaja, said following the power outage, they lodged complaints at the DisCo's office but did not get feedback.

 

"When it happened, Baruwa community chairman called them and they checked it and promised to do it. But I was surprised when they used a forklift to pick the transformer to their office and the chairman was not aware.

 

"They asked us to pay N10,000 each to their account, the money is not for the chairman, it is for the DisCo. Once you have made the payment, you will make a photocopy and show it to the chairman as evidence of payment.

 

"And people are responding to the payment. The last time that some residents went there they said the money was over N2 million."

 

Another resident, Oluwaseyi Oyetunde, an engineer, said following the gas explosion, the power supply was "always low voltage" before the final blackout. He lamented that he spends N2,000 daily on fuel to pump water and other activities.

 

The Community Development Area (CDA) chairman, Samuel Fagbemi, said the DisCo, which did not initially respond to their call following the power outage, insisted that they pay up their debts before their electricity is restored.

 

"They said that we should go and pay N3.8 million before they can repair it for us. So, we started pleading with our people, those that are owing them," he said.

 

He said the transformer has been bought but residents are still waiting for the headquarters of the DisCo to provide the electrical cables.

 

On the N10,000 residents were being made to pay, he said only residents owing the DisCo were asked to pay the money.

 

Consumer rights

 

Ejike Chijioke, chairman of Thomas Animashaun Street in Surulere, said they experienced a blackout for almost three months in 2021 - May, June, and July. He said he is aware that it is the responsibility of the DisCos to fix electrical assets. However, he said, they waited for the officials for more than a month to repair their faulty transformer and they did not show up.

 

"Then, we called for a meeting (with residents) for us to discuss ways to resolve the transformer issue, it was against this background that a committee for NEPA (the defunct Nigerian Electric Power Authority) was set up. Then we went to their office to make official complaints, then the manager at Sanya, a senior district manager in the person of Engineer Lawal, came and reinstated the transformer," he said.

 

"When they came, they said they would relocate the transformer from the original base to another base. And based on that, the electricity committee within the residence asked people to contribute N5,000. Later, it was increased to N10,000 per house due to the expenses to be incurred in the process of relocating the transformer."

 

He said although they were not forced to contribute to relocating the transformer, they had to make a financial commitment to hasten the process.

 

"We built the base, fenced it, provided the feeder pillar and one or two things that NEPA required from us which they could not provide immediately," Mr Chijioke said, adding that they are likely to go through the same process should they experience such a blackout again.

 

Clement Edet, a barber in Surulere, described the blackout periods as "hell" for his business. He said in order to retain his customers, he had to charge the same price as his competitors who had power supply.

 

"The DisCo did not even say 'you people should give us time to fix this,'" he said.

 

"They should be the one begging us because we are the consumers and they give us bills and we pay, but these people do not see us as consumers, they see us as fools, whether you like, give them light or don't give them, they will pay," Mr Edet said.

 

"We had a meeting, we can't continue to wait for these people, just as you know, you can't wait for the government, you wake up and solve your problem."

 

Business 'suspended'

 

Nigeria produces an average of 5,000 megawatts of electricity for a population of about 200 million. The country is also Africa's largest economy yet it has one of the world's worst power sectors. At least<a target="_blank" href="https://www.worldbank.org/en/news/press-release/2021/02/05/nigeria-to-improve-electricity-access-and-services-to-citizens"> 85 million</a> citizens do not have access to the national grid, the World Bank said. The global bank also stated that<a target="_blank" href="https://www.premiumtimesng.com/news/top-news/456904-nigeria-businesses-lose-29-billion-annually-to-poor-electricity.html"> Nigeria loses $29 billion</a> annually to power shortages.

 

A fish farmer in Olu Adeyanju Street, Ifelodun community in Ogun State, who identified himself as Adegbenro, is one of the businesses affected by the erratic power supply. He said he had to suspend his farm business due to the constant breakdown of the electrical transformer.

 

"I once had a fish pond but because of the light issues, I can't do it again, coupled with the high cost of petrol, I can't cope, I had to suspend it.

 

"NEPA has just been promising, we went to Ibadan, and Sango here, since then nothing has been done. They (IBEDC) said they have a lot of demand for transformers. So, we decided that each house was going to contribute N20,000 each. We learnt it will cost about N5 million."

 

According to Mr Adegbenro, Ifelodun, Odo-Ogbe, and Igbehinadun communities have been experiencing power outages as a result of their faulty transformer since December 2020.

 

Mathew Babalola, a resident in the Ijako area of Ogun State, said about eight affected streets had contributed money thrice to repair their faulty transformer since December 2020 but it continued to break down. They, therefore, decided to buy a new one.

 

"We wrote a letter to Ibadan DisCo and they said we should make a contribution and everyone has been told to contribute N20,000 and up till now, we haven't resolved it."

 

He mentioned that due to the months-long blackout, he has been staying late in the office to ensure that all his gadgets are fully charged before going home. He added that he sometimes borrows his neighbour's generator to pump water for daily use.

 

Residents of Abaranje in the Ikotun area of Lagos say they have been in darkness since April 2021 because they have been unable to fulfil the N30,000-per-house contribution to fix their faulty transformer.

 

"We have been struggling in darkness," a resident who identified herself as Mama Blessing said.

 

"Is it our responsibility to fix the transformers or the DisCo's?"

 

But the community chairman, Niyi Adeshina, said they were told to pay N30,000 each because they owed the DisCos over N3 million debts.

 

"The transformer exploded and we went to their office. They said we owe N24,900,000, so they said we should pay two million in order to get another transformer but in case we don't have up to that, we should pay 1.4 million for the transformer and another N1.4 million for connection. And people are yet to respond to the payment at the moment," Mr Adeshina said.

 

Fixing the fault

 

According to a consumer rights law expert, Folarin Aluko, it is the responsibility of the DisCos to provide "working and operational equipment" regardless of the debts owed by consumers.

 

"I think that would be a dereliction of duty by the DisCo," Mr Aluko said.

 

"The responsibility imposed by law is not conditional upon the action of anyone."

 

The spokesperson for Ikeja Electric, Felix Ofulue, however, thinks otherwise.

 

Mr Ofulue requested "proof" that some residents fix their faulty transformers on their own.

 

"When customers owe, they need to pay to keep the system working. If they have issues with the bills, escalation processes have been put in place to enable them to contest their bills," he said.

 

"We have remittances to make to the industry. So, if you keep owing us, how do we provide? We are under a lot of pressure, they should pay their bills. There are rules for them, people pay for their DStv, GOtv, this is not a social service."

 

He added that the residents do not necessarily have to pay their full debts, but should pay their monthly payments in full.

 

"What we are saying is for them to pay their current bill, we are just saying pay your monthly bill, not half but full," he said.

 

He also said that the delay in fixing or replacing faulty electrical assets is a result of several requests that they get. He said there is no preferential treatment and problems are solved on a first-come-first-served basis.

 

When PREMIUM TIMES went to the Eko Electricity Distribution Company (EKEDC) office in Surulere to enquire about claims that residents were told to fund the repair of their transformer, the manager referred this reporter to the district head in Orile-Iganmu. However, an official, who asked not to be named, denied the allegations. She said no official would request that their customers contribute towards the repair of faulty electrical assets.

 

She said they promptly attend to consumers demanding repair of faulty electricity assets.

 

At its head office, the EKEDC did not respond to requests for comments.

 

Electricity investment

 

According to the NERC regulation, to address asset arrangement known as the "Regulation for Investment in Electricity Networks 2015", there must be an agreement between customers and the DisCos. The agreement should state the costs and the mechanism for recovery of the investment of customers willing to intervene in the power supply restoration and who may invest in the provision of materials and installation.

 

When PREMIUM TIMES contacted IBEDC, the spokesperson, Busolami Tunwase, said the residents should identify the official who requested that they fix their transformer, adding that "Ijako is in our network," and not Oluadeyanju Street in Sango-Ota. But a copy of the March bill seen by this newspaper had IBEDC on it.

 

Ms Tunwase said community people sometimes pool resources together to fix their faulty transformer, adding that the DisCo's delay in repairing it does not amount to denial.

 

She said it is not in their "culture" to ask customers to contribute to fixing or replacing faulty electrical assets.

 

She also accused some communities of not making formal requests. She said they sometimes get a contractor without the knowledge of their DisCo and the contractors do "shoddy jobs."

 

She urged communities to make an official report of their faulty electrical assets to their office.

 

"Then you will get a response from the IBEDC, then if at some point they ask you to pay, I will know who to hold by the jugular."

 

Meanwhile, the residents had in a letter titled "Request for two new 500KVA transformers," received by the IBEDC Regional Technical Manager in Ogun State on May 5, 2021, appealed for an urgent replacement of their faulty electrical assets.

 

"We are communities known as Ijako in Ado-Odo Local Government Area of Ogun State, with about one thousand inhabitants. Our current Transformer is overloaded and has failed twice," the letter read in part.

 

"Through self-effort, the transformer was repaired twice and has failed due to the overload. We are hereby using this medium to appeal to you to come to our aid urgently for the replacement."

 

'Right to electricity'

 

Mr Aluko, the consumer rights lawyer, said that when the cost of fixing a faulty electricity distribution asset is borne by customers, they have a right to a refund and compensation.

 

He added that "the relationship between the customer and the distribution company is contractual in nature. Customers have rights that are recognised and protected by the NERC Act.

 

"The contractual responsibility to provide and maintain <a target="_blank" href="https://www.premiumtimesng.com/news/more-news/489539-faulty-air-conditioning-system-may-derail-2022-budget-debate-in-house.html">transformers</a> and other distribution equipment is borne by the DisCos."

 

He said it is a breach of the contractual relationship between <a target="_blank" href="https://www.premiumtimesng.com/news/headlines/475743-buhari-embarks-on-two-weeks-trip-to-london-for-summit-medical-check-up.html">customers</a> and DisCos for the customer to fund the repair and management of electrical assets.-Premium Times.

 

 

 

Nigeria: Vat - Hotel Owners, FIRS Head for Showdown

The directive by the Lagos chapter of the Incorporated Trustees of the Hotel Owners and Managers Association to its members to reject a request by the Federal Inland Revenue Services or its agents for collection of Value Added Tax from their businesses has again reignited the endless battle against VAT in the country, writes Festus Akanbi

 

Last week, the Lagos chapter of the Incorporated Trustees of the Hotel Owners and Managers Association (HOMA) directed its members to treat with disdain any request made by the Federal Inland Revenue Services (FIRS) or its agents for collection of Value Added Tax (VAT) from their businesses.

 

 

The HOMA, which is made up of hotels, restaurants, fast food outlets, night clubs, and related hospitality outfits, said it had been resisting since 2018, efforts of the FIRS to levy VAT on the businesses of its members contrary to the judgment of a Federal High Court in Lagos, that declared such levy as illegal, null and void.

 

HOMA's position contained in a statement by the association's President and Director General, Mr. S.O. Alabi and Mr. Adeniyi Ologun respectively titled: "Valued Added Tax Automation: Looming Apparent Injustice on Our Members," noted that the association had been having a running battle with the FIRS in the last four years in regards to the validity of VAT.

 

It stated: "Hence, in the suit filed by our association at the Federal High Court in suit number FHC/L/CS/360/2018, the registered trustees of HOMAL Vs AG Lagos State and FIRS, the issue of the validity of VAT or Sales Tax was brought before the court. In the said suit, the Federal High Court nullified the application of VAT in the hospitality sector. However, an appeal was filed by the FIRS, and subsequently, a stay of execution was granted pending the outcome of the appeal filed."

How It Started

 

Recall that delivering judgment in a suit seeking to restrain the Attorney General of Lagos State from enforcing the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations Law (HORC), 2017, Justice Rilwanu Aikawa of the Federal High Court in Lagos had in 2019 barred the FIRS from enforcing VAT provisions on goods and services consumed in hotels, restaurants and event centres in Lagos State.

 

In the suit, HOMA had argued that VAT Act has covered the field. It, therefore, asked the court to declare that by Section 7, of the VAT Act, the second defendant (FIRS) was the only lawful and constitutional agency charged with the administration and management of consumption tax generally and particularly in Lagos State.

 

 

The Registered Trustees of HOMA had filed an originating summons asking the court to determine "Whether the VAT Act regulating imposition of tax on consumption of goods and services has not covered the field on taxation of goods and services consumed in hotels, event centres, and restaurant in Lagos State.

 

It also asked the court to determine whether, by Section 7 of the VAT Act, the second defendant (FIRS) is not the only lawful and constitutional agency charged with the administration and management of consumption tax generally and particularly in Lagos State.

 

In delivering the judgment, the judge dismissed the suit and held that it was lacking in merit, adding that the plaintiff was obliged to comply with the HORC Law 2009 and the HORC Regulations 2017.

 

The court also raised two issues by herself; On whether the Federal High Court had the jurisdiction to pronounce on the constitutionality of VAT, the court resolved that it has jurisdiction.

 

Aikawa also held that the issue of the powers of the minister to amend the schedule to the Taxes and Levies (Approved List for Collection) Act was not in dispute before the court and so no pronouncement could be made on it.

 

The court in dismissing the originating summons, as lacking merit and resolving the questions and reliefs sought in favour of the first defendant, held:

 

"That consumption tax is not stated in either the exclusive and concurrent legislative list, in the Constitution of Nigeria, therefore, the absence on the concurrent and exclusive lists, puts consumption tax on the residual list, which is within the legislative competence and powers of state governments.

 

"That VAT Act can't cover the field over what the federal government has no power to legislate upon, under the constitution, therefore the determinant factor in the issue of covering the field, is whether there is the power to make the Law. The provisions of the VAT Act relating to consumption tax are inconsistent with the Nigerian constitution.

 

"The Minister of Finance has corrected the anomaly, by including consumption tax in the list of taxes collectible by the state government, therefore, the responsibility for collecting consumption tax lies on the state government.

 

"The provisions of Sections 1, 2, 4, 5 & 12 of VAT Act are in breach of the 1999 Constitution and the plaintiffs are obliged to comply with the HORC Law 2009 and the HORC Regulations 2017.

 

"FIRS are barred from enforcing VAT provisions as it relates to a consumption tax on goods and services consumed in hotels, restaurants, and event centres in Lagos State, " the judgment read.

 

Dissatisfied with the decision, the FIRS proceeded to the Court of Appeal with an appeal and subsequently secured a stay of execution pending the outcome of the appeal filed.

 

Jumping the Gun

 

HOMA lamented that the FIRS instead of ensuring prompt prosecution of the appeal, and knowing that the court had given it the go-ahead to pay consumption tax on goods and services consumed in hotels, restaurants, and event centres to Lagos State by the HORC Law 2009 and the HORC Regulations 2017, appointed Messrs Metro Limited to handle the installation of VAT collection software package on our members' businesses, which would amount to double taxation.

 

Recall that after the judgment of the Federal High Court, the Lagos State Government urged all hotels, restaurants, and events centres operators in the state to respect the decision of the court on the Lagos State Hotel Occupancy and Restaurant (Fiscalisation) Regulations 2017.

 

Judicial Backing

 

The Director, Public Affairs, Lagos State Ministry of Justice, Mr. Kayode Oyekanmi, who signed the statement, explained that the court dismissed the claim of the plaintiffs that "since the VAT by FIRS contains provisions relating to the consumption, it had 'covered the field' and as such, no state law can impose any similar tax."

 

"The judgment stated that Lagos State is the only constitutional and lawful body permitted to assess, impose and collect tax from customers for goods and services consumed in hotels, restaurants, and event centres in the state. The court granted an order of perpetual injunction to restrain the Federal Inland Revenue Service from collecting tax from customers for goods and services consumed in hotels, restaurants, and event centres in Lagos State.

 

"All hotels, restaurants, and events centres managers and operators are hereby enjoined to henceforth comply with the provisions of the Hotel Occupancy and Restaurant Consumption Tax Law and regulations of Lagos State as declared in the judgment of the Federal High Court," Oyekanmi said.

 

HOMA's Directive to Members

 

This perhaps is why HOMA has directed its members to ignore FIRS' directive, adding that any attempt to deploy automated tax administration technology to capture taxes that the court had adjudged not to be legally entitled to collect, will be an aberration and therefore, null and void.

 

Its statement last week read: "Hence, in the suit filed by our association at the Federal High Court in suit number FHC/L/CS/360/2018, the registered trustees of HOMA Vs AG Lagos State and FIRS, the issue of the validity of VAT or Sales Tax was brought before the court. In the said suit, the Federal High Court nullified the application of VAT in the hospitality sector. However, an appeal was filed by the FIRS, and subsequently, a stay of execution was granted pending the outcome of the appeal filed."

 

It stated that given this, it sought legal redress in June 2021 in suit FHC/L/CS/680/2021, adding that the main relief sort in the case is for the court to determine the legality of the proposed software installation.

 

The association, however, expressed surprise that despite the pendency of the case, its members were being invited by the FIRS for debriefing in preparation for the installation of the said software in their respective places of business.

 

The HOMA stated that since it was not unaware of a recent amendment of certain laws on the administration of tax vide the power granted to the FIRS to deploy automated technology to taxable entities, "but our position is that such software can only be deployed to capture taxes which the FIRS are validly entitled to collect."

 

Maintaining the Status Quo

 

The association stated emphatically that, "any attempt by FIRS to deploy automated tax administration technology to capture taxes which court had adjudged FIRS not to be legally entitled to collect, will be an aberration and therefore, null and void."

 

The HOMA said it had been constrained to instruct its lawyers to draw the attention of the FHC, which is currently handling the suit, to caution the FIRS from taking steps that could defeat the reliefs being sought in the court.

 

It said: "The legality of the installation of VAT automated collection software is still pending before the FHC and the court should be allowed to decide appropriately."

 

Capital Market

 

NGX: Engineering Economic Development, Creating Wealth

 

Kayode Tokede writes on the role of the Nigerian Exchange Limited (NGX) in engineering economic development for wealth creation

 

It is often said that the overall growth of an economy depends on how efficiently the stock market performs in its locative functions of capital. This is because when the stock market mobilises savings, it simultaneously allocates a larger portion of the same to firms with relatively high prospects as indicated by their returns and level of risk.

 

The significance of this function is that capital resources are channelled by the mechanism of the forces of demand and supply to those firms with relatively high and increasing productivity thus enhancing economic expansion and growth.

 

Hence, the stock market is regarded as a vital component for economic growth and development as it enables both corporations and the government to raise long-term capital, which allows them to finance new projects and expand other operations.

 

It is worthy to note that NGX - subsidiary of Nigerian Exchange Group Plc (NGX Group), formerly called The Nigerian Stock Exchange (NSE) - facilitated capital raising in 2021 of over N7.13tn across asset classes for both public and private corporations.

 

There has been a steady increase in new issues since 1996 where new issues were valued at N5.85 billion in 1996 but they rose by about 532 per cent to N37.198 billion in 2001. This improved to N61.284 billion in 2002, N180.079 billion in 2003, while the years 2004 and 2005 accounted for N195.418 billion and N552.782 billion respectively before it crossed the trillion naira mark to hit N1.935 trillion in 2007 when the market was at its peak.

 

Nigeria's Securities Market Renaissance

 

It is safe to say that the nation's bourse has undergone a serious renaissance in quite a decade in the legal structure, trading system, clearing, settlement and delivery system, the quantum of listed companies and securities, corporate governance and upward trend in the deployment of technology.

 

Following regulatory approvals from the Securities and Exchange Commission and Corporate Affairs Commission, NSE announced its demutualisation in March 2021 giving rise to NGX Group Plc and its three subsidiaries - NGX, the operating Exchange; NGX Regulation Limited (NGX RegCo), the independent regulatory arm; and NGX Real Estate Limited (NGX RelCo), the real estate company. Precisely, on May 17, 2021, the exchange virtually unveiled its new structure tagged "Stock Africa Is Made Of" to amplify NGX Group's positioning and commitment to the African financial markets as a leading capital market infrastructure provider, connecting Nigeria, Africa and the world, as well as spotlight the growth potential of the African continent.

 

Market Activities

 

Since demutualisation, NGX has recorded major market activities across asset classes. Notable among these transactions is Emzor Pharmaceuticals' N13.7 billion 5-Year Series 1 Fixed rate Senior Unsecured Bond listed exclusively on NGX in April 2021 and is the first public instrument issued by the company. Also notable is BUA Cement's debut listing of an N115 billion Bond issue, the largest of many corporate debt issuances in the history of the Nigerian capital market; the listing by the introduction of NGX Group on the main board of NGX; and the public offer of MTN Nigeria's shares to both institutional and retail participants.

 

On the trading side, the NGX All Share Index (ASI) settled at 42,262.85 basis points with a Year-to-Date return of 4.9per cent as of 24 December 2021, and it is expected that the year will close in the green. Being a multi-asset Exchange, NGX also recorded gains in other asset classes, with the total market capitalisation being N42.05trillon as of the same date. In the fixed income space, capitalisation grew 12.81% from N17.50trillion in 2020 to 19.74trillion in 2021 as a result of increased listing activity from the Federal Government and Nigerian corporates.

 

Furthermore, the value of the securities lending market rose to N513.10million in 2021 up from N95.18million 2020. The breakdown of the companies that pledged the shares shows as Zenith Bank Plc with 77.33 million shares, MTNN with 8.89 million shares, Dangote Sugar with 43 million shares, GTCO with 31.09 million shares and UBA pledging about 45 million shares.

 

Market Engagement

 

As part of its efforts to drive strategic growth in the Nigerian Capital market and provide a vibrant Exchange for corporates across all industries, NGX brought together a cast of leading industry experts to dimension the digital transformation of the financial services space with a keen focus on the Nigerian capital market at its inaugural NGX TechNovation Conference. The virtual event was themed, Technology, Platforms and Markets

 

Speaking during the conference, the Chief Executive Officer, NGX, Mr Temi Popoola, CFA noted, "We are committed to developing innovative solutions that drive, not just internal efficiency at the exchange but that support wider efforts by various stakeholders at ensuring a full digitalisation of the Nigerian capital markets. As such, we are extending our platform competencies in line with our strategic aspirations while leveraging best in class digital innovation to deliver value to our stakeholders and markets."

 

NGX went on to host the first-ever NGX Capital Markets Conference in Abuja where it called for increased collaboration among key players in the nation's economy towards driving productive investments that would accelerate an elevated and digitized capital market. Themed the "The Future Ready Capital Markets; Innovating for Nigeria's Sustainable Recovery" the Conference, brought together leading policymakers, financial experts, business leaders, investors, international development partners and regulators, led by the Vice President, Federal Republic of Nigeria, His Excellency, Professor Yemi Osinbajo, SAN.

 

Sustainability at NGX

 

NGX displayed its commitment to sustainability and fostering the growth of sustainable financial products, which integrate the financial risks and opportunities associated with climate change and other environmental challenges through several programmes.

 

First, NGX collaborated with the International Finance Corporation (IFC) to launch the Nigeria2Equal Peer-Learning Platform and the first-of-its-kind Gender Gap Assessment Report, themed, Gender Equality in Nigeria's Private Sector. The launch of the Peer-Learning Platform and Gender Gap Assessment Report are key milestones of the collaboration between NGX and IFC for the Nigeria2Equal programme. The two- and half-year programme aims to reduce gender gaps in Nigeria's private sector through research and sharing of best practice case studies as part of a Peer Learning Platform, as well as firm-level advisory support to help companies implement gender action plans.

 

Also in collaboration with IFC, NGX hosted the Sustainable Finance Training 2021 where it was revealed that the value of Nigeria's green bonds market has grown to N55.52 billion within 2017 and 2021.

 

New Products and Services

 

In keeping with its strategic aspirations to democratize finance through technology, drive listings growth, improve customer experience and attract new sources of liquidity, NGX has embarked on several market development activities in 2021.

 

Notable among these is the release of the enhanced version of the NGX mobile app, X-Mobile. The app - which was first launched in 2019 in its Beta state - is a dynamic and user-friendly mobile app, designed to enhance investors' participation in the Nigerian capital market. Now accessible in the Google Play Store and Apple iOS Store, X-Mobile provides market participants, especially retail investors, with convenient, faster and real-time access to information about NGX, its listed securities and Trading License Holders.

 

Furthermore, NGX partnered with MTN Nigeria and other capital market stakeholders to deliver the first-ever end-to-end digital offer in the Nigerian capital market. Through technology, NGX was able to facilitate the simple and quick purchase of securities on any mobile device in under three minutes. Certainly, this is a unique opportunity for wealth creation for millions of Nigerians through the capital market and the market anticipates the use of forward-thinking technology for even more ground-breaking transactions.

 

Significant strides have also been made as NGX inches closer to the launch of Exchange Traded Derivatives in the market. The Exchange began its journey to launching ETDs in 2014 with a feasibility study which showed that the Nigerian capital market is indeed ready for the more sophisticated investment products ETDs will introduce. Since then, several milestones have been achieved including the 'Approval-in-principle' from the Securities and Exchange Commission making NGCL the premier Central Counterparty Clearing House (CCP) in Nigeria.

 

Conclusion

 

It has been an exciting launch into the NGX era and the market has certainly begun to reap the benefits of the demutualisation. It would be recalled that The Exchange celebrated 60 years of trading in 2021 and it is evident that the next 60 years and beyond will be built on innovation and agility.-This Day.

 

 

South Africa's TFG to buy Coricraft owner for $152 mln

(Reuters) - South Africa's TFG (TFGJ.J) will buy the owner of Coricraft, Volpes and Dial-a-bed chains for 2.35 billion rand ($152.78 million) as it looks to expand further into the furniture and bedding market, the retailer said on Monday.

 

The acquisition will help TFG reduce its reliance on Asia and other import markets, allowing it to source products locally amid spiralling shipping costs and COVID-19 supply chain disruptions. read more

 

"The transaction is in line with TFG's stated strategy of vertical integration in key product categories, and the continued development of its quick response local manufacturing capability," the clothes, homeware and jewellery retailer said.

 

Local manufacturing helps improve a retailer's lead time, increasing its competitiveness against local and global chains.

 

TFG, also known as Foschini Group, said it is acquiring the shares of Tapestry Home Brands from private equity firm Westbrooke Investments Proprietary Limited, funds managed by Actis, as well as the current and previous management of Tapestry using cash.

 

Tapestry, a vertically integrated designer, manufacturer and omnichannel cash retailer of home furnishings targeting the middle to upper market operates 175 stores across South Africa, Namibia and Botswana.

 

Tapestry's locally manufactured products account for about 47% of its overall net sales, with manufacturing facilities located in Cape Town, Johannesburg and Gqeberha.

 

The value of Tapestry's net assets was 115 million rand as of Feb. 28, 2021, while earnings before interest, tax, depreciation and amortization were 264 million rand, with a profit after tax attributable to the net assets of 34 million rand, TFG said.

 

Following the acquisition, TFG will have nine home consumer brands and four vertically integrated factories.

 

($1 = 15.3820 rand)

 

The Thomson Reuters Trust Principles.

 

 

 

Gold crosses $2,000 mark, palladium at record high on Ukraine crisis

Gold prices scaled the $2,000 level for the first time in 1-1/2 years, as investors rushed to the safety of the metal in the wake of an escalating Russia-Ukraine crisis, while supply disruption fears sent palladium to an all-time high on Monday.

 

Spot gold was up 0.5% to $1,977.89 per ounce, as of 0620 GMT, after scaling its highest since Aug. 19, 2020 at $2,000.69 earlier in the day. U.S. gold futures rose 0.9% to $1,984.40.

 

“Gold will likely find some heavy traffic around the $2,000 level initially, but once it is cleared, assuming no change in the Ukraine situation, it will quickly move to the $2,100 region and on to new all-time highs,” said OANDA senior analyst Jeffrey Halley.

 

Fighting stopped about 200,000 people from evacuating the besieged Ukrainian city of Mariupol for a second day in a row on Sunday, as Russian President Vladimir Putin vowed to press ahead with his invasion unless Kyiv surrendered.

 

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to their highest since mid-March 2021 on Friday.

 

Spot gold may keep rising towards $2,065 per ounce, according to Reuters’ technical analyst Wang Tao.

 

Palladium was up 5% at $3,151.30 per ounce, after hitting an all-time high of $3,173 earlier in the session.

 

Russia accounts for 40% of global production of the auto-catalyst metal, used by automakers in catalytic converters to curb emissions.

 

“We’re looking at a very significant pick-up in concerns around the disruptions with Ukraine seemingly because the conflict is showing signs of broadening,” said Ilya Spivak, a currency strategist at DailyFX, pointing to speculations about more Western sanctions, perhaps even a formal ban on Russian oil imports.

 

Spot silver was flat at $25.65 per ounce, while platinum jumped 1.8% to $1,141.00, hitting a near nine-month high earlier in the day.

 

 

 

 

 


 


 


Invest Wisely!

Bulls n Bears 

 

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INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


Companies under Cautionary

 

 

 


 

 

 

 


ART

PPC

 

 


Starafrica

Fidelity

Turnall

 


Medtech

Zimre

Nampak Zimbabwe

 


 

 

 

 


 <mailto:info at bulls.co.zw> 

 


 

 


DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

 


 

 


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