Goldman Sachs is making it easier to plug its services into other tech platforms like Amazon or Apple’s iPhone, and an industry consultant says it shows how the bank is leading a `fundamental change’ in retail banking.

  • Goldman Sachs is in talks with Amazon about providing small-business loans to merchants who sell products on Amazon’s retail platform, according to a person with knowledge of them. The talks were first reported by the Financial Times on Monday. 
  • The partnership would be the second inked by Goldman with a large technology firm that can provide the scale and distribution for Goldman’s products that it can’t get itself. 
  • The partnership, and another one with Apple, is an example of banking-as-a-service, though some insiders have taken to calling it Goldman Sachs-as-a-service. 
  • “If Goldman can pull off an embedded banking deal somewhere else besides Apple Pay … that’s a leading indicator of a fundamental change in retail banking,” according to independent consultant Richard Crone.

Goldman Sachs is close to inking a second high-profile deal to offer banking services in partnership with a large tech company, and it’s a sign of what may be a fundamental change in retail banking. 

Goldman is in talks with Amazon to offer small business loans to merchants who sell products on Amazon, according to a person with knowledge of the discussion. The Financial Times first reported the talks on Monday. Goldman’s small business loans may feature the bank’s name and begin as soon as March, the newspaper said. 

A spokesman for the bank declined to comment. 

If the deal is signed, it would become the second Big Tech partnership for Goldman Sachs after it launched a credit card last year with Apple last year. Goldman CEO David Solomon has called the Apple Card the most successful credit card launch of all time, without providing details to back up the claim. 

But it would also be a sign of something much more ambitious: Goldman Sachs moving quickly and aggressively to leverage those characteristics that make it uniquely a bank, with a license that allows it to offer banking products and a balance sheet where it can fund loans cheaply being just two prominent examples. 

The company has been sinking hundreds of millions of dollars into building out its technology capabilities, including APIs (application programming interfaces), to make it as easy and seamless to plug such services into the technology platforms of others, whether that’s Apple’s mobile devices, as with the Apple Card, or Amazon’s retail platform. 

At an investor day last week, execs referred to it as banking-as-a-service, but some insiders have taken to calling it Goldman Sachs-as-a-service. 

Stephanie Cohen, Goldman’s chief strategy officer, appeared on stage last week at the bank’s investor day alongside Marco Argenti, the co-chief information officer who recently joined the bank after several years as a senior exec at Amazon Web Services.

Cohen said the bank is looking for ways to use technology to embed the types of things that Goldman can do well, such as risk management, or loan underwriting.

Cohen cited the Apple Card, which is a Goldman-designed product delivered on Apple’s devices, as one such example. 

“That last capability is the consumer version of our platform strategy,” Cohen said. “It allows us to take products and services that we build for our own clients and then give it to other clients so that they can embed financial products into their ecosystem. This strategy will drive top-line growth, and it will create scale efficiencies.”

Goldman isn’t the only large bank that’s working with Big Tech companies. In November, Google announced a partnership with Citigroup to provide checking accounts to the tech firm’s customers. 

And yet, Goldman is probably doing it better than anyone because it has developed a suite of APIs that it can take off the shelf and plug into other platforms, according to Richard Crone, an independent consultant. 

“Goldman Sachs, when they write the history books, will be noted as the one who invented or perfected embedded banking, where you embed your financial services through the user interface, or at the edge, of someone else’s network,” Crone said. “If Goldman can get this right with Amazon, I would expect them to go to Facebook next or any other online platform of substance that provides them a large distribution channel.”

Goldman is leaning on many of the lessons it learned in its partnership with Apple, known as an incredibly demanding partner, Crone said. Most notably, the ability to offer instant issuance to a set of customers that have already been pre-validated, multi-factor authenticated, Know-Your-Customer credentialed by the large tech firms. 

“They already know the customer, but they have met the regulatory requirement in advance before they hand it over,” he said. 

The product will likely look similar to what small merchants are getting from Square Cash or PayPal Working Capital. 

Goldman has bigger ambitions. At last week’s investor day, the bank presented a slide that showed a product called Marcus Pay, which talked about point-of-sale solutions for merchants based on its digital consumer bank. 

This is just another example of how embedded banking is here to stay, which can be hard for a lot of bankers to understand because they want to service customers through their own app, Crone said.

But “no financial institution can reach the scale that’s required to compete electronically” with the large platforms if they only do it through their own app, he said.  

“If Goldman can pull off an embedded banking deal somewhere else besides Apple Pay, or if Citigroup can pull off Google Cache, that’s a leading indicator of a fundamental change in retail banking.”

See also: Goldman Sachs just unveiled hundreds of slides laying out the future of the company. Here are the 10 crucial slides that show how it plans to transform into a bank for everyone.

See also: Inside Goldman Sachs’ first investor day, where avocado toast and crab apples were served with tech talk, 3-year plans, and a surprising trading mea culpa

NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here’s how the company makes money.

Related posts

Apostle Who Predicted Pastor Adeboye’s Death Reveals Fresh Prophecy On Buhari

person

President Muhammadu Buhari

Apostle Paul Okikijesu of the Christ Apostolic Miracle Ministry has revealed what God told him about President Muhammadu Buhari.

In a series of 2020 prophecy he released to DAILY POST on Saturday, he said God has asked Buhari not to rely solely on his wisdom.

He said Buhari must have a meeting with religious leaders, including his religious advisers in order for his government to be meaningful.

He said, “Thus says the Lord: Tell the President of this country to seek advice from those that I established as my ambassador and representatives that are telling the truth, and not the gluttons.

“The gluttons did not allow Buhari to listen to the truth and he did not count Christianity as something valuable, because the acts/behaviors of Christian leaders are different from what he thought.

“He should think deeply concerning his administration because the messages which I sent to him, he carried out some of my instructions and left the rest, that was the reason that his tenure was in this precarious state.

“Send these messages to him the third time that I want the fear of I the Lord in the heart of this man, and he should not see himself as the president. He should realize that God alone is the President of the world.

“Thus says the Lord: I have sent these messages to him in the past to give these three arms of the government the power to work effectively.

“These arms of the government are the executive, the judiciary and the law enforcement.

“This judicial arm includes the human rights advocates and I instructed him to give them free hand to operate; these are the things which I requested from him, and this is what can make his regime to be meaningful.

“I send this message to him the second time that he should invite the ex-presidents, and he must not commonize anyone if he wants his government to be peaceful.

“According to My previous messages, he complied partly but not fully. I instructed him to invite and have meeting with the banking sector, stock exchange sector, the oil and gas sector and the foreign exchange sector for the growth of the nation.

“He should then present the outcome of the meetings to the spiritual people for advice.

Thus says the Lord; remember that those I installed as rulers during the ancient period did not use only their wisdom, but they asked for direction from I the Lord.

“It is when he calls these people that his regime will be meaningful and he will have a successful tenure. If he uses power to do things, some people will be sabotaging his government.

“The executive that I said are the ex-presidents, he should call them and have meeting with them; then get the opinions/advice of the people in his administration separately.

“It is the wisdom derived from these meetings that will cause growth/development in Nigeria. He must have meeting with the business community including the expatriates, these are the steps that will make the economy of Nigeria to rise and grow.

“He should have meeting with ex-ministers, ex-senators, ex-presidents, and ex-governors, the outcome of the meeting will have positive effect on the economy and restore the economy to a buoyant position.

“He should have a meeting with judicial personnel, including the attorney general to find way that will make the law of the country to be effective.

“If Buhari can take these steps and have meeting with religious leaders, including his religious advisers, his government will be meaningful for good.

“Thus says the Lord; Buhari should have meeting with ex-party leaders and the current party leaders concerning the issues of Nigeria and how she can progress.

“These steps are the things that can make him to be successful and prolong his life, so that I will halt the judgment hand that I intend to use in year 2020.”

In his last prophecy, Okikijesu had declared that God told him that Pastor Enoch Adeboye of the Redeemed Christian Church of God, RCCG; Pastor W.F Kumuyi of Deeper Life Bible Church and Bishop Oyedepo of the Living Faith Church, will die soon and would not make heaven. 

Related posts

Nigerian Youths Should Choose Life, Not Death — Emmanuel Onwubiko

person

Statistically, the global authority on health issues known as the World Health Organization (WHO) has released a highly frightening but realistic rate of suicides committed by members of the global humanity per annum. It says that close to 800 000 people die due to suicide every year, which is one person every 40 seconds.

Suicide the World Health Organisation observed succinctly, is a global phenomenon and occurs throughout the lifespan.

It reckons that effective and evidence-based interventions can be implemented at population, sub-population and individual levels to prevent suicide and suicide attempts. There are indications that for each adult who died by suicide there may have been more than 20 others attempting suicide.

Suicide occurs throughout the lifespan and is the second leading cause of death among 15-29-year-olds globally.

Suicide is a global phenomenon; in fact, 79% of suicides occurred in low- and middle-income countries in 2016. Suicide accounted for 1.4% of all deaths worldwide, making it the 18th leading cause of death in 2016, so says the global agency on health matters also known as World Health organization in its website just visited by this writer.

I must state that although the fact remains that suicide is a worldwide trend, but for us in Nigeria just like in other African nations, the death of someone is a huge loss not just to the immediate family but to the society and the nation at large. Given the African set up of the typical family tree, members of a given family belong to both the nuclear and the extended family units. So the matter of suicidal demise of any member brings about phenomenal amount of sorrows to a greater percentage of people in Nigeria.

However, due to a number of factors not unrelated with psychological, emotional, financial and sociological factors, a lot of young Nigerians have fallen into the traps of suicide in the last couple of years particularly in the last one year. Around June of last year, Samuel Elias, 25, a final year student of Department of Religion and Culture, University of Nigeria Nsukka allegedly committed suicide by drinking sniper.

The mother of the deceased, Mrs. Kate Elias a staff of the university, told the News agency of Nigeria that the unfortunate incident happened on Monday June 17, around 5.30pm in her house at Justina Eze Street Nsukka.

Elias said she came back from work on that fateful day and discovered that the mood of her first child was bad and he was staggering when he came to collect a bottle of coke from the fridge

“I followed him immediately to his room and started talking to him but he could not respond and when I looked closely, I discovered that his teeth had tightened up.

“As I looked around, I saw an empty sniper bottle; at this point I raised alarm and my other children rushed to the room and we tried to give him red oil but his tightened teeth did not allow the oil to enter his mouth,” she said.

According to her, he was rushed to the hospital, where he eventually died.

“We immediately rushed him to Faith Foundation Hospital, Nsukka and were later referred to Bishop Shanahan Hospital, Nsukka, where he eventually died.

The mother of seven said her son could have died of depression, noting that he had been lamenting his inability to graduate from UNN because of his final year project, which he has been working on.

“I know two things he usually complained, his inability to graduate from UNN since 2016 because of the project that he has not finished as his classmates have all gone for their National Youth Service Corps.

“Also, how his father’s family in Ihechiowa in Arochukwu Local Government of Abia State abandoned us since their father died.

“Whenever he complained of these things, I usually advised him to trust God, who is capable of solving every problem.

“I do not know why he will go to this extent of committing suicide. I have seven children and he was my first child.

“It is still like a dream to me that my first son and first child has died,” she said in tears.

Reacting to this incident, Prof. Tagbo Ugwu, the Head of Department of Religion and Culture in UNN, said somebody called him and told him about the unfortunate incident.

“I received the news with shock and surprise.

“I will find out from his supervisor what is wrong from the project that has stopped him from graduating,” he said.

When contacted Mr Ebere Amaraizu, the Police Public Relations Office, in Enugu State, confirmed the incident and said police would investigate the circumstances surrounding the death.

“The police is aware of Samuel Elias’ death. He was a final year student of the Department of Religion and Culture in UNN, who committed suicide on Monday by drinking sniper.

“Police will investigate circumstances surrounding the death,” he said.

It would be recalled that barely five weeks after Chukwuemeka Akachi, a 400-level student of Department of English and Literary Studies in UNN ended his own life after taking a bottle of sniper. In August of last year, from the Obafemi Awolowo University (OAU), came the story that the school community was thrown into mourning mood following the death of a final year student, Opeyemi Dara. The deceased was said to be a student of Faculty of Arts, Department of English Language, who allegedly committed suicide after taking a suspected dose of lethal substance popularly known as “sniper”. News Agency of Nigeria (NAN) learnt that she allegedly took her life following her poor academic performance, although the details of the incident were still sketchy.

The media stated that the authority of the institution confirmed that the deceased committed suicide following depression occasioned by poor academic records.

Dara’s academic records obtained by a journalist who worked on the story for one of the National dailies indicated that she had five outstanding courses and 12 Special Electives.

Also the Public Relations Officer of OAU, Mr Abiodun Olanrewaju confirmed the incident and promised that the institution would investigate and make its findings public. Olarewaju appealed to students not to contemplate committing suicide because of poor academic performance.

“We sympathize with the parents and guardian of the deceased known as Dara.” We just want our students and young ones to know that depression is not a thing they should encourage, no matter the situation or circumstance they find themselves. “ Some people in the past have passed through the same situation and circumstances and came out clean. “Now, suicide can never be an option and people, especially the young ones who believe that taking their own lives is an act of gallantry should know that it is not. “We want to appeal to students, particularly OAU students to take things easy. Any child that fails; that is why the university says you can rerun a course, you can resit a course.

“People out there also face challenges and when you are in school, failure or repetition of a course or particular subject is also part of the challenges students must face. “The university will get to the root of the incident and get back to the public,” Olarewaju said. Just before this case, there was another story from Edo state.

That was precisely at the Faculty of Arts, University of Benin, UNIBEN, main campus came the heartbreaking story that a final-year student jumped from the second floor of one of the hostels and died.

The deceased male student, whose identity is still unknown as at press time, committed suicide after failing his examinations, which made him suffer depression for failure to graduate. The next case is that of a girl that reportedly took her life following a break up of a relationship and this also happened at the University of Benin like the aforementioned the deceased was a three hundred level student.

The corpse of Miss Christabell Omoremime Buoro, aged 21, a 300-level student of the department of Medical Laboratory Science, University of Benin (UNIBEN), was discovered in her hostel flat at Plot 4 Uwaifo lane, Newton street, Ekosodin area, behind the university fence, so reports the newspapers. Miss Christabell reportedly was discovered after she allegedly took some deadly substance to end her life. It was gathered that the undergraduate linked her suicide to her breakup with her boyfriend.

The media states that an empty sachet of Klin detergent was found in the spot where she took her life.

According to the source of the media information, “A small girl of that age will take her life all because of one boy. The policemen that came to evacuate the body were very angry after reading out loud the note she dropped.

“Thank God that she even dropped a note, if not the roommates would have been in hot soup, because investigation would have began from that point.”

As are with all cases of suicide, the police officers in this case situated at the Ugbowo police station have invited two person for questioning over the content of the letter.

It was rumoured that the deceased Christabel mixed the deadly insecticide, popularly called Sniper with Sprite drink, and reportedly left a suicide note where she stated that she was about taking her life because the guy she loved didn’t love her in return after her boyfriend broke up with her.

Sadly, the year 2020 has also seen another case of suicide by a youngster and in this developing story we were told that the girl stated that she was depressed and that she no longer find life attractive.

The Enugu State Police Command only at the weekend confirmed that a serving National Youth Service Corp member in Enugu State, Miss Bolufemi Princess Motunrayo, has committed suicide.

It was gathered that Miss Motunrayo, a Batch ‘C’ corps member serving in Girls Secondary School, Ibagwa-Aka, Igbo-Eze South Local Government Area of Enugu State took her life on Friday, January 10, 2020, when she allegedly drank a substance suspected to be sniper.

The Corp member hailed from Ijumu Local Government Area of Kogi State and a graduate of Banking and Finance from Prince Abubakar Audu University formally called Kogi State University was reported to have taken two bottles of snipers.

One of the media reporters who worked on this emerging story said it was learnt that she had before committing suicide dropped a short note that read, “I did this because I see nothing worth living for in this world”.

Confirming the alleged suicide is the State Police Public Relations Officer, Ebere Amaraizu, who described the incident as unfortunate.

Amaraizu, a Superintendent of Police in a text message to the Punch newspaper correspondent said, “The incident has to do with the taking of sniper insecticide by one Bolufemi Moturayo Yetunde, a female corper from Kogi State but, doing her service with Girls High School, Ibeagwa-Aka, Igboeze South L.G.A on 10/1/2020.

“She was later rushed to the hospital where the doctor confirmed her dead,” he said.

In the version written by The Guardian, one of the friends of this absolutely beautiful graduate and a serving member of the National Youth Service scheme (NYSC) raised alarm that there is need for a thorough investigation of what triggered the ‘suicide’ because in the thinking of this person, the girl who killed herslf allegedly was having a swell time and was not known to have any case of depression or loneliness.

From all these and many other stories of suicide and suspected suicides especially the cases of suicide by Students, there is a glaring evidence of a lacuna fundamentally in the administration of these tertiary institutions. These cases of students killing themselves due to frustrations attendant with their inability to successfully graduate could be tackled if these schools can set up functional mechanisms for looking into all cases related to inability or otherwise of their students to graduate. There has to be a system in place to seamlessly monitor and ensure that the process of writing and supervision of projects of students are transparent and open to such an extent that no single person should become the last hope of any strident from graduation. The schools should have a reporting mechanisms whereby cases relating to inability to pass these projects and graduate are looked into by dedicated members of staff who should play the role of arbitrators for the students. The school system in Nigeria is too commercially oriented to an extent that Students are put under intense pressure to raise money from all means possible to bribe lecturers marking their papers to enable them graduate and most of these students who can’t raise money to pay their ways are left with no option than to be sexually abused by some professionally incompetent lecturers. The University and tertiary institutions must be made to put on a human and humane face even as there has to be a system in place to give access to students to step up and dialogue with dedicated teachers who would offer counselling and also hear cases related to frustrations witnessed at any stage of their educational journeys. The school must be prepared to vote cash to cater for this sort of important human relationship Counseling mechanisms to stave off the rising cases of suicide. The school must not be all about profitability.

The Nigerian police and other relevant law enforcement agencies like NAFDAC must monitor the activities of traders who deal in chemical and drugs related products such as snipers with a view to ascertaining identities of buyers and the use to which these products would be put into. There is also the need for state governments and the Federal government to embark on deliberate but massive public enlightenment programmes to warn youngsters to choose life over death and to resolutely beat back all suicidal tendencies through the cocktails of effective means of communication and getting counseling service from toll free lines that should be publicized for all Nigerians to be conversant with.

For instance, the European Council on Human Rights has successfully repealed the death penalty because of the overwhelming rating of Right to life in Europe. In Article 2 of the European wide laws on human rights, it is legally provided that: “Everyone’s right to life shall be protected by law. This right is one of the most important of the Convention since without the right to life it is impossible to enjoy the other rights. No one shall be condemned to death penalty or executed. The abolition of death penalty is consecrated by Article 1 of Protocol No. 6.”

The Nigerian Constitution in Section 33(1) provides that “Everyone has a right to life. ”

*Emmanuel Onwubiko is the Head of the Human Rights Writers Association of Nigeria.

The post Nigerian Youths Should Choose Life, Not Death — Emmanuel Onwubiko appeared first on Information Nigeria.

Related posts

Death, Diarrhea and Late Night Sackings: The Inside Story of an Unfolding Staff Nightmare at UBA and Dangote

person

Last November, thousands of Lagosians including hundreds of UBA Bank employees attended what was billed as the ‘party of the year’ at the Lekki Special Events Centre on Admiralty Way.

The UBA RedTV Rave had everyone from Wizkid to Olamide to Jidenna to Burna Boy thrilling the festive crowd as UBA chairman Tony Elumelu and CEO Kennedy Uzoka mingled with the artists and guests.

On the surface, this was the best of times, as a bank that was clearly in rude health celebrated a successful year with thousands of employees, friends and family. The bank had also recently concluded a recruitment exercise that would add nearly 4,000 new employees to its staff strength, so the year ahead looked to be a promising one for most employees present. 

Unknown to them, while senior executives danced with Wizkid in the VIP area, one of the most brutal staff layoffs in Nigerian banking history was just around the corner. They partied well into the night and then showed up for work the following week as usual. A week went by. Two weeks. Four weeks. Then right at the start of the new year – a shocker.

Closed at 5.30PM, Terminated at 10.30PM

Ifunanya (name has been changed) was asked to wait behind at work on Friday January 3. As a 12-year UBA veteran including a long stint in her role as a Branch Operations Manager at a branch in Ojodu, Lagos, this was not an unusual request to receive. She was even used to working weekends so that the ATMs could remain functional and she could troubleshoot other onsite customer-facing issues. This time however, was different. 

Along with other staff members at the branch, she was asked to wait for a board meeting. By 10.30PM, the assembled staff were informed that their services were no longer required. They were then told verbally to write out their resignation letters on the spot and leave voluntarily or be forced out. At this point, her security pass was taken, and along with the other affected staff, her profile was unceremoniously deactivated from the bank’s internal system. She was reminded to drop her work ID on the way out, and thus ended a 12-year association with the bank.

When a relative of hers reached out to tell the story, he was keen to make the point that she was not an agency employee, but a full UBA employee on a monthly salary of N153,000. He could not understand why the bank would treat her that way. I heard similar stories from two other sources who insisted that they were coerced into resigning after being told that their services were no longer required right at the start of the new year.

Shocking and callous as these stories may have sounded, one of the first things you are taught in any professional journalism program is to always balance the story. So I sought an alternate account of what transpired, with the goal of putting the picture together to tell a complete story. There were conflicting accounts of the events of January 3 flying around, with some accounts describing a recruitment and promotion exercise without mentioning any firings, while others reported a purported “restructuring” at UBA, which is a well-known euphemism for “mass sack.”

I managed to establish contact with a current senior employee at UBA who asked to remain anonymous because he is not authorised to speak about such matters. This was his account of what happened at UBA bank at the start of this year:

“Usually when anyone joins UBA with a Bachelor’s degree, they are put on a GT1 level (N80,000). After one year, they are promoted to GT2 (N100,000), then after another year ET1 (N140,000) which is where a lot of people get stuck on. If you are lucky, you get to ET2 (N165,000). So what UBA did was to meld those 4 levels into one (ET) so any one who was on GT1 and GT2 gets automatically promoted to ET2. Those that were on ET1 and ET2 got promoted to SET (Senior Executive Trainee). 

So it was a promotion of sorts, but honestly it was long overdue because compared to other banks, N80,000 for entry level staff is quite low. About the layoffs: I only know 4 people personally who got affected. The people affected were on manager grades and worked at the head office, they all reportedly got 6 months arrears.”

According to this source, he was not personally aware of the fate of any branch staff or what he termed ‘OND staff.’ He did however say that in his opinion, the bank handled the situation poorly and that Nigeria does need stronger labour laws to protect young graduates fresh out of school from exploitation for cheap labor at the hands of corporates like UBA. He also mentioned that he knows current UBA staff have not had a salary increase in ten years – a remarkable situation for workers in a country whose currency has declined 195 percent over the same period.

As it later emerged, more than 2,000 staff were affected by the shocking late-night cull at UBA. It also became increasingly clear that the firings had nothing to do with a harsh operating environment or decreased profitability. The bank which had brought together Nigeria’s most expensive music stars to perform at its end of year shindig was anything but struggling – it actually hired more people than if fired. What the sackings did though, was clear out a number of people in roles that the bank considered obsolete, particularly within branch operations.

It can definitely be argued that such restructuring is inevitable in the face of rapidly changing technology, which is hardly a terrible thing. What is also true however, is that the bank that paid huge sums of money to bring Burna Boy and Jidenna to an annual vanity event that adds nothing to its bottom line could also afford to retrain its redundant staff to fit into new roles –  instead of just sacking them and instantly bringing in thousands of readymade replacements.

Yet again, the actions of a Nigerian corporate made the point that Nigerian labour law, in addition to be being poorly enforced is also woefully inadequate and unfit for purpose. If after 12 years of useful service to a bank, Ifunanya could be dumped out onto the street without even a few hours of notice – and no regulatory action was forthcoming – then clearly, Nigerian employees working for Nigerian companies have a problem on their hands.

As much as the UBA situation made that point, nothing could have prepared me for what I was about to unearth about another Nigerian corporate behemoth.

Diarrhea in India, Death in Ibeju-Lekki: The Unbelievable Story of Dangote Refinery

While senior executives at UBA House were going over the finer points of their plan to log 2,000 employees out of their work systems and force them to resign on the spot, a different level of labour exploitation was entering its fourth year about 73KM east of the Marina. There, at the site of the Dangote Refinery at the Free Trade Zone in Ibeju-Lekki, Lagos, the refinery was taking delivery of the world’s largest crude oil refining tower.

While this was predictably being celebrated across local and foreign media as the start of a glorious new chapter in Nigeria’s industrial history, I was speaking to a whistleblower with close and detailed knowledge of the project. What he had to say about the refinery project, the Indian project managers, the company’s internal culture and its much-publicised trainee program left me absolutely floored. Naturally I reached out to Dangote Group for a comment, but at press time I have received no response or acknowledgment.

My source, whom I shall call “Mukhtar” worked in and around the refinery project between 2016 and 2018, and what I found most distressing amidst everything he said was the revelation that deaths due to onsite accidents are not just known to happen at the refinery site, but are effectively covered up by Dangote. This he said, is because the people who die are mostly site labourers who are hired through staffing agencies instead of directly. When they die, it becomes the staffing company’s problem and the Dangote brand distances itself from it – even though the site owner is legally responsible for all safety-related incidents onsite.

Something else that struck me was that he implied that – contrary to all its public posturing – the company actually has no intention of using Nigerian engineers to run the refinery anytime soon. The trainee program that sent dozens of Engineering graduates for a one-year training program in India? “Strictly PR,” he said.

Accidents
The first batch of Dangote Refinery trainees head off to India in March 2016

For full effect, I have decided to reproduce the full and unredacted transcript of our conversation instead of using quotes and reported speech. Here is the conversation below:

ME: When we started this conversation, you mentioned that Dangote Refinery is exempt from Nigerian labour laws. What were you referencing?

Mukhtar: Because the refinery is in the FTZ, it is not subject to certain laws like local content laws. As such, even mundane jobs are given to non-Nigerian companies. Even the refinery’s fence wall was handled by a Chinese company. This didn’t stop long stretches of the fence from collapsing sometime in 2017. The FTZ affects Labour laws too. The company is not really under any obligation to employ Nigerians. They do so mostly for PR. All key decision makers are Indians (say 98%).

ME: There have been several horror stories about Indian-run businesses in Nigeria. Was this one of them?

Mukhtar: Yes, the Indians are quite racist. Some even demand to be referred to as “master”. To be fair, when this is reported, the HR unit makes a show of cautioning them. But I dont think anyone has ever been dismissed for it or seriously punished. Most of workers who meet their death on site are labourers. So their names might be known to many staff. I’ll see what I can get. It happens. It’s kept under wraps but it happens.

ME: Now you mentioned onsite deaths earlier. I want to know all about this. Why haven’t we heard anything about this?

Mukhtar: The refinery site is not really the best place to work. Mortality rate on site is quite high. People falling from heights or getting crushed by heavy vehicles/machines is quite common. These numbers are not reported because most staff are contract staff (or outsourced) so the company gets to wash its hands off such cases. But safety on site is the ultimate responsibility of the owner of the project. The construction site has a board that is supposed to display the safety statistics but it is never displays the truth. According to that board, there has never been a fatality on site. But in reality, I think 2018 had about 5 fatalities between January and March. If I were to guess, I’d say there have been over 25 fatalities since construction started in 2016/17.

ME: Now you said earlier that the trainee program was a washout and a disappointment. Fill me in on that.

Mukhtar: I was one of the first batch of engineers sent to India for training in 2016. In my opinion, the whole scheme was either poorly thought out or the company was somehow compelled to do it, and did so for PR. Our salaries were being paid into our accounts in Nigeria, so we were using our debit cards to access our Nigerian accounts for expenses over there) Around July 2016 when the naira went from around 160 per dollar to nearly double that number, our spending power was effectively halved.

ME: I also remember that there was a forex shortage crisis in 2016 and Nigerian bank cards stopped working outside the country.

Mukhtar: So when the banks eventually stopped all cards from functioning abroad, we were stranded. The company resorted to selling us dollars or rupees at the black market rate.They deducted the money from our salaries. We had accommodation (two adults per room) and feeding (Indian food which many of us did not like). Some of had to buy intercontinental dishes regularly, because Indian food is really not nice if you’re not into many smelly spices. It was crazy. Meanwhile we were told categorically that we would have Nigerian food and Nigerian cooks. It was a blatant lie by the Indian HR director.

Also, no arrangement was made for our medical care. Those who fell ill had to treat themselves from their pockets. During the currency crisis, those who fell ill had to rely on the rest of us to put together our spare change to pay for their treatment. The company promised to refund medical expenses, but this shouldn’t have been the situation in the first place.

ME: Tell me about the training program. What was the course content and the experience like? Was it what you were expecting?

Mukhtar: The training itself was a mess too. We were supposed to be trained to operate the refinery (at the time, it was said that it will be completed by mid 2017), but we were sent to a design company. These (designing a refinery and operating it) are two very, very different things. The trainers did not want us there in the first place. It was not a part of their initial contract with Dangote. Plus, they didn’t know what to teach us because designers are not operators. They were confused, several times, they asked us what we wanted to learn. But we could not know what we wanted to learn cos we knew nothing about the entire business. In the end, they reluctantly settled for teaching us design (skills we were/are unlikely to use cos the refinery was already 90% designed). 

ME: If you say that the refinery was “already 90% designed,” and you were learning design in India, that sounds like your presence was superfluous. Was the company really serious about sending you to learn skills to run a refinery?

Mukhtar: Indians will run the refinery. It will take many many many years before that refinery will be populated by just Nigerians. It was strictly PR. Anyways, the training with that design company was suddenly terminated on December 31st. Apparently, Dangote had not paid them a dime for all the months were were being taught design. They didn’t want to send us back to Nigeria so they moved us to the Dangote office in India. The office housed the Indian engineers (around 150 – 200 in number) who were supervising the design work being done by the design company. Now, it is interesting that these guys were working and earning as expatriates within their own country.

But realising that the “training” was a blunder, the company sent back some engineers to train in an actual refinery. So what was supposed to be a 1 year training became 2 years.

ME: Since returning to Nigeria, is there anything else you have noticed about the project that worries or disturbs you?

Mukhtar: Yes. So we have only the refinery at the FTZ, but the company gets to import things meant for other branches of the company duty-free. As a matter of fact, with the Dangote jetty in place and a customs office right there, the company no longer needs to clear stuff at Apapa. Dangote empire effectively has its own customs and port, because we cannot assume that the custom officers stationed at Dangote’s jetty/FTZ are extremely meticulous in checking what comes in and goes out. Personally, I find this disturbing. No non-military entity should be able to import stuff that easily into any country. This is bigger than just skipping custom duty payment.

–Ends–

Between bank staff being fired at 10.30PM and refinery site labourers being killed by workplace accidents without accountability, the sheer grimness of the picture facing Nigerian workers comes into stark relief. It is afterall, an employer’s market, with several thousand qualified people jostling for every job opening, which creates the possibility and incentive to treat staff like battery animals.

Whether the Labour Ministry is willing or able to do anything about such blatant labour exploitation is anybody’s guess. Nigeria’s government is increasingly weak and unable to impose its will on the country even territorially. In the event that the government did take interest, there is a valid fear that it would go to the other extreme and adopt a lazy anti-business Hugo Chavez approach, as it so often does. The real solution if there is to be one, must come from Nigerian labour having a stronger bargaining position through an improved economy. Anything else as it stands, is little more than a sticking plaster.

As Mukhtar mentioned, even inside the ridiculous situation of being financially stranded in a foreign country at the behest of an irresponsible and insincere Nigerian corporate, the vast majority of the group chose to suffer in silence. They did so because spending a year abroad learning useless information, suffering deprivation and experiencing diarrhea after being forced to eat unfamiliar food was still preferable to whatever alternative was at home.

Ultimately, that is the biggest problem facing Nigerian labour. 

Related posts

Christ Embassy Church probe in UK: The Full report | P.M. News

person

Pastor Chris Oyakhilome: heads the Christ Embassy Church in UK

Christ Embassy Church, owned by Pastor Chris Oyakhilome and registered in the UK in 1996 as a charity came under probe of the Charity Commission in 2013, following complaints about the use of charitable funds on large connected party payments.

Truly, investigators discovered numerous failings in its management. They established that a number of informal grants and payments were made, including over £1.2 million* to a broadcasting company, Loveworld Television Ministry, which was wholly owned by a trustee of the charity.

Also, for six years the charity had allowed Loveworld free use of a £1.8 million property it had purchased, and was subsidising a proportion of the company’s utility bills. The inquiry found a lack of formal contracts or appropriate record keeping, and a lack of evidence of proper decision-making or of conflicts of interest being appropriately managed.

Financial management at the charity was also found to be poor. The trustees claimed 9 bank accounts held funds belonging to Christ Embassy Nigeria, and that 3 UK properties belonged to Christ Embassy Nigeria, however the inquiry concluded that all of these in fact belonged to the charity.

Oyakhilome’s ex-wife Anita Ebodaghe: was on the charity board at the time

The inquiry considered that there was serious misconduct and/or mismanagement in the administration of the charity, and took action to remove two of the trustees of the charity, however the individuals resigned before the sanction was applied. The Commission has since been granted new powers to address this loophole, which it secured under the Charities (Protection and Social Investment) Act 2016.

As a result of the inquiry, a new board of trustees was set up to strengthen the administration and management of the charity.

Amy Spiller head of the investigation team spoke on how the investigation was able to dissect the complex web of entities connected with the Christ Embassy Church:

“This was a complex inquiry that unveiled numerous failings by those running Christ Embassy over a number of years, which exposed the charity to undue risk. I am pleased that these issues have been resolved and that the new board of trustees has shown a clear commitment to move the charity forward responsibly.

“Those running a charity should always be guided by their charitable purpose. Trustees have an important responsibility to ensure that they act in the best interests of their charity at all times, and take care to safeguard their charity’s assets. Our guidance around governance arrangements is there to help trustees ensure they do just that.

“Charities are trusted in a way that is unique, and people often put a lot of faith in religious charities. It is therefore vital that trustees, particularly those with a large following, do all that they can to inspire public trust”.

Christ Embassy operates over 90 churches in the UK, providing religious services to over 5000 people, and has a substantial international following.

Here is the full report released 14 November, 2019 as culled from www.gov.uk

The Charity
Christ Embassy (the charity) was registered on 19 November 1996. It is governed by a Declaration of Trust dated 23 October 1996.

The charity’s entry can be found on the register of charities.

Charity Structure
The charity was established in South London in 1996. The charity’s Headquarters is located at the Loveworld Conference Centre (commonly referred to as the “Christ Embassy International Office”), in Folkestone, Kent and is supported by three sub offices situated in Bermondsey, Croydon and Hendon. The sub-offices operate in excess of ninety churches throughout the country, providing religious services to in excess of five thousand beneficiaries.

The charity has a trading subsidiary company called Christ Embassy Limited (Company Registration No. 05862298) which became a subsidiary in 2012. The trading subsidiary shares the charity’s UK headquarter premises. The trading business involves the production, sale and distribution of religious books and media products.

The charity’s reported income in the year ending 31 December 2013 was £14,055,229 and its expenditure was £15,923,977.

Trustees
During the Commission’s engagement with the charity (since 2012) there have been numerous trustees in office. The table below only lists the trustees who were in office for a part of the inquiry.

Trustee From To
A (Reverend Christian Oyakhilome) 23 October 1996 17 May 2014
B (Reverend Anita Oyakhilome) 6 April 1999 2 June 2015
C (Pastor Obioma Chiemeka) 6 October 2009 13 October 2015
D (Pastor Nkemakonam Odiakah) 6 October 2009 15 February 2016
E (Pastor Ifeoma Onubogu) 6 October 2009 12 February 2016
F (Pastor Uche Onubogu) 17 May 2014 26 January 2015
G (Pastor Tony Obi) 17 May 2014 16 October 2015
H (Reverend Raymond Okocha) 17 May 2014 8 August 2017

Trustee A resided in Nigeria and was the founder and international leader of the charity. His wife, trustee B, resided in the UK and was leader of the UK based charity.

Trustees B, D and F were also paid employees of the charity during periods of their trusteeships, which was permitted by their governing document in particular circumstances.

Following the appointment of an Interim Manager and full governance review, a new board of trustees (the new board of trustees) was appointed on 12 April 2016 who are now responsible for the administration and management of the charity going forward. Significant progress has been made to address the governance and improve oversight and control by the new board of trustees.

Issues under Investigation

On 29 July 2013, the Commission opened a statutory inquiry (the Inquiry) into the charity under section 46 of the Charities Act 2011 (the Act).

The Inquiry closed with the publication of this report.

The scope of the Inquiry was to examine a number of issues including:

*the transactions between the charity and “partner organisations” that include grants made to a number of unidentified entities and Loveworld Television Ministry, Healing School, International School of Ministry, Christ Embassy France, Christ Embassy Canada, IPCC Conference and Rhapsody of Realities

*the administration, governance and management of the charity by the trustees with specific regard to connected party transactions in respect of payments to Loveworld Limited and the management of conflicts of interest

*the financial controls and management of the charity

*whether or not the trustees had complied with and fulfilled their duties and responsibilities as trustees under charity law

Findings
Transactions between the Charity & “partner organisations”
The Inquiry team examined the accounts of the charity, for the period 2009-2011 which showed that the charity had paid substantial grants to organisations classified as “partner organisations”.

During 2009-2011, the charity’s accounts show grants amounting to £1,281,666 were paid to Loveworld Television Ministry; £118,995 to Healing School, £186,616 to International School of Ministry, £10,000 to Christ Embassy Canada, £10,566 to Christ Embassy France, £37,216 to IPPC Conference and £77,266 to Rhapsody of Realities.

The trustees provided the Commission with a copy of their grant making policy, and admitted to the Inquiry that “Prior to the involvement of the Charity Commission the grant making practice consisted of a discussion by the Trustees at a Trustee meeting regarding who should receive grant”.

Following his appointment on 6 August 2014, the Interim Manager (the IM) examined the charity’s records and found no evidence of compliance with the Grant Making Policy. Documents examined, by the IM, demonstrated a lack of records and receipts to account for grants made and there appeared to be little consideration given to whether the receiving parties had expended grants appropriately and for intended purposes, as was required by the policy.

This demonstrates failure to comply with its grant making policy and inadequate recording of decision making by the trustees which is misconduct and/or mismanagement in the administration of the charity.

Administration, governance and management of Charity by trustees-specific regard to connected party transactions in respect of payment to Loveworld Limited (also known as Loveworld Television Ministry – registered number 4691981) and management of conflict of interest
The inquiry had serious concerns regarding the trustees’ decision making relating to the charity’s relationship with Loveworld Limited.

It was established that Trustee C, was the sole shareholder of Loveworld Limited since its incorporation in March 2003. Trustee C had also been trustee of the charity between October 2009 and October 2015. The primary objective of the Loveworld Limited was to advance Christian programming in the UK and to provide entertaining and educational programmes for the diverse demographics of the UK, which it did by carrying out both radio and television broadcasting services.

The trustees informed the Inquiry, payments made by the charity to Loveworld Limited were not grants/donations as indicated in their accounts but represented payments for broadcasting services provided by the company to the charity. On 28 March 2013, the trustees were asked to provide all documentation held by the charity or its trustees that recorded the decisions made in respect of the payments by the charity to Loveworld Limited. On 19 September 2013, the trustees provided only two sets of minutes of trustee meetings (minutes of trustees meeting dated 6 January and 6 April 2012) that appeared relevant to the issue. However, neither set of minutes included any decision or resolution to make payments to a company of which one trustee was sole shareholder.

The trustees did not have any formal contracts in place, or indeed rationale for using Loveworld Limited as opposed to any other broadcaster. Additionally the IM, during his inspection of books and records found no evidence to suggest that any of the trustees considered whether the costs charged by Loveworld Limited were better value than the costs charged by any other service provider. The trustees have failed to take, or have failed to record, any proper decisions as to why such payments are in the best interests of the Charity.

The IM confirmed that as early as 2009, the Audit Report highlighted to trustees that transactions with organisations and companies controlled by trustees were required to be disclosed in the financial statements as related party transactions. Auditors also recommended that trustees seek professional advice on whether these payments were permitted under their governing document, discuss and decide whether the payments were in the best interests of the charity and minute those discussions, ensuring that any conflicted parties withdraw from the meeting during discussions. The IM’s investigation into these matters found that this advice had not been followed and in particular there was no evidence that the trustees had sought legal advice.

The IM’s scrutiny of charity records and documents demonstrated that the trustees had failed to comply with the terms of the charity’s governing document and that they failed to comply with the requirements of section 185 of the Act in paying for services by a company owned by a trustee.

Additionally, the Inquiry identified that the charity had purchased a property in March 2006, costing £1.8 million and allowed Loveworld Limited free use of the property from 2006 until September 2012. The trustees informed the Inquiry that Loveworld Limited had only occupied a “small part of the premises”, on an informal basis, with the charity using the premises themselves until February 2014. They informed the Inquiry that the arrangement had been formalised since 2012 and the company was charged £75,000 per year for use of the property. The Inquiry considers that this level of rent indicates that Loveworld Limited occupied a substantial proportion of the building.

The trustees failed to demonstrate that rent for occupation of the premises was a properly assessed market rent which would cover the charity’s overheads. The trustees stated, that the yearly rental income covered all mortgage costs incurred by the charity, however later stated that the charity’s annual mortgage payment was higher than this.

It was unclear to the Inquiry how the permitted, free use of the premises to Loveworld Limited between 2006 -2012 was in the best interests of the charity and was properly authorised.

This indicates that the trustees failed to act in the charity’s best interests or with reasonable care and skill in terms of their decision-making and in the negotiation of the arrangements with Loveworld Limited and in not seeking appropriate advice regarding formalising occupation of premises by the company. In addition, the fact that the charity was also subsidising a proportion of the company’s utility bills indicates a lack of reasonable care and skill and a failure to use the charity’s resources responsibly. These actions were not in the charity’s best interest or in furtherance of its objects and were misconduct and/or mismanagement in the administration of the charity.

Ventaja Limited
An audit conducted by the IM on appointment also identified purchases in excess of £30,000 by the charity from Ventaja Limited – trustees’ reports and financial statements for year ending 31 December 2013: the charity declared £44,925 of purchases made from Ventaja Limited for decorating and the construction of a stage. The company was wholly owned by Trustee G. The payments were made while, Trustee G was church pastor and zonal pastor (prior to being appointed trustee in May 2014). His wife was also director of the company, church pastor and a salaried employee of the charity. The IM found evidence indicating that Trustee G had employed the services of Ventaja Limited to provide services to the charity but it was unclear from the charity’s records what considerations were made regarding potential conflicts of interest. It is unclear to the Commission that the decision making trustees, in position at the time payments were made, were acting only in the interests of the charity.

The trustees failed to provide any records to evidence that conflicts of interest had been identified or correctly managed prior to the opening of the Inquiry. Although the trustees provided the inquiry with a copy of their new “Conflicts of Interest Policy” in their 2013 response, they did not have any policy which covered the conflict which arose as a result of Trustee G, being a church pastor and trustee, authorising payments from his church to his company and therefore effectively paying his own company. The trustees failed to demonstrate that they had recognised or properly managed conflicts of interest. Consequently the Inquiry found this was misconduct and mismanagement in the administration of the charity.

Financial control & management of the Charity
When interviewed by the Inquiry in October 2013, the trustees explained the structure and administration of the charity to the Commission. The structure involved Chapters (also known as churches) within the charity which were spread across the UK with the use of over 100 premises. The IM found that cash collection and payment recording processes were not uniform across the charity, with a number of basic key controls (for example timely bank reconciliations or maintenance of the SAGE records ) found to be lacking.

Bank Accounts/Assets
The inquiry identified nine active bank accounts that the trustees identified as holding funds belonging to Christ Embassy Nigeria (Christ Embassy Nigeria is a separate company to the charity). The inquiry found no evidence to suggest that any of the banking institutions were aware that they were holding funds controlled by Christ Embassy Nigeria. In addition, the accounts were not named in such a way as would indicate the funds are controlled from Nigeria: for example, two of the active accounts are named Christ Embassy East London.

The inquiry, not being satisfied that the funds held in these accounts were owned by Christ Embassy Nigeria, exercised legal powers and issued orders dated 8 august 2014, under section 76(3)(d) of the Act, freezing six of these nine bank accounts, protecting funds to a value of £615,420.

In the absence of clear evidence to support the trustees’ position, the Inquiry concluded that funds held in the accounts belonged to the charity and these accounts remained frozen until the order was revoked on 24 August 2016. The Inquiry being satisfied that the new board of trustees had assumed control of the charity’s property discharged the freezing order on 24 August 2016.

This demonstrates the trustees’ failure to deal with the bank accounts appropriately and their lack of understanding of financial management and the importance of clearly identifying the charity’s property and/or assets held on behalf of another entity and is mismanagement and/or misconduct in the administration and governance of the charity by the trustees.

Tax related issues
The IM informed the Inquiry that the trustees’ failed to submit the charity’s 2010-11 and 2012-13 Self-Assessment Tax returns on time to HMRC thereby incurring penalties for late submissions. In addition, the IM found that the trustees had failed to comply with information Notices issued by HMRC thus incurring further penalties.

The trustees’ non-compliance and failure to submit the charity’s Self-Assessment forms within statutory deadlines resulted in scrutiny by HMRC creating a risk to the charity’s assets in regard to financial penalties incurred and is further evidence of trustees failing in their duty to protect and manage resources responsibly.

Gift Aid is available on donations made by UK tax payers such that the charity can reclaim the tax already paid on the donation by the donor. This means the charity can receive an extra 25p for every £1 donated. It is the trustees’ responsibility to ensure that the charity has effective systems and internal controls in place to ensure complete and accurate returns are made, reducing the risk of amounts being reclaimed by HMRC and ensuring that the charity receives the Gift Aid promptly and with confidence.

The IM established that the charity had failed to maintain:

*sufficient records or processes to show that expenditure by employees had not been an employee benefit and therefore subject to tax
*sufficient records to show that charity vehicles were being used solely for charitable purposes and not used by trustees/employees for private use
*sufficient records to support the charity’s claim to Gift Aid and to demonstrate the expenditure was in fact charitable

The IM dealt with these inquiries and agreed a settlement with HMRC. During discussions with HMRC, the IM made payments on account of £250,000 in order to minimise interest/penalty charges.

The IM informed the Inquiry, in excess of £1.4m of expenditure was disallowed by HMRC and became subject to tax.

The IM reached final settlement over these matters prior to his discharge.

The trustees’ failure to maintain sufficient records and processes to account for expenditure resulted in scrutiny by HMRC creating a risk of criminal proceedings and loss to the charity’s assets in regard to tax liabilities and is further evidence of trustees failing in their duty to protect and manage resources responsibly.


Whether complied and fulfilled duties and responsibilities as trustees under charity law

The Inquiry found a number of breaches of their legal duties by the trustees as evidenced in the previous sections of this report. Additionally the Inquiry found evidence that the trustees exposed the charity, its assets and/or its beneficiaries to harm or undue risk for example:

Property Related matters
The charity is unincorporated, and as such does not have legal personality and cannot hold property in its own name. Instead property must be held on behalf of the charity by nominated individuals (known as holding trustees, and often in practice one or more of the charity’s trustees). From time to time these individuals will change for example due to retirement or death, and the legal ownership of the property will need to be transferred to the new trustees to ensure that the Land Registry records are accurate.

The charity’s main asset other than cash was its ownership of a number of properties. The Inquiry identified 3 UK properties that were not disclosed to the Commission in the trustees’ first responses or during the October 2013 meeting. The trustees asserted that despite the legal title of the properties being vested in the name of two of the charity’s trustees, the properties “were acquired on behalf of, and held in trust for, Christ Embassy Nigeria”.

The Inquiry noted that the Land Registry entries in respect of the 3 properties made no reference to the beneficial owner being Christ Embassy Nigeria and documentation supplied by the trustees provided no evidence to support their assertions. None of the Land Registry proprietorship registers differed in any material way from those of the properties originally disclosed to the Commission as belonging to the charity. These matters were explored further by the IM. His investigations confirmed that the properties were held legally and beneficially by the charity and that there was no trust in place suggesting they were held on behalf Christ Embassy Nigeria.

The Inquiry obtained evidence that the trustees’ failed to ensure land registry details for charity properties were amended once trustees resigned. This was raised a number of times by Auditors in their reports from 2009 onwards and as a result the trustees failed in their duties and responsibilities as trustees to act in the charity’s best interests.

Insurance
The Inquiry found that the trustees failed to secure adequate insurance to protect charity assets and protect against claims for accidental damage to property/or compensation for accidental injury to third parties. The IM was made aware of an outstanding claim in February 2015, brought by a member of the congregation who was injured at a charity premises in 2012. The IM sought to identify whether any relevant insurant was in place. The trustees confirmed that there was no relevant insurance cover and following legal advice obtained by the IM, he settled the claim, in order to avoid lengthy and costly litigation.

The failings of trustees to act appropriately left the charity open to financial and reputational risk and losses, as well as to risk of litigation.

Planning & Building
The trustees failed to ensure that a property purchased by the charity had the necessary planning permission for use as a place of worship – D1 use as Non-Residential institutions, which include a place of worship and church hall. The previous owner had applied for permission to use the property as a place of worship, in 2003 but the planning application had been refused by the local authority. The charity appealed the decision unsuccessfully. Enforcement action was commenced by Southwark Council (18 April 2011). This was also unsuccessfully appealed by the charity. The continued unauthorised use of the premises as a place of worship by the charity, exposed it to enforcement action by the Council. The IM team liaised with the Council to permit a planned exit from the premised which was vacated in January 2015.

The existence of the enforcement notice is a criminal matter. Any breach of the enforcement notice and continued unauthorised use of the premises as a place of worship exposed the charity to prosecution by Southwark Council. Legal advice obtained by the IM confirmed that the breach could have led to criminal sanctions being imposed against the charity and potentially exposed the charity to confiscation proceedings under the Proceeds of Crime Act.

This demonstrates the trustees’ lack of understanding regarding planning law and regulations which exposed the charity to substantial financial risk as well as legal costs.

Conclusions
The Inquiry concluded that there was serious misconduct and/or mismanagement in the charity’s administration. The former trustees, at the relevant times had not complied with or fulfilled their duties as trustees under charity law. They failed to:

*exercise reasonable care and skill in the execution of their roles and as a result exposed the charity to risk and financial loss
*ensure sufficient financial controls and procedures to protect the charity’s property file their annual accounting information, in accordance with their statutory obligations, on time
*ensure that conflicts of interest were effectively managed comply with the terms of the charity’s governing document in relation to remuneration of trustees
*obtain professional advice during their decision making process and to properly record their decision-making
*comply with planning law and regulations and adhere to enforcement notices, causing the charity substantial financial loss
*address the need for Health & Safety compliance and the lack of adequate property insurance exposed the charity to considerable losses which could have been avoided or minimized with proper management and prompt action

In light of the findings and evidence of misconduct and/or mismanagement, the Inquiry exercised its legal powers under section 79(2)(a) of the Act to remove two of the trustees of the charity.

However the trustees subject to regulatory action resigned prior to the Commission being able to complete the process. Section 79(5) and 82 of The Charities (Protection and Social Investment ) Act 2016 has closed this loophole, thereby allowing the Commission to proceed to remove a charity trustee who has resigned following the Commission having given notice to the charity trustees of its intention to make a removal order. The law has since been amended so that resignations following the Commission issuing a notice of intention to remove a trustee would not prohibit the trustee’s removal and consequent disqualification from action as a trustee in the future.

Regulatory Action Taken
During the course of the Inquiry the Commission exercised its legal powers (Sections 47, 52 and 54 Charities Act 2011), provided by the Act, to issue various orders and directions for the purposes of information gathering from local authorities, private individuals and companies, including financial institutions.

The Inquiry directed trustees to a meeting on 18 October 2013 to discuss regulatory concerns and seek further explanation from the trustees. The charity’s books and records were also inspected on 13/14 November 2013.

The Inquiry, being satisfied in accordance with section 76(1) of the Act, that there had been misconduct and / or mismanagement in the administration of the charity and that it was necessary or desirable to act for the protection of the property of the charity, used a number of regulatory powers, under the following sections of the Act:

*section 76(3)(d) orders (8 August 2014), directing the banks not to part with the charity’s property without the Commission’s prior written consent, protecting £615,420 of the charity’s funds

*section 76(3)(g) appointing an Interim Manager on 6 August 2014 (appointment to take effect from 11 August 2014) and then under 337(6) varying the order (25 January 2016) to authorise the
*Interim Manager to appoint a new board of trustees
section 337(6) discharging (18 November 2014) the order not to part by further order, once the

*Interim Manager assumed control of the charity’s property

The former trustees exercised their right to appeal (8 August 2014) to the First-tier Tribunal, General Regulatory Chamber (Charity) against the order appointing the Interim Manager. The appeal was withdrawn on 20 January 2015 with the charity’s legal representatives, notifying the Commission that the trustees were “now willing to accept that the statutory threshold under section 76 of the Act was met in the present case”.

Appointment of an interim manager
The Inquiry appointed an interim manager, Rod Weston of Mazars LLP, (the IM) on 6 August 2014 under section 76(3)(g) of the Act to take over the management and administration of the charity to the exclusion of trustees. The trustees were not excluded from performing the religious and/or spiritual functions connected with their roles as Pastors within the charity.

The scope of the IM’s appointment included:

*taking control of the management and administration of the charity to the exclusion of trustees and taking steps to secure and protect charity property

*reviewing the governance and administration of the charity and taking remedial action in the best interests of the charity

*reviewing the charity’s financial controls, systems and reporting procedures, safeguarding funds and ensuring proper expenditure controls and governance
consider whether any of the decision making trustees were personally liable for any breach of duty/loss of the charity, taking remedial action to regularise any breaches of duty in the best interest of the charity

The costs of the IM’s appointment, including legal advice and fees that would have been necessary and incurred by any trustee, amounted to £1,244,983.50 excluding VAT. The costs of the IM’s appointment were met out of the charity’s funds and are itemised as follows:

*fees directly related to work as IM – £390,358.40
*professional fees – £854,625.10 (relating to work conducted by 3rd parties on behalf of the IM)
*In addition £208,000 of work was undertaken by the IM on a pro bono basis.

As part of his appointment, the IM completed a full governance and infrastructure review of the charity and its activities. His initial findings, on 9 October 2014, corroborated the Commission’s regulatory concerns relating to the charity, reporting that “the board of trustees appears to be fragmented” and “appear to have little appreciation of their roles, duties and obligations as Trustees”. He identified a number of Health and Safety risks and concerns as well as legal issues relating to property matters which had failed to be dealt with by the trustees and which posed financial risks to the charity. The IM’s investigations found failings in the charity’s governance, leadership and management structures and personnel, including identifying that the charity had insufficient financial controls and procedures.

Remedial actions were taken to regularise the charity’s governance to ensure it was fit for purpose. This encompassed the following:

*establishing a central record of all properties leased and/or rented by the charity to ensure that the terms of leases were being met appropriately and suitable exit plans were in place where leases were due to expire
*establishing an accurate record of assets (ownership of a number of properties, motor vehicles and a range of fixed assets ) owned by the charity, gaining control of the charity’s property portfolio and cash reserves – the IM reduced the number of bank accounts in operation from approximately 40 to 8 and in September 2015 took control of just under £12,000,000

*introduction and implementation of financial controls, systems and reporting procedures, regularising the management of income and expenditure

*Health and Safety audits and fire risk assessments were carried out; training provided to staff and implementation of suitable Health & Safety policies and procedures
extensive liaison with HMRC resulting in settlement of the charity’s tax liabilities
recruitment of new board of trustees

*induction and training of new trustees

Restitution
On 18 November 2015, the IM considered professional advice and the particular circumstances of this case and decided that restitution (by way of civil claims against former trustees for breaches of duties and losses to the charity was not in the best interests of the charity.

Following the appointment of a new Board of Trustees on 12 April 2016, significant progress has been made to address the governance and improve oversight and control by the new trustees, as a result of which the IM was discharged on 12 April 2016.

Issues for the wider sector
Financial Controls & Accounting Records
Proper financial controls are a necessary feature of any well-run organisation. Because of the special characteristics of the charitable sector, they play an essential part in helping to show potential donors and beneficiaries that a charity’s property is safeguarded, and that its management is efficient.

Trustees are equally responsible for the overall management and administration of the charity. Every charity’s accounting records must be sufficient to show and explain its transactions and disclose with reasonable accuracy its financial position. Trustees should ensure that financial controls are not only adequate but provide sufficient information to satisfy the trustees that the controls are being observed. If, due to the nature of the charity, its work, location and /or set up the trustees delegate supervision of financial arrangements to one or a small number of trustees or employees, they need to ensure that there are arrangements in place for proper reporting back to the whole trustee body. In this way, system failures or issues can be identified at an early stage.

Therefore, in order to show that they are complying with their legal duties, trustees must keep records and an adequate audit trail to show that the Charity’s money has been properly spent on furthering the Charity’s purposes for the benefit of the public.

Conflicts of Interest Policy
Charity trustees should ensure that they have a conflicts of interest policy in place to ensure that they are fully aware of their responsibilities and that any conflicts that do arise are appropriately managed.

Where a charity trustee has a conflict of interest they should follow the basic checklist set out in the Commission publication Conflicts of interest: a guide for charity trustees (CC29) and where necessary or appropriate take professional advice.

The law states that trustees cannot receive any benefit from their charity in return for any service they provide to it or enter into any self-dealing transactions unless they have the legal authority to do so. This may come from the charity’s governing document or, if there is no such provision in the governing document, the Commission or the Courts. Further information is available from Trustee expenses and payments (CC11).

Charity Property
Charity trustees have a general duty to manage their charity’s resources responsibly, reasonably and honestly. This means not exposing their charity’s assets, beneficiaries or reputation to undue risk. It is about exercising sound judgement and then taking decisions that a reasonable body of trustees would do.

Trustees must put appropriate policies, procedures and safeguards in place and take all reasonable steps to ensure that these are followed.

If a charity owns land or buildings, trustees need to know on a continuing basis what condition it is in, that it is being properly used, and that adequate insurance is in place. The essential trustee: what you need to know, what you need to do (CC3) makes clear that decisions about charity land and property are important. If the charity owns or rents land or buildings, the trustees need to:

*make sure the property is recorded as belonging to the charity
know on what terms it is held
*ensure it is properly maintained and being correctly used
*make sure the charity has sufficient insurance

A charity’s governing document or the general law can provide a ‘power to insure’. If the governing document imposes a positive duty to insure, if trustees then fail to insure property, this will be a breach of trust. More details are available in the Commission’s guidance Charities and insurance (CC49).

Trustee Decision Making
Charity trustees are responsible for governing their charity and making decisions about how it should be run. Making decisions is one of the most important parts of the trustees’ role. Trustees can be confident about decision making if they understand their role and responsibilities, know how to make decisions effectively, are ready to be accountable to people with an interest in their charity, and follow the 7 principles that the courts have developed for reviewing decisions made by trustees. Trustees must:

*act within their powers
*act in good faith and only in the interests of the charity
*make sure they are sufficiently informed
*take account of all relevant factors
*ignore any irrelevant factors
*manage conflicts of interest
*make decisions that are within the range of decisions that a reasonable trustee body could make

It is important that charity trustees apply these 7 principles when making significant or strategic decisions, such as those affecting the charity’s beneficiaries, assets or future direction.

Share this:

Related posts

2020 Budget, Trump’s impeachment, Uwajumogu’s death, Adoke’s arrest, others topped this week news

It’s been such a busy week with so many stories. It’s possible that you may have missed some of our most interesting stories from this week.

The 2020 Budget, Trump’s impeachment, Orji Kalu’s dilemma, Uwajumogu’s death, Adoke’s arrest and others topped this week news trend.

To make sure you’re up-to-date, The Nation brings you a brief round-up of the major stories this week in case you missed the mark. ALAO ABIODUN reports.

Here is a roundup of the major political news stories this week below –

Donald Trump impeached by U.S House of Reps

The U.S. President, Donald Trump, has been impeached by the country’s House of Representatives.

The house voted late Wednesday to impeach the president on his 1,062nd day in office for alleged obstruction of Congress and abuse of power related to his dealings with Ukraine.

A trial will now be set up in the Senate to decide whether he remains in office.

Mr Trump is only the third U.S. President to face such trial and if the odds go against him, he will become the first to be removed from office via the impeachment process.

After several hours of heated dispute on the House floor between two leading parties in the U.S – Democrats and Republicans – the lawmakers voted largely along party lines.

The proceedings on Wednesday began with members of Mr Trump’s Republican Party calling for votes on procedural issues in an effort to frustrate the process.

Democrats control the House 233 to 197 seats over Republicans, with one independent and four vacancies.

According to the Washington post, the Democratic-controlled House passed two articles of impeachment against Trump — abuse of power and obstruction of Congress — related to the president’s attempts to withhold military aid to Ukraine and pressure its government to investigate former vice president Joe Biden.

Mr Biden is a potential presidential candidate of the Democratic Party and could be Mr Trump’s major challenger in the upcoming 2020 U.S general elections.

The House voted 230 to 197 to approve the article accusing the president of abuse of power. On the obstruction of Congress vote, which followed soon after, the tally was 229 to 198.

Trump’s Republican Party members in the house all voted against both articles, but it was not enough to stop the process.

The Senate trial on whether to remove the president is expected to begin in early January.

Should Trump eventually be removed, Vice President Mike Spence will step in.

Senate confirms new chairpersons for FIRS, AMCON

The Senate has confirmed the appointment of Muhammad Nami as the Executive Chairman of the Federal Inland Revenue Service.

Also confirmed are members and representatives of geopolitical zones for FIRS.

Those confirmed are James Yakwen Ayuba – Member (North Central); Ado Danjuma – Member (North West) and Adam Baba Mohammad – Member (North East)

Others are A. Ikeme Osakwe – Member (South East); Adewale Ogunyomade – Member (South West) and Ehile Adetola Aigbangbee – Member (South South).

Representatives of MDAs confirmed are Ladidi Mohammad – Member Attorney-General of the Federation; Godwin Emefiele – Member Central Bank of Nigeria; Fatima Hayatu Member – Ministry of Finance and Maagbe Adaa – Member Revenue Mobilisation Allocation and Fiscal Commission

Others are Umar Ajiya – Member Nigerian National Petroleum Commission; T. M. lsah – Member Nigerian Customs Service and Registrar General – Member Corporate Affairs Commission.

The confirmation comes about a week after President Muhammadu Buhari wrote to the Senate seeking their confirmation.

It was sequel to a presentation of the report of the Senate committee on finance.

The chairman of the committee, Solomon Olamilekan, who made the presentation, recommended that the Senate confirm the appointment of the nominees.

The Senate also confirmed the appointment of Edward Adamu as the chairman of the Asset Management Corporation of Nigeria (AMCON) – following the presentation of the Senate Committee on Banking, Insurance and Other Financial Institutions.

Alleged Fraud: Maina to remain in jail till 2020

The former chairman, Pension Reform Task Team (PRTT), Abdulrasheed Maina, who is facing trial for alleged money laundering will remain in the Correctional Centre in Kuje, till January 2020.

Mr Maina’s son, Faisal, is also being prosecuted for money laundering by the anti-graft agency, EFCC.

At the last adjourned date, the court had granted Faisal’s plea to be transferred to Kuje Correctional Centre from Police Tactical Squad, Asokoro.

Mr Maina is being prosecuted by the EFCC on a 12-count charge bordering on money laundering, operating fictitious accounts and other fraudulent activities.

The former PRTT chairman, who was in hiding for almost two years, was arrested by the State Security Service (SSS).

The SSS then handed over Mr Maina to the EFCC, which had declared him wanted for over a year.

Mr Faisal was arrested alongside his father in September. The father is accused of diverting N100 billion of pension funds.

His son is accused of operating an account he used to divert various sums of money, including N58 million.

The two men were arraigned by the EFCC on October 25 on separate charges. They pleaded not guilty.

At the resumed hearing of the matter on Wednesday, the presiding judge, Okon Abang, adjourned Mr Maina’s trial to January 13 to hear his application for bail variation and that of Faisal to January 20, for the continuation of his trial.

Meanwhile, Justice Abang had said that though it would not be convenient for the court to take trial, but the arguments for Mr Maian’s application for bail variation would be taken.

However, the EFCC’s lawyer, Mohammed Abubakar, said he was ready for the continuation of the trial and that the prosecution’s next witness was in court.

Buhari signs 2020 budget

President Muhammadu Buhari has signed the 2020 appropriation bill into law.

He signed the bill at about 3:30 p.m. on Tuesday.

The National Assembly had on December 5, 2019, passed the budget estimates presented by Mr Buhari on October 8, 2019.

The National Assembly increased the budget estimates from N10.33 trillion to N10.50 trillion.

The passage was a sequel to the presentation of a report by the chairman of the Senate Committee on Appropriation, Barau Jibrin.

The signing was witnessed by Vice President Yemi Osinbajo, President of the Senate, Ahmed Lawan and Speaker of the House of Representatives, Femi Gbajabiamila.

Others are the Secretary to the Government of the Federation, SGF, Boss Mustapha, Minister of Finance, Zainab Ahmed, Minister in charge of Budget and Planning, Clement Agba and the Director-General of the Budget Office, Ben Akabueze.

A breakdown of the budget showed that N560,470,827,235 was budgeted for Statutory transfer; N2,725,498,930,000 for debt servicing; N4,842,974,600,640 for recurrent expenditure; N2,465,418,006,955 for capital expenditure; and N2.28 trillion for fiscal deficit.

When the National Assembly passed the bill last Thursday, new projects inserted into the budget moved it up to ₦10.594 trillion.

A breakdown of the inserted projects obtained by PREMIUM TIMES showed that the country may end up spending more on what anti-corruption agents and activists have identified as “vague, frivolous, self-enrichment projects smuggled into the budget by federal lawmakers.”

The new projects are expected to cost Nigeria about ₦264 billion.

Mr Buhari signed the budget document into law on the occasion of his 77th birthday on Tuesday, and commended the National Assembly for speedy passage of the bill.

“It is my pleasant duty, today, on my 77th birthday, to sign the 2020 Appropriation Bill into law,” a message posted on Mr Buhari’s twitter page said.

“I’m pleased that the National Assembly has expeditiously passed this Bill. Our Federal Budget is now restored to a January-December implementation cycle.”

FG declares Dec. 25, 26, Jan.1, 2020 public holidays

The Federal Government has declared Dec. 25 and Dec. 26 as well as Jan. 1, 2020 as public holidays for Christmas, Boxing Day and New Year celebrations.

The Minister of Interior, Ogbeni Rauf Aregbesola, announced this on Thursday in Abuja through a statement issued by the Permanent Secretary, Ministry of Interior, Mrs Georgina Ehuriah.

Aregbesola felicitated with Christians and all Nigerians both at home and abroad on the 2019 Christmas and New Year celebrations.

He enjoined all Christians to live by the virtues and teachings of Jesus Christ.

According to him, those virtues hinge on compassion, patience, peace, humility, righteousness and love for one another.

The minister said that living by them would guarantee an atmosphere of peace and security in the country.

Aregbesola said that the determination of government toward peace and security would engender inflow of foreign direct investment, thereby revitalising the nation’s economy.

He said it would also improve employment opportunities for the teeming youths in the country.

The minister expressed confidence that 2020 would be a breakthrough year for all Nigerians.

Lawan, APC, senators, others mourn as Imo Senator Uwajumogu dies

Chairman of the Senate Committee on Labour and Employment Senator Benjamin Uwajumogu has died.

Uwajumogu (Imo North) attended plenary on Tuesday. Less than 24 hours after, he was gone.

The cause and circumstances of the death of the 51-year-old could not be confirmed last night but sources said he slumped suddenly yesterday morning in his house while having his bath. He was confirmed dead at an Apo hospital.

Senate President Ahmad Lawan expressed shock, especially when Uwajumogu “was full of life” at the chamber on Tuesday.”

Lawan, in a statement by his Media Adviser, Ola Awoniyi, commiserated with the deceased’s family, Imo State and friends over the loss.

He added: “But God gives and takes in line with his supreme sovereignty, so we cannot question His will.

“Senator Uwajumogu’s sudden death is shocking and a painful loss to the ninth National Assembly where he always made robust contributions to debates and other activities of the upper legislative chamber.

“He will be greatly missed by all of us and staff of the Senate.”

The Senate President prayed that God will comfort his loved ones and grant them the fortitude to bear the loss.

Senate Minority Leader, Senator Enyinnaya Abaribe, described Uwajumogu’s death as a huge loss to Nigeria, his constituents and Imo State.

Supreme Court affirms elections of eight governors

There was jubilation on Wednesday as the Supreme Court affirmed the election victories of governors in eight states.

They are: Babajide Sanwo-Olu (Lagos), Dapo Abiodun (Ogun), Seyi Makinde (Oyo), Abdullahi Sule (Nasarawa), Nasir El-Rufai (Kaduna), Aminu Masari (Katsina) Dave Umahi (Ebonyi) and Udom Emmanuel (Akwa Ibom).

The Supreme Court held that the appellants against the eight governors failed to prove their cases and dismissed their appeals.

Related posts

US discussing Goldman Sachs 1MDB settlement of below US$2 billion

GOLDMAN Sachs Group Inc could end up paying less than US$2 billion (RM8.32 billion) to resolve US criminal and regulatory probes over its role in raising money for scandal-ridden Malaysian investment fund 1MDB, said three people familiar with the negotiations.

The Justice Department and other federal agencies, in internal discussions held in recent weeks, have weighed seeking penalties of between US$1.5 billion and US$2 billion, the people said. That’s less than what some analysts have signalled Goldman might have to pay. While a settlement could be announced as soon as next month, the terms could change before a deal is finalised, said the people who asked not to be named in discussing private negotiations.

The bulk of the penalties would be paid to the Justice Department. Attorney General William Barr has directly immersed himself in the case, according to another person familiar with the matter. Earlier this year, Barr obtained a waiver to let him oversee the investigation, even though his former law firm, Kirkland & Ellis LLP, is representing Goldman. It’s unclear whether the Justice Department is seeking a guilty plea from the bank.

A Justice Department spokesman declined to comment, as did spokesmen for the Federal Reserve and Securities and Exchange Commission, which have been pursuing civil investigations into Goldman. The bank reiterated its previous statements that it continues to cooperate with authorities.

Goldman Sachs shares climbed as much as 3.1 per cent on the discussions, the biggest intraday gain in almost two months. The bank’s stock is up 33 per cent this year.

Reputation blow

Goldman’s involvement with 1MDB has triggered one of the biggest blows to its reputation in recent years, leading to a litany of investigations and embarrassing revelations of a former banker bribing government officials. The Wall Street firm has been eager to move past the scandal, and a US settlement of below US$2 billion would put it on track to avoid the worst-case scenario that some analysts pegged at as much as US$9 billion in global fines.

Goldman is separately negotiating a settlement with Malaysian authorities, who have in recent discussions floated much lower figures than their public stance of wanting to recover US$7.5 billion. Goldman is still privately seeking to reduce its sanctions, arguing that the crimes were committed by a rogue employee and that the bank wasn’t aware of the misconduct.

If it pays anywhere close to US$2 billion, Goldman would join other banks that have been subjected to massive US penalties this decade. In 2012, HSBC Holdings Plc set a new bar when it agreed to pay more than US$1.9 billion to settle allegations that it violated sanctions and enabled money laundering. BNP Paribas SA was then hit with the largest financial penalty ever in a US criminal case when it paid US$9 billion over sanctions violations.

In previous international corruption cases, the US has sometimes credited penalties paid to other countries for the same conduct. For example, a US$1.3 billion US settlement last year with Societe Generale SA included a credit of almost US$300 million that was paid to French authorities.

1MDB became the hub of a global corruption and embezzlement scandal in which a massive amount of cash was allegedly diverted to corrupt officials and financiers. Goldman helped the state investment fund raise cash, with the Wall Street bank making about US$600 million from US$6.5 billion in bond sales in 2012 and 2013.

Yacht, movies

Tim Leissner, a former senior Goldman banker in Southeast Asia, admitted last year to bribery and pleaded guilty to US charges that he conspired to launder money.

Money diverted from 1MDB was allegedly spent around the world, including on a super yacht, the Hollywood movie “The Wolf of Wall Street” and high-end real estate. Authorities in several countries have been working to recoup some of the missing billions and punish those involved.

There are signs that Goldman has made progress in its negotiations with US agencies and may also have a sense of how much it might pay to settle the investigations.

For instance, Goldman stopped buying back its stock in the third quarter as it began discussions with US authorities on 1MDB. Goldman later restarted its buybacks as talks with the government progressed and the firm added US$300 million to its estimate of possible legal losses, chief financial officer Stephen Scherr said on an October conference call with analysts and investors.

Compliance failures

Goldman has previously blamed Leissner for concealing his wrongdoing from the firm’s compliance efforts. Leissner has countered that the bank’s culture of secrecy led him to bypass compliance. US authorities allege that in addition to Leissner, two other bankers were aware of the scheme, including one who went on to become the bank’s top dealmaker in the region.

Earlier this year, the Fed banned Leissner and his former deputy, Roger Ng, from the banking industry. Ng faces US accusations of money laundering and bribery, and also Malaysian charges of aiding the bank’s efforts to mislead investors. – Bloomberg

Related posts

Not to be underestimated: Bank of America Premium Rewards credit card review


If you qualify for Bank of America Preferred Rewards, the Bank of America®️ Premium Rewards®️ Visa®️ credit card has the potential to be quite a lucrative card to use on everyday spending. For those who prefer other banks, there are better earning travel cards available. Card Rating*: ⭐⭐⭐½

*Card Rating is based on the opinion of TPG’s editors and is not influenced by the card issuer.

I’ll be honest. I haven’t always been a fan of Bank of America credit cards. Though affordable with low or nonexistent annual fees, most lacked the perks that I’ve always associated with my favorite cards. However, the more familiar I get with the Preferred Banking Rewards program (and the more useful fixed-value points currencies become), the more I see the benefits of having a Bank of America card.

This card isn’t like other products that have $450 annual fees and a ton of perks; this card has a modest $95 annual fee and a more modest selection of benefits. Still, it offers great flexibility in redeeming points and yields extraordinary earn rates if you can maximize BofA’s Preferred Banking Rewards program.

In This Post

Who is this card for?

The Premium Rewards credit card has wide appeal to both points fans and credit card novices. It might not have the most lucrative points or numerous transfer partners, but what it does offer is flexibility.

I think of it as a stress-free travel card, since points are worth 1 cent apiece no matter what you redeem them for — you don’t have to worry about getting the maximum value out of every point, which can sometimes be time-consuming and frustrating.

If you like the idea of redeeming your points as a statement credit against big purchases that aren’t covered by points — such as new luggage or a TV — then this would be the card to get. You can redeem points for any purchase, whether it’s a flight, a new car or an over-the-top dinner. The points function essentially like cash.

The Premium Rewards card is also a strong option for those who tend to spend in broad bonus categories like travel and dining (2x and up with this card), but who also want solid rewards (1.5x and up) for non-category bonus spend.

The earning rate is even better if you’re already a Bank of America customer and can maximize the Preferred Rewards Program (more on that later).

It’s also a great choice for semi-frequent travelers since it comes with valuable perks like an up to $100 Global Entry/TSA PreCheck credit, an up to $100 airline credit, trip delay/cancellation insurance, baggage loss/delay insurance and no foreign transaction fees, so you won’t be hit with any surprise charges when using your card abroad.

Further reading: Is the Bank of America Premium Rewards card worth the $95 annual fee? 

Modest but valuable welcome bonus

With the Premium Rewards card, you’ll receive 50,000 bonus points after spending $3,000 on purchases in the first 90 days of account opening. These points have a fixed value of 1 cent each, meaning that 50,000 points are worth $500. This far from the most lucrative bonus out there, but $500 can go a long way towards airfare, hotel costs or anything in between.

When you consider that BofA is essentially paying you $5 every year (after you redeem the up to $100 airline credit) to have this card, you’re basically getting $500 for free just for signing up and meeting the minimum spend. Use the sign-up bonus to treat yourself to something extravagant, like a helicopter or private jet ride on Blade.

The sign-up bonus alone is worth enough to get me 2.5 trips on Blade Bounce in NYC. (Photo by Blade)

While Bank of America doesn’t have any published restrictions that apply specifically to earning welcome bonuses, remember that it does have a 2/3/4 rule when it comes to card applications. You can only get approved for two Bank of America cards in a two-month period, three cards in a 12-month period and four cards in a 24-month period.

There have also been recent reports of a threshold similar to Chase’s 5/24 rule that limits how many cards across issuers you can get within a year in order to be approved for a new BoA card, though the exact threshold is uncertain and Bank of America has not confirmed the existence of a set policy.

Perks and benefits

While the Premium Rewards card doesn’t hold a candle to top-tier cards like The Platinum Card® from American Express, it does come with a nice set of perks for the low annual fee — a lot more than basically any other mid-tier card out there. Here are my favorite perks and their value:

$100 airline incidental credit. This credit works like the Amex airline fee credit in that you can only use it for purchases such as seat upgrades, baggage fees, in-flight services and lounge fees (though not airfare). You receive the credit every year and if you’re able to use the full amount, you’re essentially getting paid $5 a year to be a cardholder. Unfortunately, it’s not as flexible as the Chase Sapphire Reserve’s travel credit or the Citi Prestige’s air travel credit, but it’s still a great benefit for someone who travels a few times a year. It only works on certain domestic airlines but it’s processed automatically, so you don’t have to call in and apply it to a certain purchase.

Global Entry. I love having Global Entry — it’s saved me from standing in countless hours of security and customs lines. Premium Rewards cardmembers get an up to $100 credit (every four years) that can be applied toward purchasing Global Entry or TSA PreCheck. It’s surprising that this card offers a Global Entry credit, as that’s usually only offered by top-tier rewards cards with higher annual fees (although the Capital One® Venture® Rewards Credit Card is another mid-tier card that offers this benefit). And if you’re already part of the program, you can still use the credit for a friend or family member’s application.

Trip insurance. It’s always important to have trip insurance since you never know when your travel plans will go awry. This card provides reimbursement of up to $5,000 per person, per trip, for any unused, prepaid, non-refundable travel expenses including passenger fares, tours and hotels if you have to cancel due to a covered reason. And if your flight is delayed for more than 12 hours, you’re eligible for reimbursement of $500 in expenses per ticket. With many issuers ditching trip insurance, this benefit continues to be a compelling reason to use this card to book travel.

Baggage delay/loss insurance: Similar to trip insurance, you’ll be eligible for protection if your baggage is lost, stolen or damaged. This provides up to $100 per day (up to five days) when your bag is delayed for more than six hours. If your luggage is stolen or lost by a travel provider, you’ll be eligible for reimbursement for the contents of the bag.

IMG-Away-Luggage
If your bag is lost, stolen or damaged, the card’s protection plan will help pay to replace all of your items. (Photo courtesy of Away)

Purchase protection. I’ve used purchased protection many times and it’s saved me thousands of dollars over the last year — Amex paid me $1,400 for a broken watch and my Sapphire Reserve reimbursed me $2,600 for a painting that was damaged in transit. You’ll get similar protection with the Premium Rewards card, which will repair, replace or reimburse you up to $10,000 for lost or damaged items purchased on the card. If you want to return an item within 90 days of purchase but the retailer won’t accept the return, you can submit your receipt and be reimbursed up to $250 (up to $1,000 annually).

Rental car insurance. Last, this card will give you secondary coverage when renting a car — meaning it will kick in only after you’ve filed a claim with your personal insurance. While not as good as many of Chase’s cards that offer primary coverage, it’s pretty good for a no-annual fee card (after maximizing the airline credit).

Further reading: Reasons to get the Bank of America Premium Rewards card

Earn points

With this card, you’re earning 2x points on travel and dining and 1.5x point on everything else. Travel and dining are defined broadly, meaning there are a lot of expenses that can qualify for double points. The real value for me personally is the 1.5x on everyday spending. As a member of the Preferred Rewards program, you can earn up an impressive 2.625x on non-bonus spending. That’s higher than any flat-rate card out there.

The Premium Rewards card doesn’t earn traditional points or miles that can be transferred and redeemed with travel partners but rather acts more like a cash-back card with huge earning potential. I honestly never thought I’d be thinking about cash back, but as airlines have devalued frequent flyer programs, the idea seems more appealing.

Although we value most airline miles at more than 1 cent each, that’s mainly based on being able to find premium cabin saver seats. With it becoming harder and harder to get good value out of points and miles, that’s where this card can come in handy.

As I mentioned earlier, points are flexible with the Premium Rewards card; you can use them on anything — airlines, the gym, etc. — essentially anywhere that accepts Visa. Your points can go toward paying for those purchases (as a statement credit) and the credit posts automatically.

(Photo by Summer Hull/The Points Guy)
With the Premium Rewards card, you can earn up to 3.5x on hotel stays — including getaways to the W Aspen Hotel pictured here. (Photo by Summer Hull/The Points Guy)

Further reading: How I earned and redeemed with BoA Premium Rewards 

Redeem points

Another thing I like about this card is that it’s zero stress and consumes very little time. You don’t need to jump through hoops to find award availability and you don’t have to go to a specific portal if you want to use your points to pay for your gym. Since points are worth the same no matter what you redeem for, you’re not penalized for redeeming for cash back. You just redeem for whatever you want.

There a few ways to redeem points:

  • Cash back — You can receive cash back as a statement credit or deposit it into an eligible BofA checking or savings, Merrill or 529 college savings account
  • Travel purchases — You can book flights directly through the BofA travel portal. This is a good way to redeem points because you’ll still be eligible to earn award miles and elite credits by flying on a paid ticket (although personally I’d recommend buying directly from the carrier because sometimes when buying through a travel portal you’ll get a lower fare class).
  • Gift cards — A final option allows for converting points into gift cards at popular merchants such as Amazon, Whole Foods and Starbucks. I wouldn’t plan on going this route since it’d be smarter to just purchase the items and redeem your points as a statement credit in case you have to return the item.

I especially love that you can convert points directly into cash that can go straight into a 529 college savings account. Last year, I converted the points from my sign-up bonus and deposited them directly into 529 accounts for my nieces and nephews. From there, I used my points as statement credits against BLADE trips to my office, which saved me hours of time.

And if you’re solely focused on travel rewards, this card can cover travel expenses that you can’t redeem miles for, like offsetting surcharges on an award ticket or amazing experiences on the ground.

Jack Skellington from Tim Burton’s “The Nightmare Before Christmas” hosts the new “Disney’s Not So Spooky Spectacular” fireworks show at Magic Kingdom Park. This spellbinding display of state-of-the-art projection effects, lasers, lighting and dazzling fireworks will delight guests during Mickey’s Not-So-Scary Halloween Party, a separately ticketed event held on select nights Aug. 16-Nov. 1, 2019, at Walt Disney World Resort in Lake Buena Vista, Fla. (David Roark, photographer)
Because points are always worth one cent each, you can use points to pay for travel experiences like your tickets to Disney World for Mickey’s Not-So-Scary Halloween Party. (Photo by David Roark)

Originally when I heard that points were worth only 1 cent each, I was a bit disappointed. But it’s honestly nice that I don’t have to jump through hoops to find award availability and I don’t have to feel bad about redeeming these points for maximum value. I can use them whenever and for whatever I want.

Further reading: How to redeem points using the BoA Premium Rewards card 

Using the Preferred Rewards program to your advantage

To get the best value out of your Bank of America cards, you need to understand Bank of America’s Preferred Rewards program. Those who hold considerable assets in eligible BofA or Merrill accounts — including retirement or investment accounts — are eligible for increased rewards when spending on the Premium Rewards card. To enroll in BofA Preferred Rewards you’ll need:

An eligible Bank of America personal checking account and a 3-month average combined balance of $20,000 or more in a Bank of America account and/or Merrill investment accounts.

There are three tiers in Preferred Rewards, and your tier is based on how much money you have in your accounts. This will determine your earning with the Premium Rewards card.

Spend Categories Regular Cardholder Tier 1 – Gold ($20,000 – $50,000) Tier 2 – Platinum ($50,000 – $100,000) Tier 3 – Platinum Honors ($100,000+)
Travel/Dining Earnings 2x points 2.5x points 3x points 3.5x points
Other Earnings 1.5x points 1.875x points 2.25x points  2.625x points

At the base level of 2x points on travel and dining and 1.5x points on everything else, the card is pretty standard. It’s good, but the Citi® Double Cash Card and Fidelity Rewards Visa Signature Card are cash-back cards with higher earning rates on everyday spend and no annual fees (though those cards don’t come with any perks).

But the numbers get pretty spectacular when you’re able to get 2.625x points on everyday spend and 3.5x points if you meet the highest banking threshold. That said, I’ll still probably put most of my travel and dining spend on my Sapphire Reserve because I value Ultimate Rewards points at 2 cents each — meaning I get 6x points (toward travel per dollar spent). But 3.5x points back on travel and dining and 2.625x points on everything else for those who don’t value travel as much as I do — and want flexibility when redeeming points — is quite strong.

airline

The way I see it is that if you can maximize Preferred Rewards, you’re essentially getting a no-annual-fee card (after using the airline credit) that gives you 3.5x on travel and dining and 2.625x on everything else. If you’re looking for a straight cash-back card, no other card comes close to that.

The moment I heard of this card, I immediately moved $100,000 into a Merrill investment account so I could start qualifying for Platinum Honors. BofA also allows the option to roll over an existing 401(k) account into a Merrill retirement account, so that this could be an easy way to qualify for Preferred Rewards.

Further reading: Stop ignoring the Bank of America Preferred Rewards program 

Bottom line

In general, this card is about diversifying your stock of points and using them for the purchases that normal airline miles or credit card points can’t cover. It’s great if you want to use your points to splurge on a crazy watch or piece of jewelry. Or you can be generous and use the points to better your family.

It’s also an interesting option for small business owners — I know a lot of doctors and executives, and at a certain point there is mileage overload where they have too many Amex points and physically can’t redeem all of them for travel (because that is the best way to redeem MR points). So if you own your own business, this card can offer 2.625x points on all of your spend and 3.5x points on all travel and dining, which you can easily redeem for cold hard cash.

For those who have been eyeing a straight-up cash-back card, this could be your best option. Simply put, it’ll be improving your bottom line — either for you personally or for your business. You don’t have to waste time figuring out how to get the most value out of your points, as the stress-free redemptions make this an easy card to manage.

BofA is obviously telling customers that they will be rewarded with its Preferred Rewards program if they move their assets to BofA. On top of the earning and redeeming possibilities, it comes with a solid sign-up bonus and some pretty nice perks, which are worth far more than the card’s annual fee. For these reasons, I continue to be excited to have status with Preferred Rewards banking and the Bank of America®️ Premium Rewards®️ Visa®️ credit card in my wallet.

Official Application Link: Apply for the Bank of America Premium Rewards Visa Credit Card 

Additional reporting by Madison Blancaflor.

Featured photo by Isabelle Raphael/The Points Guy.

Related posts

Top Business Software to Make Improvements in Finance Department

Budget management application for company and personal financing is readily available in the market to make things better. If you desired to enhance the financing for your business there is a need to set up for online banking. Take a total view of your existing business condition and finance management approaches.

Let’s suppose your service is going excellent and you need cash for any function. Budget management application for organisation and personal financing is offered in the market to make things much better. If you wanted to improve the finance for your service there is a requirement to set up for online banking. There are a lot of techniques to improve your service processes and enhance financing department for your company. Take a complete view of your current business condition and finance management approaches.

Related posts

SoftBank

Fair, the vehicle subscription startup backed by SoftBank, is loading its executive team with veterans in the tech, venture and automotive industries as it seeks to build out its Uber leasing program and expand beyond North America.

Fair.com today announced three key hires to lead the development of its car subscription app, financing department and leasing program with Uber.

Jay Trinidad, a former Google and Discovery Networks executive, is now chief product officer. Trinidad will direct the company’s app development and technology efforts. Former chief accounting officer of TrueCar John Pierantoni has been hired as senior vice president of finance and risk.

Pat Wilkison, general partner of venture firm Exponential Partners — an early investor in Fair — will run the startup’s Uber program.

The three hires are critical additions for the three-year-old startup as it tries to convince consumers to try its car-as-a-service platform over buying or leasing a vehicle from a traditional dealership or other online sales upstarts. The advantage for Fair, aside from the $1.5 billion treasure chest it has amassed — is the platform itself.

The company was founded by automotive, retail and banking executives, including Scott Painter, former founder and CEO of TrueCar, on the premise that today’s consumers, including those in the gig economy, want flexibility.

Fair has tweaked the traditional lease to give consumers more options. Users can subscribe to the program and switch vehicles through the term of their “lease.”

It’s a capital-intensive business model that requires the kind of experience that Painter believes these three executives can deliver.

The hires will help drive Fair’s aggressive efforts around payment, infrastructure and financial planning as it scales its flexible car ownership model internationally and tries to make a name for itself on the global stage.

“A critical part of our transformation effort is deepening our bench of talented executives to set us up for success now and into the future,” Painter said.

The three hires come on the heels of rapid growth, a critical acquisition and huge Series B funding round of $385 million led by SoftBank, with participation from Exponential Ventures, Munich Re Venture’s ERGO Fund, G Squared and CreditEase.

“After closing $385M in our Series B, it’s time to put that capital to work for us to buy cars and propel growth—with this new executive team providing us with important insights and leadership.” Painter said in a statement. “Jay will eliminate execution risk and bring in operational and strategic expertise, Pat is an investor-turned-employee crusader, while John is a world-class financial and accounting expert around whom we can build a sound subscription business and strong auto insurance division.”

Fair acquired in January 2018 the active leasing portfolio of Xchange Leasing, a service Uber first established in 2015 to lease new and nearly new vehicles to drivers who did not come to the service with their own cars.

That acquisition laid the foundation for what has become a big piece of Fair’s business today. Some 45% of Fair’s cars are used by Uber drivers today.

Fair also has aspirations to expand beyond the U.S., Trinidad told TechCrunch in a recent interview. The company hasn’t publicly disclosed which countries it might go to first. Europe and Asia, particularly considering Trinidad’s long background in the region, would be the most likely markets for Fair.

In the next year, the company hopes to move into international markets and grow its workforce, which will likely mean moving into a bigger office, Trinidad said.

“I really think in a year’s time, at least in the markets we’re targeting such as Los Angeles and San Francisco, you’ll start to hear ‘Why not Fair a car instead of buying or leasing one?’ It will be a third option people consider.”

Related posts