N11bn fraud allegation: eTranzact MD resigns, hands over to CFO

Over the alleged involvement in N11 billion fraud, the Managing Director, eTranzact International Plc, Mr. Valentine Obi has stepped down and hand over the affairs of the company to its Chief Financial Officer (CFO), Mr. Niyi Toluwalope.

It was report on Tuesday that the Central Bank of Nigeria (CBN) asked, Obi, and two executive directors, Sulivan Akala and Ike Eze of e-Transact an electronic payment platform, to resign following allegations of N11 billion fraud perpetrated on its platform by one Michael Obasuyi, CEO of Platinum Multi-Purpose Cooperative Society Limited against a major Nigerian bank.

The N11 billion fraud allegation comes from a petition written in March 2018 by Michael Osasogie Obasuyi, who is also the managing director of Smartmicro Systems Limited, to the Economic and Financial Crimes Commission (EFCC) against a mobile and electronic company provider.

A statement from the EFCC in April 2018 disclosed that the company implicated in the petition had also written a counter-petition against Smartmicro and Obasuyi, thereby leading the Commission to begin investigations into the activities of Obasuyi.

However, the company in a statement signed by its company secretary, PAC solicitors to The Nigerian Stock Exchange (NSE) on Tuesday said, “eTranzact International Plc wishes to inform its esteemed shareholders, stakeholders, The Nigerian Stock Exchange (NSE) and the general public that it will be making significant changes to the Company’s management team.

“Mr. Valentine Obi, Managing Director of the company will be stepping down and Mr. Niyi Toluwalope will be taking over as the Managing Director in the acting capacity. Until his appointment, Mr. Niyi Toluwalope was the Chief Financial Officer, a position he has held since 2011. Other executive positions affected by the management changes are; Executive Directors, Mr. Sullivan Akala and Mr. Ike Ezel Chief Technology Officer, Mr. Richard Omoniyi and head of operations, Mr. Kehind Segun.

“eTranzact is aware of a recent media publication about these management changes and wishes to announce that the changes are strictly eTranzact Board’s decision and would be like to advise all its stakeholders that it is working closely with the regulators, and all other relevant stakeholders to resolve any issue related to or arising from the management changes.

“In addition, we want to categorically state that eTranzact executives had honorably step down because the reported fraud happened under their watch and not for their personal indictment.

“Also, there is no truth about PrincewaterhouseCoopers (PwC) or Ernest & Young reviewing the Accoutns of the company.

“eTranzact retain PwC from time to time for various technology related assignments and none has to do with reviewing the company’s accounts,” the statement added.

It was also alleged that the company configured an additional outbound fund transfer solution called “Fundgate” in 2017, which required Smartmicro to maintain a pre-funded settlement account with a first generation bank for settlement of account it had initiated.

Obasuyi later confessed to EFCC in his statement to the commission to having committed the crime, stating that he created fraudulent and imaginary monies through the aid of Fundgate financial application from the company.

“Part of the money has been recovered,” the source said. The EFCC statement confirmed that the sums of N2,903,737,563.92, $37,992.87 and €18,538.09 found in Obasuyi’s accounts in various banks in the country were recovered.

“However, several watchers are also thinking that CBN has not been fair to e-Tranzact because they were not the perpetrator of the fraud.”

It also spotlights the question the CBN needs to address – what are the risk management frameworks in places like e-Tranzact, NIBSS, Interswitch and SystemSpecs? This becomes necessary as the companies become big players whose misdeeds can have systemic impact on the economy.

e-Tranzact is one of the switching companies in Nigeria with reputable shareholders like Access Bank, Ecobank, Meristem and Africa Capital Alliance. Nevertheless, the company has at various times been at the receiving end of CBN punishment for flouting financial rules. In 2016, for instance, the company was fined N500 million.

Photo caption: Mr. Niyi Toluwalope, Acting Managing Director/CEO, eTRANZACT