Trustees urged to ensure justification for borrowed funds

Trustees to fund raising of states and corporate organization have been urged to ensure that usage of such funds are justified according to the fund raising brochure, to eliminate all forms of fraud in raising debt instruments.

They called on the enabling bodies to beam searchlight on borrowers from the debt market to ensure that funds raised by states or corporate set ups are effectively deployed, and should be major consideration for subsequent fund raising.

The founder of Independent Shareholders Association (ISAN) Sir Sunny Nwosu made the call in an interview with Daily Times Nigeria, saying that Trustees should live up to their expectations and protect funds raises by states by ensuring that they are deployed to target areas.

He said that some states known to have huge internally generated revenue (IGR), still resort to borrowing from the debt market, irrespective of the prevalence of internally generated funds.

The issue shows that we’ are too selfish in this country and for states to continue floating bond is not the issue, but they use it to create jobs for the boy.

He alluded that by the time states raise funds from the debt market, it ends there and no one will hold either the state or the trustees accountable for the funds. He carpeted the trustees wriggling out of their responsibility of ensuring that funds sourced from the market are effectively utilized.

Nwosu said that the essence of trusteeship is to ensure that funds that they are tied to, is effectively utilized.

According to Nwosu, it is not out of place for states to raise funds through bonds, but they should be made to justify the usage of the past funds they raised.

He said that some states deploy the debt instrument market to source for cheap funds that could be easily misapplied and at the end, the same state will return to the debt market to float another bond when the utilization of the funds earlier raised has not been accounted for.