NAFDAC Fine: Guinness Queries Basis For Computation Of Amount | Independent Newspapers Limited
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NAFDAC Fine: Guinness Queries Basis For Computation Of Amount

Posted: Nov 13, 2015 at 1:36 pm   /   by   /   comments (0)

*Says Fine ‘Illegal,’ But Discussion Ongoing

The management of Guinness Nigeria Plc, on Thursday informed the Nigerian Stock Exchange (NSE) a N1 billion “administrative charge” by the National Agency for Food and Drug Administration and Control (NAFDAC) “for certain alleged regulatory infraction.
In a letter dated November 12, 2015, addressed the NSE’s head of Listings Regulation, Mrs. Josephine Igbinosun, made available to stockbrokers, the company said “the purported infractions relate, in part, to the destruction of expired raw materials and re-validation of expired raw materials by the manufacturers of the materials without authorisation and supervision of NAFDAC… rather than any of our brands.”
Guinness noted that although it has been discussing with the agency over the past one week, it does “not understand the basis for the computation of the administrative charges, nor the particular regulations alleged to have been infringed.”
The company in its letter titled: Re: Demand for payment of administrative charges by National Agency for Food and Drug Administration and Control (NAFDAC), said contrary to expectation, discussions with the agency’s officials neither clarified the issues at stake nor help in its resolution.
While assuring that it had operated in accordance with all relevant laws and regulations in the country for over 65 years and the global policies of Diageo, its parent company, Guinness said it has “been advised that there is no legal basis for the demand by NAFDAC for the payment of the said sum and we hope that our engagement with NAFDAC will enlighten the organisation about the correct position.”
In the letter signed by Sesan Sobowale, its company secretary, Guinness however reaffirmed commitment to working responsibly with NAFDAC and other regulatory authorities to produce and market quality products enjoyed nationwide. It assured shareholders and the investing public that the board and management are actively involved in the amicable resolution of the issue soon.
Guinness Nigeria therefore becomes the fourth multinational agency slammed by regulatory agencies since October for untoward corporate behaviour.
The first was the Africa’s largest telecommunications giant MTN, whose Nigerian arm was fined N1.004 trillion (about $5.2 billion) at N200,000 each by the Nigerian Communications Commission (NCC) for failing to deactivate from its network, 5.1 million subscribers using unregistered SIM cards.
NCC had explained that all telecom firms in the country except MTN complied with the directive first issued in August, following concerns that the unregistered SIM cards were being used criminal activities at a time when the nation is seriously challenged by menaces such as terrorist attacks and kidnapping.
Following the failure to convince the Federal Government on the need to waive or reduce the fine, its Johannesburg based Group Chief Executive, Sofiso Dabengwa, on Monday resigned his appointment, amid calls by the largest shareholder, South Africa’s Public Investment Corporation (PIC), calling for more heads to roll, by taking “collective responsibility for the fine imposed on MTN Nigeria.”
Others are First Bank, United Bank for Africa and Skye Bank for failing to disclose and move to the Central Bank of Nigeria (CBN) funds belonging to Federal Government Ministries, Departments and Agencies (MDAs) in line with directives. While UBA and First Bank were fined N5.2 billion, Skye Bank paid N4 billion for withholding funds belonging to the Nigerian National Petroleum Corporation (NNPC) mainly.
Stanbic IBTC Holding Company is also currently engaged in a running battle with the Financial Reporting Council of Nigeria (FRC) over corporate governance issues, leading to the suspension of Atedo Peterside, its chairman and Sola David-Borha, the managing director, as well as top officials of its external audit firm- KPMG. While the Securities & Exchange Commission (SEC) had some months ago suspended a public offering by the group, the CBN, the primary regulator of the group’s honey pot- Stanbic IBTC Bank argued that FRC went beyond its brief and that the said infractions were not material enough to warrant the sanctions.
Both the group and KPMG has since secured court injunctions against FRC over the issue.