Trustees create comfort for all parties in business transaction
Funmi Ekundayo, the Managing Director/Chief Executive Officer of STL Trustees Limited (STL) is also the immediate past President of the Association of Corporate Trustees of Nigeria. In this interview with EDU ABADE, she provides valuable insight on the critical roles that trustees play in business transactions. Excerpts:
What significant contribution does trusteeship industry add to national development?
Trustees play critical roles in business transactions. What every investor requires is peace of mind. Anyone that is parting with value – whether you are a bank that wants to lend to a corporate entity for any reason whatsoever – wants to be sure that the money will be repaid with interest and as agreed. So, I would say that we are the gate watchers. We protect investors. We create comfort to all parties on a commercial transaction.
Most credit transactions with banks are not complete without a trustee because the trustee provides the requisite comfort to both the bank, which is lending the money and the borrower that the terms of their agreement will be fully complied with. And who monitors the terms? It is the trustee. So with that, a financial provider in a transaction feels secured with the fact that a trustee will monitor all the obligations and ensure that all the terms of the obligations are complied with from the beginning to the end of the transaction and everybody is happy. So it is a win-win situation.
What roles do trustees play in modern wealth and asset management?
Trustees help people to plan the future of their generations because when you have a trust in place you will be able to easily and seamlessly transfer wealth from one generation to another. And then the issue of having family friction, bickering here and there is significantly reduced. You can even create a living trust for yourself, which begins to run even while you are around and you look at it to run. Our society is replete with stories of families fighting over properties. That is why people shouldn’t allow their estates to go through such mess.
As the immediate past president of the Association of Corporate Trustees (ACT), what are the challenges facing the industry?
One of the challenges facing the industry is that of awareness. The Association of Corporate Trustees of Nigeria is, however, working hard to ensure that a layman on the street understands what the concept of trusteeship is all about and how it can be beneficial to them. Also, in the area of regulations, we would want to see a complete overhaul of the key laws that guide the practices of trusteeship business in Nigeria, basically the Trustees Act and the Trustees Investment Act. These laws are more than 50 years old and some of them still rely on the practices of common law and we think it’s about time that the National Assembly came up with some needful amendments to these statutes. The ACT will be happy to engage the Legislature in this regard and contribute our quota to the proposed amendments.
What are the factors that make STL Trustees stand out from others in the market place?
At STL Trustees our core values are integrity, professionalism, commitment and innovation. These values are encapsulated in our vision, which is “to be the Trust Company most recognized for its competence, reach and client focus”. Our values ensure that in dealing with clients, whether individual or corporate, we strive to always deliver trust solutions that are guaranteed to meet the needs of our clients on a continuously satisfactory basis. Essentially, our ability to anticipate and meet the needs of our clients while at the same surpassing our client’s expectations is what stands us out from the rest.
What special class of products and services do your firm offer?
We play a significant role in bond trusteeship and bond trusteeship is not limited to only the state government, we also have situations where federal government back up certain bond issuances and we act as a trustee. Corporate entities also come to the capital market to raise corporate bonds and all of these are areas in which our roles as trustees are critical, to ensure transparency, credibility and to give comfort to the investors and pay their money; both the principal and the interest as at when due. We also act as trustee to debentures. Also, STL Trustee is an active player in the real estate trustee sphere. We were trustees to Maryland Mall right from its inception and quite a number of other real estate projects.
What typically happens in real estate transactions is that you have a trustee holding the title documents to the assets and they monitor milestones from stage to stage to ensure that agreed milestones are complied with and if there a need arises for any variation, to ensure that everybody are on the same page. Also in unit trust scheme-mutual fund transactions, we play a very significant role. When the Securities and Exchange Commission (SEC) approve funds, you need a trustee to monitor the activities of the fund manager. We monitor them in terms of investments that are permitted under that particular offer and to ensure that they render the regulatory report that they ought to. Generally, we need to monitor them to ensure that everything runs smoothly because investor’s funds are involved. The SEC is trying to encourage retail investors. I can now go and subscribe to a mutual fund.