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Alphabet Reduces Stake in Trading App Robinhood

By
Paul Ugbede Godwin
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0

Alphabet, the parent company of Google, has sold most of its shares in the popular trading app Robinhood, according to a regulatory filing on Friday. The tech giant reduced its stake in Robinhood from 5.2% to 0.6%, a decrease of almost 90%. The sale generated about $1.2 billion in cash for Alphabet, which invested $50 million in Robinhood in 2015.

Robinhood, which offers commission-free trading of stocks, options, cryptocurrencies, and ETFs, has been one of the most popular and controversial apps in the financial sector. The company claims to have over 31 million users, mostly young and novice investors who are attracted by its gamified and user-friendly interface.

However, Robinhood has also faced several regulatory and legal challenges, such as the backlash over its decision to restrict trading of certain stocks during the GameStop frenzy in January, the SEC probe into its payment for order flow practices, and the class-action lawsuits from customers who suffered losses or outages on its platform.

Robinhood is one of the most popular stock trading apps in the US, but how does it compare to other apps in terms of valuation? In this blog post, we will look at some of the factors that affect the valuation of Robinhood and its competitors and see how they stack up against each other.

Valuation is the process of estimating the worth of a company based on various metrics, such as revenue, earnings, growth, market share, and user base. Valuation can also be influenced by external factors, such as market conditions, investor sentiment, and regulatory environment. Different valuation methods can yield different results, so it is important to use multiple approaches and compare them with industry averages and peers.

One of the most common valuation methods is the price-to-sales (P/S) ratio, which divides the market capitalization (the total value of all shares) by the revenue (the amount of money generated from sales). The P/S ratio indicates how much investors are willing to pay for each dollar of revenue. A higher P/S ratio means that investors are more optimistic about the company’s future growth potential, while a lower P/S ratio means that investors are more cautious or pessimistic.

According to Yahoo Finance, as of August 5, 2023, Robinhood had a market capitalization of $11.61 billion and a revenue of $1.5 billion in the trailing 12 months (ttm), which gives it a P/S ratio of 7.60. This is higher than the average P/S ratio of 6.28 for the online brokerage industry, which suggests that Robinhood is valued more favorably than its peers.

However, when we compare Robinhood to some of its direct competitors, we see that it is not the highest-valued app in the market. For example, eToro, which is a global online trading platform that also offers commission-free stock trading and social features, had a market capitalization of $14.4 billion and a revenue of $1.1 billion in 2020, which gives it a P/S ratio of 13.09. This is much higher than Robinhood’s P/S ratio, indicating that eToro is more highly valued by investors.

Another competitor is Webull, which is a US-based online trading platform that also offers commission-free stock trading and advanced tools. Webull does not disclose its revenue or market capitalization publicly, but according to PitchBook, it raised $150 million in a Series C funding round in May 2020, which valued it at $1 billion. Assuming that its revenue was around $100 million in 2020 (based on its user base and average revenue per user), we can estimate its P/S ratio to be around 10.00. This is also higher than Robinhood’s P/S ratio, suggesting that Webull is also more favorably valued by investors.

Of course, valuation is not the only factor that determines the success or failure of a stock trading app. Other factors, such as user experience, customer service, product features, security, and regulatory compliance, are also important to consider. Moreover, valuation can change over time as new information becomes available or market conditions change. Therefore, it is advisable to use multiple sources and methods to evaluate the performance and potential of any stock trading app.

Robinhood is one of the most popular and well-known stock trading apps in the US, but it is not the highest-valued app in the market. Compared to some of its competitors, such as eToro and Webull, Robinhood has a lower P/S ratio, which indicates that investors are less optimistic about its future growth potential. However, valuation is not the only factor that matters for a stock trading app, and Robinhood may have other advantages or disadvantages that affect its long-term prospects.

Alphabet’s decision to sell its stake in Robinhood may indicate that the tech giant is losing confidence in the trading app’s future prospects, or that it simply wants to cash out on its investment and focus on other ventures. Alphabet has been diversifying its portfolio and expanding into new areas such as cloud computing, artificial intelligence, healthcare, and self-driving cars. The company reported a 34% increase in revenue and a 162% increase in net income in the second quarter of 2021, beating analysts’ expectations.

Robinhood, on the other hand, is preparing for its highly anticipated initial public offering (IPO), which is expected to take place in late July or early August. The company plans to sell up to 35% of its shares directly to its own users through its app, a rare and risky move that could boost its valuation or backfire if the demand is low or the price is volatile. Robinhood aims to raise up to $2.3 billion from its IPO and reach a valuation of up to $35 billion, according to its latest filing.

The world of market systems keeps evolving as noted in the recent Fortune Global500 ranking. Indeed, everyone is plotting to move up.

Walmart, which generated $611 billion in sales in 2022, has been sitting pretty as the biggest company on the planet by revenue for 10 years straight. But it needs to watch its back.

Thanks to the Ukraine war’s impact on oil and gas prices and Saudi Arabia’s ability to cheaply pump oil from its immense reserves, Saudi Aramco had a banner year. It narrowly missed the top slot with $604 billion in revenue, up 51% from the year prior. Even more impressively, Saudi Aramco earned $159 billion in net income, racking up the most profitable year ever for a Global 500 company. If the energy industry has another surge like that in 2023, Walmart could get knocked off its perch.

But here’s the thing: Like the leaders of the world’s other giant crude oil producers, the folks at Saudi Aramco are also looking over their shoulders. They know that a global green transition will eventually end their dominance unless they get serious about the alternative-fuel business. That’s one reason why the Saudi government, which controls Aramco, is plowing its profits into green-tech R&D and a host of other industries.

A little further down the list, a different earthquake is underway. Alphabet, which ranks No. 17 on this year’s Global 500, is facing a classic innovator’s dilemma thanks to generative A.I. and a big challenger in the space: Microsoft (No. 30). We previously featured Jeremy Kahn’s story in The Reader on how Alphabet’s Google is scrambling to evolve as its profit-making search business is threatened. (Fortune newsletter)

Relevant Provisions of The 2023 CBN Code of Corporate Governance For Banks in Nigeria

By
Emmanuel Ifeanyi Ogbuka
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0

Finance Law :- Details of the The 2023 CBN Guidelines on Corporate Governance For All Commercial/Merchant/Non-Interest/Payment Service Banks & Financial Holding Companies in Nigeria Part 1 – Objectives, Board Structure and Composition, Board Roles and Responsibilities.

The Central Bank of Nigeria (CBN) on the 13th of July,2023 released a new set of corporate governance guidelines for commercial banks, merchant banks, non-Interest banks, payment service banks and financial holding companies in Nigeria pursuant to its powers granted under the Central Bank of Nigeria (CBN) Act 2007.

These guidelines are also made pursuant to the Nigerian Code of Corporate Governance (NCCG) 2018 which was issued by the Financial Reporting Council (FRC) in 2018 as the single corporate governance code for the country.

The CBN guidelines were made on the heels of the FRC code as a sector-specific set of guidelines for institutions under their regulatory purview. It is these guidelines that will be the main focus of this article, with emphasis on their objectives, application and their most important provisions.

What are the objectives of the CBN Corporate Governance guidelines?

The guidelines are aimed at :-

– Providing additional guidance on the principles, recommended practices and responsibilities contained in NCCG 2018.

– Outlining industry-specific corporate governance standards for banks.

– Promoting high ethical standards amongst operators, whilst enhancing public confidence.

What is the application scope of the CBN Guidelines?

The guidelines as well as this guidelines shall apply to commercial banks, merchant banks, payment service banks and non-interest banks in Nigeria.

What are the most relevant provisions of the guidelines?

The most important provisions of the CBN Guidelines are as follows :-

Board Structure & Composition

– The procedure for appointment to the board shall be formal, transparent and documented in the board charter.

– Members of the board shall be appointed by the shareholders of the bank and approved by the CBN.

– The minimum & maximum number of directors on the board of commercial, merchant and non-interest banks (MNIBs) shall be Seven (7) & Fifteen (15) respectively.

– For Payment Service Banks (PSBs), the minimum and maximum number of directors on the board shall be 7(Seven) & 13(Thirteen).

– The board shall consist of executive and non-executive directors. The number of non-executive directors shall be more than executive directors on the board and its committees.

– The number of independent non-executive directors shall be at least:-

a). 3 for commercial banks with international and national authorisation.

b). Merchant Banks.

c). Non-Interest banks with national authorization.

– 2 independent non-executive directors for Payment Service Banks (PSBs), commercial banks with regional authorisation and Non-Interest Banks (NIBs) with regional authorisation.

– In the case of publicly listed banks, the provisions of the Companies and Allied Matters Act (CAMA) 2020 on the numbers of non-executive directors shall apply.

– In line with NCCG 2018, no board of a bank shall consist of only one gender.

– At least 2 non-executive directors, one of whom shall be an INED, shall have requisite knowledge and experience in innovation financial technology, ICT and/or Cybersecurity.

What are the roles and responsibilities of the board under the guidelines?

– The board is accountable and responsible for the performance and affairs of the bank.

– Members of the board are jointly and severally liable for the activities of the bank.

– The board and its committees shall each have a charter to be approved by the CBN.

– The board shall define and approve the bank’s strategic goals, its short, medium and long-term strategies and monitor implementation by management.

– The board shall ensure a review of the investment policies and strategies of the bank at least once every 3 years and submit same to the director of banking supervision.

– The board shall ensure that there is a business continuity plan(BCP) for the bank.

Finance Law :- Relevant Provisions of The CBN Guidelines on Corporate Governance For All Commercial/Merchant/Non-Interest/Payment Service Banks & Financial Holding Companies Part 2 – Officers of the board, access to Independent Professional Advice, Meetings, Tenures & Remuneration.

This chapter will be looking at the prescribed officers of the board of a bank or Financial Holding Company (FHC) as prescribed by the Central Bank of Nigeria (CBN) as well as their required qualifications, functions, meetings, prescribed tenures and remuneration aa well as access to independent professional advice.

What are the required offices of the board under the CBN Guidelines?

Chairman

– The qualifications and experience of the chairman of the board of a bank shall be as stated in extant guidelines on competency and fit & proper persons for the Nigerian banking sector.

– The chairman shall meet formally with the Non-executive directors (NEDs) of the board at least once every year.

– Where a bank is a member of a financial holding company or FHC, the chairman of the bank shall not sit on the board of FHC in any capacity and vice versa.

Managing Director/Chief Executive Officer (MD/CEO)

– The tenure of the MD/CEO of a bank shall be in accordance with the terms and conditions of engagement with the bank but subject to a maximum period of 12 years.

Deputy Managing Director (DMD) & Executive Director (ED) 

– The tenure of a DMD/ED of a bank shall be in accordance the terms of engagement with the bank but subject to a maximum period of 12 years.

– Where an ED becomes a DMD, an accumulative tenure of 12 years applies and shall not be extended.

– Where a DMD/ED becomes an MD/CEO of the same bank, his/her previous tenure as DMD/ED is not included in computing his/her tenure as MD/CEO.

Non-Executive Directors (NEDs)

– NEDs shall have unfettered access to corporate information from the MD/CEO, DMD, ED, company secretary, Internal auditor and heads of other control functions with direct/indirect reporting lines to the board while access to the other senior management shall be through the MD/CEO.

– NEDs, with the exception of INEDs of a bank shall serve for a maximum of 12 years comprising three terms of 4 years.

– To qualify as a NED in a bank, the proposed NED shall not be an employee of an FI except where the bank is promoted by that FI and the proposed NED is representing the interest of that FI(Financial Institution). 

– In the case of a commercial bank with an NIB(Non-Interest Bank) window, at least 1 NED shall be knowledgeable and/or have experience in the field of Islamic Commercial Jurisprudence.

Independent Non-Executive Directors (INEDs)

– The tenure for INEDs shall not exceed 2 terms of 4 years each.

– An INED shall have sound knowledge of the operations, relevant laws and regulations guiding the banking sector. The INED shall also have proven skills and competencies in his/her field.

– In addition to the requirements of recommended Practice 7 of the Nigerian Code of Corporate Governance 2018, an INED on the board of a bank shall not :-

a). be a former director or employee who has served in the bank at a senior management level;

b). be a former employee below senior management level, within the last 5 years;

c). have any immediate family member as a current employee in senior management positions;

d). have an immediate family member as a former employee of the bank who has served at senior management level in the preceding 5 years;

e). have material relationship with the bank or any of its officers, ACE members (in the case of an NIB) ,major  shareholders, subsidiaries and affiliates, a relationship which may impair the director’s ability to make independent judgments or compromise the directors objectivity in line with corporate governance best practices;

f). provide financial,legal or consulting services to the bank or its subsidiaries/affiliates or has done so in the past 5 years;

g). borrow funds from the bank, its officers, subsidiaries and affiliates;

h). be part or management, executive committee or board of trustees of an institution, charitable or otherwise, supported by the bank;

f). have served previously on the board of its FHC, subsidiary or related entity within the banking group.

– It shall be the responsibility of an INED to notify the board of any circumstance, event, transaction or relationship, which may impair the INED’s continued independence,as soon as such occurs.

– In the case of an NIB, at least one INED shall be knowledgeable and/or have experience in the field of Islamic finance or Islamic commercial jurisprudence.

– No person who has served as a member of the ACE in any bank shall transmit into an INED of the same bank.

Company Secretary

– The functions of a company secretary shall not be outsourced by banks.

– The qualifications and experience of a company secretary of a bank shall be in accordance with the extant guidelines on competency and fit & proper persons in the Nigerian banking sector.

– The role of a company secretary in a CMNIB, shall not be combined with that of the head legal/legal adviser without the approval of the CBN.

– In the case of PSBs, the functions of the company secretary may be combined with that of the head legal/legal adviser.

– The company secretary shall ensure that all board related compliance matters are made available to the Executive Compliance Officer (ECO) in a timely manner.

– The appointment and removal of the company secretary, shall be a matter for the board, subject to ratification by the CBN.

– The company secretary shall report directly to the board and have an indirect reporting line to the MD/CEO.

What are the provisions of the guidelines on access to independent professional advice?

– The bank shall facilitate access to relevant professional advice for its directors and/or board 

committees.

– Requests for independent professional advice by directors and/or board committees shall be a matter for board consideration and approval. The board shall keep proper records of its decisions on such requests.

– The board shall also keep detailed records of the professional advice provided to the concerned directors where the request is granted.

What are the provisions of the guidelines on meetings of a board and its committees?

– The schedule of meetings of the board and its committees shall be approved by the board ahead of each financial year.

– To effectively perform its oversight function and monitor management’s performance,the board and its committees shall meet at least once every quarter.

– Provided that where the remuneration committee is a stand-alone committee, it should meet on need basis st least once a year.

– Im the case of an NIB, the board shall meet formally with the ACE at least once every quarter while for a commercial bank with an NIB window, the board shall meet the ACE formally at the twice in a year.

– The meeting of the board and its committees shall be held at a specified location or virtually if physical meetings cannot be held.

– The quorum for the meetings of the board and its committees shall be 2/3 of members, majority of whom shall be NEDs.

– Every director is required to attend all meetings of the board and its committees that he it she is a member. In order to qualify for reappointment, a director must have attended at least 2/3rd of all board & committee meetings.

– Minutes of meetings of the board and Its committees shall be properly written in English language, adopted by members and signed off by the board/board committee chairman and company secretary, pasted in the minutes book and domiciled at the bank’s head office.

What are the provisions of the guidelines on cumulative tenure of the board?

The cumulative tenure of directors (EDs, DMDs, MDs & NEDs) on the board of the same bank is 24 years as provided by the guidelines and the cumulative period is calculated from the date of first appointment to the board of the bank.

What are the provisions of the guidelines on remuneration of the board?

– The board shall develop a remuneration policy which shall be discussed in the annual report.

– Banks shall align executive and board remuneration to its long-term interests and that of its shareholders.

– Remuneration by banks shall be sufficient to attract, retain and motivate staff. This shall be balanced against the bank’s interest to avoid paying excessive remuneration.

– The board shall approve the remuneration of MD/CEO, DMD, EDs, Senior Management & other employees, while the fees and allowances for the NEDs shall be fixed by the board and approved by shareholders at a general meeting. 

– NED remuneration shall be limited to director’s fees, sitting allowances for board & its committee meetings and reimbursable travel & hotel expenses. NEDs shall not receive benefits, salaries or any other allowances whether in cash or in kind other than those mentioned above.

–  Remuneration of the MD/CEO, DMDs & EDs shall be limited to performance and structured to prevent excessive risk-taking.

– Where stock options are adopted as part of executive remuneration or compensation, the board shall ensure they are not priced at a discount

-Share options shall be tied to performance and subject to the approval of the shareholders at an Annual General Meeting (AGM).

Finance Law :- Relevant Provisions of The CBN Guidelines on Corporate Governance For Commercial/Merchant/Non-Interest/ Payment Service Banks and Financial Holding Companies Part 3 – Risk Management & Internal Audit Functions, Internal Sharia Audit, & Compliance Functions.

This chapter talks about the provisions of the Central Bank of Nigeria (CBN) Guidelines on Corporate Governance regarding for Commercial/Merchant/ Non-Interest/ Payment Service Banks and Financial Holding Companies (FHCs) regarding risk management and internal audit as well as compliance requirements.

What are the provisions of the CBN Guidelines on risk management and Internal audit functions?

Risk Management Functions

– The approved Enterprise Risk Management (ERM) framework of a bank shall clearly describe the roles and responsibilities of the board, the BRMC(Board Risk Management Committee), the Executive Director of Risk , the Chief Risk Officer, Senior Management and Internal Control Functions.

– The qualification and experience of the head of the risk management function shall be in accordance with the extant guidelines on competency and fit and proper persons for the Nigerian Banking sector.

– The board shall ensure that the risk management function is headed by an Executive Director (ED)

– In the case of NIBs(Non-Interest Banks) with regional authorisation and Payment Service Banks (PSBs),the risk management function shall be headed by a senior management officer with relevant qualifications, competence and experience.

– The Chief Risk Officer (CRO) who shall not be below the grade of an Assistant General Manager (AGM) , shall report to the ED Risk who reports to the board.

– The board shall review the effectiveness of the implementation of risk management policies and procedures, at least annually.

– The board shall review the ERM framework at least once in 3 years.

– Banks shall disclose a summary of their risk management policies in their annual financial statements. In the case of a publicly quoted bank, such summary shall be hosted on its website.

Internal Audit Functions

– A bank shall not outsource its internal audit compliance functions.

– The qualification and experience of the head of internal audit shall be in accordance with the provisions of the extant guidelines on competency and fit and proper persons for the Nigerian banking sector.

– The appointment and removal of the head of internal audit shall be the responsibility of the board, subject to CBN’s approval.

– The head of internal audit, who shall not be below the rank of an AGM, shall report directly to the Board Audit Committee (BAC).

– An independent external assessment of the effectiveness of the internal audit function as provided in Recommended practice 18.6 of the Nigerian Code of Corporate Governance 2018, shall be carried out annually and the report submitted to the director, banking supervision department by latest the 31st of May following the end of every accounting year.

What are the provisions of the guidelines on internal Shariah audits?

– NIBs shall have an Internal Sharia audit function headed by an Internal Sharia Auditor (ISA) not below the rank of an Assistant General Manager (AGM). In the case of commercial banks with NIB windows, the head of the internal Sharia audit function shall not be below the rank of a manager.

– The head of the internal Sharia audit function shall provide an independent assessment on the quantity and effectiveness of the NIBs internal control, risk management systems and governance processes as well as the overall compliance of the NIB’s operations with the principles of Non-Interest banking.

– The ISA shall :-

a). Be responsible for determining NPI(if any) and shall ensure its disbursement to charity under the supervision of the bank’s ACE.

b). Ensure that a quarterly report on the disposal of the NPI is duly endorsed by the ACE and forwarded to the director, Banking Supervision Department (BSD), not later than 7 days after the end of each quarter.

c). Report directly to the BAC and indirectly to the ACE.

– The appointment and removal of the ISA , shall be the responsibility of the board in consultation with the ACE, subject to CBN ratification.

What are the provisions of the CBN guidelines regarding Compliance functions?

The guidelines provide that:-

– The ECO shall not combine his responsibility with any income generating activity.

– The ECO shall be responsible for :- 

a) cascading regulatory requirements and expectations (including accountability and responsibility) along control and operational functions, such as audit, risk management, finance, foreign exchange transactions, AML/CFT/CPF  , IT and Cybersecurity.

b). Presenting to the board all regulatory infractions and concerns.

– Banks shall have a Chief Compliance Officer(CCO) who shall not be below the rank of a general manager for commercial and Non-Interest banks with national and international authorization, and an assistant general manager for merchant banks and commercial and Non-Interest banks with regional authorisation.

– The CCO shall have the primary responsibility of monitoring and coordinating the implementation of regulatory requirements as cascaded by the ECO.

– The qualifications and experience of the CCO shall be in accordance with the provisions of the extant guidelines on competency and fit and proper persons for the Nigerian banking industry.

– The appointment and removal of the CCO shall be the responsibility of the board subject to CBN approval.

– The CCO shall report to the board through the ECO

What are the provisions of the guidelines regarding Sharia compliance functions?

– NIBs shall establish a Sharia review/Compliance (SRC) function that conducts regular assessment of the compliance of the NIB’s operations and activities in line with Sharia requirements.

– The Internal Sharia Compliance Officer (ISCO) shall :-

a). At a minimum, identify, measure, monitor and report on Sharia non-compliance risks(SNCR) in the operations of the NIBs on a daily basis.

b). Be responsible for reviewing all financing requests before disbursement to avoid SNCR.

c). Report directly to the CCO and indirectly to the ACE.

d). Not be below the rank of a manager or a lower rank in the case of a commercial bank with an NIB window.

– The appointment and removal of the ISCO shall be the responsibility of the board in consultation with the ACE subject to CBN ratification.

Finance Law:- Relevant Provisions of The CBN Guidelines on Corporate Governance For Commercial/Merchant/ Non-Interest Payment Service Banks and Financial Holding Companies Part 4 – Board Committees, Cooling-off Periods & Whistle-Blowing.

This chapter will be focused on the provisions of the Central Bank of Nigeria (CBN) Guidelines on Corporate Governance For Commercial/Merchant/Non-Interest/ Payment Service Banks Financial Holding Companies regarding board committees, their memberships & functions as well as whistle-blowing and cooling off periods regarding board membership appointments.

Board Committees

– The terms of reference and composition of board committees shall be set out in the board-approved charter for each committee.

– The membership of board committees shall be review and refreshed at least once every 3 years.

– All board committees shall be chaired by Non-Executive Directors (NEDs).  However, the Board Audit Committee (BAC), Board Nomination & Governance Committee (BNGC) and the Board Remuneration Committee (BRC) shall be chaired by INEDs.

– The chairman of the BNGC of an NIB shall be knowledgeable and experienced in Islamic Finance or Islamic Commercial Jurisprudence.

– In addition to the mandatory committees listed in Recommended Practice 11 1.6. of the Nigerian Code of Corporate Governance (NCCG) 2018, the board of any CMNIB shall also establish a Board Credit Committee (BCC) with oversight responsibility on credit matters.

– In the case of a Payment Service Bank (PSB), the board shall in addition to the mandatory committees listed in recommended practice 11 1.6 of NCCG 2018, establish a board committee responsible for Information & Communication Technology (ICT) & Cybersecurity.

– The chairman of the board shall not be in attendance by invitation or or otherwise in any of the board committee meetings.

– The Managing Director/Chief Executive Officer (MD/CEO), Deputy Managing Director DMD Executive Director EDs shall not be in attendance either by invitation or otherwise,at any meeting of the bosrf or its committees, where the remuneration of EDs will be discussed.

– The functions of the Board Risk Management Committee (BRMC) and the Board Audit Committee (BAC) shall not be combined for CMNIBs. This is provided that t at least 1 Non-Executive Director(NED) on the board of the bank shall be a member of both committees concurrently.

– Members of each of the board committee shall appoint one of its members as chairman.

– The establishment of subcommittees of board committees is prohibited.

The Board Audit Committee (BAC)

– The BAC shall consist of NEDs only.

– All members of the BAC of a bank shall be able to read and understand financial statements. At least one member of the BAC shall have relevant professional qualifications and experience in financial and accounting matters.

– At least one member of the BAC of a CMNIB shall be knowledgeable in innovative technology, ICT and/or Cybersecurity.

– In the case of a PSB, majority of the BAC shall be knowledgeable in innovative technology, ICT and/or Cybersecurity.

Board Risk Management Committee (BRMC)

– The BRMC of a bank shall be chaired by a NED and its composition shall include at least 2 NEDs and the ED in charge of risk management.

– In the case of an NIB, the BRMC shall be chaired by a NED and at least one of the NEDs shall have  the relevant qualification and experience in Islamic Finance or Islamic Commercial Jurisprudence.

What do the guidelines say about cooling-off periods?

– An executive (ED, DMD, or MD/CEO) who exits from the board of a bank either upon or prior to the expiration of his/her maximum tenure, shall serve out a cooling period of 2 years before being eligible for appointment as an NED in the same bank, subject to applicable cumulative tenure limits. 

– Where an executive of a banks is appointed to the board of its Financial Holding Company (FHC) in any role, a cooling off period of 3 years shall apply .

– Transmutation of an INED or an ACE in the case of an NIB, into any role in the same bank isn’t permitted.

– A NED shall serve out a cooling period of 2 years beyond being eligible for appointment in any executive role in the same bank.

– No cooling-off period shall apply when any director in a bank is appointed to the board of another bank is appointed to the board of another bank or an FHC outside the bank’s group.

– The tenure of auditors in a bank shall be a maximum period of 10 years, subject to the rotation of audit engagement partners at least once every 5 years. For an audit firm to be reappointed by the same bank, a cooling-off period of 10 years consecutive years shall be observed.

– Subject to the approval of the CBN, there shall be a cooling off period of 3 years  between the retirement of a partner from an audit firm currently auditing a bank and the appointment of such partner to the board of the same bank.

– The governor and deputy of the CBN, the MD/CEO and EDs of the Nigerian Deposit Insurance Corporation (NDIC) and the departmental directors of the CBN and NDIC, shall not be eligible for appointment in any capacity in a bank, until after a cooling-off period as may be prescribed by the board of the CBN or NDIC (as applicable).

What are the provisions of the guidelines on Whistleblowing?

Under the guidelines, banks shall comply with Recommended Practice 19 of NCCG 2018, as well as the provisions of the extant CBN Guidelines For Whistleblowing For Banks and Other Financial Institutions (OFIs) in Nigeria.

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Who Owns the Intellectual Property Rights of a Movie?

By
Stanley Alieke
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0

Let us take a break from intellectual property rights in music and talk about movies a bit: I had to tackle a brief earlier this week that posed the question; Who owns the intellectual property in a movie? The immediate answer to this question will be the producer or that the producers of the movie own the intellectual property rights to the movie but it is not always a straightforward answer, although generally speaking, it is the producer of the movie or the production company that owns that movie that owns the intellectual property rights in the movie but for you to answer you will always have to consider the unique circumstance or the unique facts of each case. 

There are some movies where both the actors and the movie producer co-own the intellectual property rights in the movie, there is even a possibility that an actor in the movie will be the owner of all the intellectual properties in the movie. It all depends on what was agreed upon and drawn up as a contract. 

I am currently working on a movie production contract; the production company wants to feature a Nollywood superstar who is a household name in the industry but due to financial constraints, the producers decided to propose to the actor that he will be a co-owner of the movie since they can not afford to pay him his rate and will be entitled to 10% of the total net profit of the movie.

Since the story is a good story, the actor accepted the proposal and he is also expected to join hands in the promotion of the movie before and after it has been released. In this instance, the actor is a co-owner of the intellectual property rights in the movie together with the producers of the movie. 

For Nollywood movie producers, the world has evolved more than what you think or used to know. Gone are the days when you just poached an actor and paid him or her to come and do a movie for you and that will be it.

Now actors and crew members outside the payment for the movie they got also want to and can legally be co-owners of the intellectual property rights in the movie, they want want more obtuse the immediate payment they got; this could be the case unless there is a contract duly drafted stating that the actor rights and obligations end on the movie shooting ground and since the actor has duly been paid for the movie shoot, he will and cannot claim the rights in the intellectual property of the movie. Nollywood film-makers need to start drawing up a contract with their casts and crews. The contract will specify the obligations and entitlement of a cast or a crew member. 

As for the actors or a crew member too, if you want to be a co-owner of the intellectual property rights in the movie, it is pertinent that you negotiate that with the movie producer and draw up a contract to that effect. 

Tyms Africa Helps Business Owners, CFOs, Accountants Streamline Accounting Processes

By
Ndubuisi Ekekwe
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Last month, they raised significant capital from some Japanese investors. They are growing and adding users at scale. Tyms Africa, a Tekedia Capital portfolio startup, is helping African businesses manage their accounts payable and accounts receivable, along with their bookkeeping and general accounting activities through its Tyms Book product. 

Tyms Book’s all-in-one business financial management suite makes it possible for CFOs or Finance Managers to put the accounting department on auto-pilot, making it possible for the financial book to be closed faster, with real-time reporting and quicker decision-making that impact the organization’s growth and profitability. Across market sectors and segments, customers love Tyms.

When brahim Adepoju, a seasoned software engineer, and Chineye Ochem, a chartered accountant, came to Tekedia Capital, we knew something amazing was coming and we wrote the cheque. To request a demo, go here https://tyms.africa/request-demo. For partnerships, cross-marketing opportunities, integration partnership, etc, read below.

–Press Release

According to research, Nigerian accounting practices are still developing in relation to digitization. When conducting audit procedures, the bulk of audit practices in Nigeria still mainly rely on manual techniques.

Accounting offers financial data on a company or a nonprofit organization. For decision-making, owners, managers, investors, and other interested parties require financial information.

With the fast-growing rate of startups and small businesses rising in Nigeria and Africa at large, most of these business owners ignore the accounting aspect of their business at the early stage while putting more focus on their product development, sales and raising capital or grants. Whereas, the failure of many startups and small businesses has been traced to poor financial management and inefficient unit economics.

The assumption has always been that digital accounting and bookkeeping are needed more by micro-small enterprises whereas the need is higher in small-medium enterprises whose growth and decision-making are being slowed down due to the heavy volume of manual processes taking place in the finance and accounting departments.

Tyms Africa, a Tekedia Capital portfolio startup, is helping African businesses manage their accounts payable and accounts receivable, along with their bookkeeping and general accounting activities through her Tyms Book product. Tyms Book’s all-in-one business financial management suite will make it possible for the CFO or Finance Manager to put the accounting department on auto-pilot, making it possible for the financial book to be closed faster, with real-time reporting and quicker decision-making that impact the organization’s growth and profitability.

Founded in late 2021 by Ibrahim Adepoju, a seasoned software engineer and Chineye Ochem a chartered accountant. Both founders have extensive experience in information technology and financial accounting with experience working and consulting for organizations like PricewaterhouseCoopers International Limited (PwC), Sterling Assets Management and Trustees Limited, PagaTech Limited and a few others.

Tyms Africa, alongside its software as a service, also connects business owners who do not have a finance team with financial advisors and experts who leverage Tyms Book to help the business prepare their financial books, file taxes and get recommendations needed to improve their business performance.

Small business owners, accountants, bookkeepers and CFOs can use Tyms Book to power the following:

  • Quote generation and internal approvals.
  • Invoice generation and payment collection with direct integration with notable payment gateways in Africa such as Paystack and Flutterwave.
  • Recurring invoicing to customers, automatic payment collection, reminders, notifications and automatic receipt generation for customers.
  • Customer management portal and direct communication channel for negotiations and document signing.
  • Vendor purchase orders and bills or invoice management with real-time communication and negotiation channels.
  • Vendors’ automatic and scheduled bill payments.
  • Team expense claims and reimbursement with structured approval workflows.
  • Company budget preparation, approvals, tracking and forecasting.
  • Fixed assets management with real-time depreciation reporting and other computations.
  • Project management is associated with all organizational financial activities.
  • Real-time financial reports preparation such as balance sheets, trial balances, income statements, management reports and a lot more.
  • Bank reconciliation, transaction categorization and automated bookkeeping based on prepared bank rules.
  • Tax filing via a network of advisors and experts.
  • Integration marketplace for apps or startups in human resources, e-commerce, logistics, travels, insurance, payments, communication, lending and accounting industry. To help the finance unit sync with transactions in real time.

Tyms Africa, asides from having a product with top-notched quality and user experience, remains the most affordable and robust accounting system helping African businesses to cut-cost while streamlining their financial operations.

It takes only two minutes to sign up a business on Tyms Book while a demo session can also be scheduled ahead for guidelines and use case clarifications. Businesses using an existing accounting system can easily migrate to Tyms Book with just a single button click and with Tyms Book, businesses can save 40% in accounting system cost.

Tyms Africa has secured hundreds of thousands of dollars in pre-seed investment from notable local and international investors such as Tekedia Capital, Hoaq, SGGrow (Singapore), Azarel and angels like Hiro Mashita, Honda Yuzuru (CEO of Freakout Holdings Inc. Singapore) with a few other family and friends. The team has also participated in Seedstars and Google for Startup non-equity support programs.

Tyms Africa offers attractive recurring revenue sharing to partners such as accounting firms, consultants, sales teams and industry experts when they introduce other businesses to use Tyms Book. Interested parties can reach Tyms Africa via partnership@tyms.africa.

Also, the Tyms Africa integration marketplace is open to cross-selling and integration partnership with other digital platforms in the area of human resources, e-commerce, logistics, travels, insurance, payments, communication, lending and accounting. Interested parties can also reach Tyms Africa via partnership@tyms.africa.

Peter Obi Decries Exit of GlaxoSmithKline (GSK) from Nigeria

By
Samuel Nwite
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Peter Obi, the Labour Party’s candidate in the 2023 presidential election, has expressed his disappointment over the upcoming departure of British pharmaceutical giant GlaxoSmithKline (GSK) from Nigeria after five decades of operation.

He expressed the feeling in the wake of GSK’s declaration to cease its manufacturing of prescription medicines and vaccines within the country.

In a communication submitted to the Nigerian Exchange Limited, the multinational pharmaceutical corporation disclosed its intention to shift to a third-party direct distribution approach for its pharmaceutical offerings.

In response to this development, Peter Obi expressed his sentiments through a tweet on Friday evening. He lamented that the company’s decision to depart from Nigeria is particularly disheartening, indicating a lack of optimism in the country’s potential as a productive business environment.

He attributed these outcomes to the collective mismanagement of our economy over time.
“As a result, millions are losing their jobs and our poverty index is worsening, even though we’re already being perceived as the world’s poverty capital,” he said in the post.

He further noted that “The multinationals that are leaving our country have not only created jobs but have created immeasurable training that contributed immensely to our human capital development over the years.

“Now they are leaving our shores one after the other. GSK which has a manufacturing facility in Agbara, Ogun State on over 25 hectares of land had directly employed over 400 highly technical workers like pharmacists, microbiologists, biochemists, chemists, dentists, doctors etc, and also employed over 1000 other staff.

“It indirectly provided jobs and business opportunities for thousands of Nigerians across the nation. They are now leaving all these behind, and pushing more people back into unemployment.

“I have consistently maintained that in turning our nation around, we must move the economy from consumption to production, part of which included encouraging and supporting local and foreign investments, like GSK, in the country.

“The creation of an environment that creates and sustains multinationals to invest in our country is key to our dream of greatness. In the new Nigeria that we seek to create, the emphasis on production will encourage investors to stay and expand on our shores.”

The decision of GlaxoSmithKline, which was incorporated in Nigeria in June 1971, added to the growing number of multinational companies leaving Nigeria due to an unfriendly business environment.

The pharmaceutical multinational company is the producer of popular products like Panadol, Ribena, Lucozade, Macleans, augmentin, and Andrews Liver Salt, among others. Nigerians are concerned that its exit will result in a further hike of its pharmaceutical products.

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