How Guaranty Trust Bank Engaged in Financial Manipulation, Unsolicited Accounts Opening, Forex Fraud – Report

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Guaranty Trust Bank Plc

Alleges Financial Misconduct, Unsolicited Account Openings, and Forex Manipulations by Guaranty Trust Bank

A recent report has raised serious allegations against Guaranty Trust Bank Limited (GTB), a subsidiary of Guaranty Trust Holding Company Plc (GTCO Plc), accusing it of “unscrupulous, unethical, and criminal activities.” The report, released by the Global Integrity Crusade Network (GICN) and signed by its president, Edwin Omaga, on Friday, claims the bank has been involved in multiple financial irregularities, including unsolicited account openings and forex manipulations.

The Guaranty Trust Bank, led by Segun Julius Agbaje, who has been the Group Chief Executive Officer since August 2021, was founded on July 19, 1990, and licensed to engage in commercial banking in Nigeria and internationally. The bank’s ownership structure consists of 25 billion ordinary shares, with GTCO Plc as the sole shareholder, represented by Agbaje.

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Unsolicited Account Openings

The GICN report alleges that the bank opened accounts for over 10,000 customers without their consent, sourcing personal information such as telephone numbers, dates of birth, and Bank Verification Numbers (BVN). The practice, aimed at increasing the bank’s customer base, was said to breach data privacy laws and expose account holders to potential financial crimes.

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Financial Misrepresentation

The report also accuses GTB of manipulating its financial statements to mislead the public. It claims that the bank declared profits that do not reflect its actual financial performance. GTCO Plc, for instance, announced a profit before tax of ₦1.004 trillion for the period ending June 30, 2024, which the report describes as a fabrication meant to deceive regulatory bodies such as the Securities and Exchange Commission (SEC) and the Financial Reporting Council of Nigeria (FRCN).

The report further suggests that the bank may have inflated these profits through a process called “round-tripping,” where funds are moved between accounts to create the appearance of legitimate transactions. This, the report argues, points to systemic corruption within the bank, which could destabilize the Nigerian financial sector.

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International Sanctions

The report also highlights several international sanctions against GTB. In the United Kingdom, GTB was fined £525,000 by the Financial Conduct Authority (FCA) for failing to implement effective anti-money laundering (AML) controls between May 2008 and July 2010. Additionally, in 2023, the FCA imposed a £7.67 million fine on GTB for similar failures in its AML systems. The report notes that these fines were paid using customers’ funds.

In Ghana, the Bank of Ghana suspended GTB’s foreign exchange trading license for one month in March 2024 due to various breaches of foreign exchange market regulations, including the use of fraudulent documentation.

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Calls for Action

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The GICN report urges Nigerian regulatory bodies, including the Central Bank of Nigeria (CBN), to dissolve the board and management of GTB to allow for a thorough investigation. It also calls for the suspension of Segun Julius Agbaje as Group CEO of GTCO Plc, recommending that the CBN work alongside the Economic and Financial Crimes Commission (EFCC) and other agencies to prosecute Agbaje if found guilty of corporate governance violations.

The report further recommends that international regulatory bodies, including the UK’s FCA and the US Department of Justice, shut down GTB’s operations in their respective territories to prevent further economic crimes.

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Conclusion

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The GICN has called for a public inquiry into the allegations against GTB and demanded that all properties acquired by Agbaje using proceeds of crime be confiscated. The organization emphasizes the need for immediate action to protect the integrity of Nigeria’s financial system and restore public confidence in the banking sector.

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