EFCC TO PROSECUTE EX-GOV.ODILI OVER N100BN LOOT …N25bn Investment In Arik Air

The Economic and Financial Crimes Commission is believed to be finalizing arrangements to prosecute the immediate past governor of Rivers State, Dr. Peter Odili. To this end, the anti-graft agency has assigned its officials to validate an initial report of the agency put together after an investigative process in 2006.
At the heart of the criminal misconducts thrown up by the EFCC investigative panel in 2006 is how the then governor, Dr. Odili, actively used an associate, Mr. Johnson Arumemi-Ikhide, the man famously known to be the owner of Arik Air, to loot sums estimated to be over N100billion from the treasury of the state.
The EFCC report trails the relationship between ex-Governor Odili and Mr. Arumemi-Ikhide thus:
“Prior to becoming a major contractor to the state government in 2000, Mr. Johnson Arumemi-Ikhide was a shareholder of, and an executive director in, Negris Engineering Nigeria Limited. He worked for the company for over 18 years before leaving the company as a result of misunderstanding with other management staff, to form Rockson Engineering Nigeria Limited in 2000.
“While he was still with Negris, he provided an interface between Negris and Rivers State Government during which two major contracts were secured for the company. The contracts were the supply and installation of generating sets and transformer worth N401,016,101.00. The other contract was for the supply, construction and installation of turbine power station worth N4,256,076,000.00 in 2000.
The report notes that:
“The second contract was about 60 per cent completed when Mr. Johnson Arumemi-Ikhide left Negris and suddenly became the consultant to Rivers State on the same contract using his then newly formed company, Rockson Engineering Company Limited. The remaining payments for the Negris contract were routed through his company where the sum of N734,764,749.00 is yet to be remitted to Negris.”
The report adds that:
“The incorporation of Rockson Engineering Company Limited in 2000 immediately Arumemi-Ikhide left Negris marked the beginning of siphoning huge government fund that ran into several billions of Naira through gas turbine contract scam.”
The report highlights how several billions of Naira were transferred into accounts owned by Mr. Arumemi-Ikhide:
“Rivers State Government diverted the sum of N30,031,446,589.70 at various times to account number CA 6010914407 at Zenith Bank Plc belonging to Rockson Engineering Company Limited between January 07, 2004 and December 06, 2006. Investigations also reveals that Rockson Engineering has several bank accounts with Bank PHB, Sterling Bank Plc, United Bank for Africa, First Bank Plc, Intercontinental Bank Plc and Union Bank Plc. These banks were involved in the inflated contracts between Rockson Engineering and Rivers State Government.”
The EFCC report further notes that its investigations revealed that funds were diverted from Rivers State Government’s account to Rockson Engineering Limited, where it was transferred instalmentally between March 2005 and November 2006 from bank account number 6571020007472 with Union Bank Plc to the following companies.
a. Alpha System and Commodity Company Limited—N3,957,734,700.00
b. Sea Petroleum and Gas Company-N6,623,940,500.00
c. Peg Magreet Shipping and Trading Limited -N638,320,000.00
d. Wopat Nigeria Limited – N276,100,000
e. Dairy and Livestcok Limited – N281,000,000.00
f. Arula Investment Limited – N330,000,000.000
All totaling N12,107,105,000.00.”
The investigative report made more revelations on how Mr. Aruremi-Ikhide, who the report claims has a long lasting relationship with Dr. Odili which dates back to the 1980s, was used as the main front man for Dr. Odili.
“It has also been discovered that a parallel account called Account 2, account number 0130215431600, was opened with UBA Plc in the name of Rockson Engineering. Form 2001, when the account was opened to 2002, the sum of N12,064,988,787.61 was paid into the account from the Rivers State Government. Interestingly, Mr. Arumemi-Ikhide denied knowledge of the existence of this account. So far the sum of N12,059,602,734.20 has been withdrawn from the said account. This is clear evidence of direct looting of the treasury of Rivers State,” the report asserts.

While he was still with Negris, he provided an interface between Negris and Rivers State Government during which two major contracts were secured for the company. The contract were the supply and installation of generating sets and transformer worth N401,016,101.00. The other contract was for the supply, construction and installation of turbine power station worth N4,256,076,000.00 in 2000.

In direct reference to how Arik Air was funded and established, the report explains:
“It has also been established that Arumemi-Ikhide, the business partner of the Rivers State governor, is the owner of ARIK AIR LIMITED. He used money received from the Rivers States Government to acquire all the assets and aircraft of the company estimated to be worth over N25billion.”
Further establishing a direct link between Dr. Odili, Mr. Arumemi-Ikhide and Arik Air, the report submits that:
“The political and business relationship between Dr. Odili and Mr. Arumemi-Ikhide has become more obvious since the former’s declaration to run for the Presidency. Investigations conducted at various hotels, such as Transcorp Hilton, Le Meridien, Sheraton, etc; in Abuja revealed that the Odili Campaign Organization made bookings worth N130million through his campaign management team. The money came directly from the accounts of Arik Air Limited. The origin of the money is linked directly to Mr. Arumemi-Ikhide for Dr. Odili’s campaign.

To be concluded next edition.

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2009 Forbes Profile of Billionaires: Femi Otedola joins Dangote on World’d Richest List

Femi Otedola(l), Aliko Dangote(r)

Femi Otedola(l), Aliko Dangote(r)

Nigeria may have the honour of having two of its citizens listed in the 2009 edition of the annual Forbes list of the world richest. Fortune&Class Weekly can report that Mr. Femi Otedola, Chairman of African Petroleum Plc and Zenon Oil and Gas would join Alhaji Aliko Dangote, the first Nigerian on the list […] Continue reading here.

OFFSHORE FINANCING: NIGERIAN BUSINESSES FUNDED THROUGH US EX-IM BANK

Ex-Im Bank offers a range of financing solutions for Nigerian buyers as part of the US Government programme to expand trade between the United States and sub-Saharan African countries. These programmes offer Nigerian businesses increased access to working capital, while protecting their United States’ suppliers against commercial and political risk, and the ability to offer financing on competitive terms.

Using Ex-Im Bank’s medium-term insurance policy, RZB Finance LLC insured the sale of newspaper printing press equipment worth $2.8 million. This deal allowed Vanguard Media Ltd of Nigeria to purchase the equipment from Webleader International Inc.  Fidelity Bank in Nigeria guaranteed the transaction.

Impex of Doral, Inc. located in Miami, Florida, was able to sell disposable products valued at $100,000 to its customer, Everyday Supermarket Ltd of Nigeria. A multi-buyer, small business insurance policy was approved in April, 2006 by Ex-Im Bank in order to support this transaction.

Via a bank letter of credit policy, Sovereign Bank of Boston, Massachusetts was able to accept a letter of credit from First City Monument Bank Plc of Nigeria on behalf of Balog Technologies, Nigeria for the purchase of computer components and peripherals.  This transaction, approved in April, 2006, supported this sale valued at $250,000 by Max Group Corp. headquartered in Los Angeles, California and ASI Corp of Fremont, California who supplied the equipment.

DWD International Ltd of Houston, Texas through the use of Ex-Im Bank’s multi-buyer, small business insurance product was able to execute a deal with its customer, Intercontinental Bank, Plc of Nigeria.   This transaction, approved in April, 2006, supported the sale of an air conditioning system valued at $250,000.

Through Ex-Im Bank’s letter of credit policy, Sovereign Bank of Boston, Massachusetts was able to accept a letter of credit from Intercontinental Bank of Nigeria.  This allowed the sale of a dredge valued at $593,000, from Baltimore Dredges, located in Baltimore, Maryland to its customer, Dynamic Energy and Marine in Nigeria.  This transaction was approved in May, 2006.

Via an Ex-Im Bank multi-buyer, small business insurance policy, House of Cheatham located in Stone Mountain, Georgia, was able to sell $100,000 of health and beauty aids to CITEX Holdings Ltd of Nigeria.   This transaction was approved in May, 2006.

Ex-Im Bank approved a request from Sovereign Bank, Boston, MA, for a five-year, medium-term guarantee in the amount of $5,000,000 to support the sale of transportation equipment to Sonic Global Resources Ltd, a company located in Nigeria. This shipment of buses will be used to start the first public transportation service in the country’s capital city of Abuja. The primary source of repayment will be Oceanic Bank who has provided a local bank guarantee for this transaction.

Through Ex-Im Bank’s short-term, multi-buyer comprehensive insurance policy, ABRO Industries, Inc. of South Bend, Indiana was able to execute a deal with its customer, Coshcharis Motors Limited of Nigeria.  This transaction, approved in June 2006, supported the sale of new ABRO branded automotive/industrial supply products valued at $10,000,000.

Via an Ex-Im Bank multi-buyer, small business insurance policy, House of Cheatham located in Stone Mountain, Georgia, was able to sell $100,000 of health and beauty aids to Kuddy Cosmetic International of Nigeria. This transaction was approved in July 2006.

Through Ex-Im Bank’s letter of credit policy, Sovereign Bank of Boston, Massachusetts was able to confirm a letter of credit from Intercontinental Bank Plc of Nigeria.   This transaction, approved in May 2006, supported the sale of wheat and other grains valued at $10,000,000 to Intercontinental Bank’s clients, Flour Mills of Nigeria; Honey Wells Flour Mills Ltd and Unikem Industries Ltd by of Wayzata, Minnesota and Wilton, Connecticut, respectively. Cargill and Louis Dreyfus.

Through Ex-Im Bank’s small business multi-buyer insurance policy, Bluefield Associates of Ontario, CA was able to execute a deal with its customer, Diplomat Investment Products of Nigeria.  This transaction, approved in October 2006, will support the sale of cosmetics and toiletries valued at $100,000.

Through Ex-Im Bank’s short-term single sale policy, Robert & Pat Engineering of Newtown, PA was able to execute a deal with its customer, Coastal Equipment Sales Ltd of Nigeria.  This transaction, approved in November 2006, supported the sale of used trucks and heavy construction equipment valued at $45,000.

Through Ex-Im Bank’s letter of credit policy, Sovereign Bank of Boston, Massachusetts was able to confirm a letter of credit from Intercontinental Bank Plc of Nigeria. This transaction, approved in November 2006, supported the sale of a hydraulic crawler crane valued at $275,000 to Onne Port in Nigeria, by Pioneer Equipment Company.

Through Ex-Im Bank’s short-term multi-buyer comprehensive policy, Bondo Corporation of Atlanta, GA was able to execute a deal with its customer, Tagbo Technologies Ltd of Nigeria.  This transaction, approved in November 2006, supported the sale of automotive paint and after market products valued at $200,000.

Under the recently established $300 million Nigerian bank facility, Ex-Im Bank approved a request from M&T Bank, Baltimore, Maryland for a five-year, medium-term guarantee in the amount of $3,954,132 to support the sale of a thermal oil recovery system to Specialty Drilling Fluids Ltd., a company located in Nigeria. The primary source of repayment will be Access Bank Plc. The exporter is Brandt, of Houston, Texas.

Ex-Im Bank approved a request from Diebold Global Finance Corporation, Canton, Ohio for a five-year, medium-term guarantee in the amount of $5,000,000 to support the sale of Automatic Teller Machines to The ATM Consortium Ltd – a consortium of Nigerian banks. Under the recently established $300 million Nigerian bank facility, Diamond Bank Plc guaranteed this transaction.

Ex-Im Bank renewed a $10,000,000 short term single buyer policy for Abro Industries of South Bend, Indiana to sell automotive/industrial supply products to its customer, Coscharis Motors Ltd. of Lagos, Nigeria.  This comprehensive policy is used to support sales to Coscharis for its Nigeria, Ghana and Ivory Coast subsidiaries and was approved in November 2006.

Under the $300 million Nigerian bank facility, established in 2007, Ex-Im Bank approved a request from HSBC Bank of London for a five-year, Medium-Term Comprehensive Guarantee in the amount of $9,337,522 to support the sale of oil drilling equipment to Drillog Petro Dynamics Ltd., a company located in Nigeria. Diamond Bank Plc guaranteed this transaction and would be the primary source of repayment. The U.S. exporter is Halliburton Energy Services of Houston, Texas.

Through Ex-Im Bank’s Multi-buyer Small Business Policy, House Of Cheatham of Stone Mountain, Georgia was able to execute a deal with its customer, Kuddy Cosmetic International of Nigeria This transaction, approved in November 2006, supported the sale of health and beauty aids valued at $150,000.

Through Ex-Im Bank’s Letter of Credit Policy, Citigroup Global Projects of New York, New York was able to establish a $2,500,000 short-term credit limit with Intercontinental Bank Plc of Nigeria. This credit line enabled Citibank to confirm letters of credit issued by Intercontinental Bank, which will go to support the sale of various U.S. goods and services to multiple Nigerian buyers.

In April, 2007 Ex-Im Bank provided short-term insurance policy to Impex of Doral, Inc. of Miami, in support of their sale of disposable products valued at $100,000 to Everyday Supermarket Limited of Lagos, Nigeria.

In April, 2007, Ex-Im Bank approved a request from Sovereign Bank of Boston, MA for a five-year, medium-term comprehensive guarantee in the amount of $1,630,028 to support the sale of two Dragon Series Dredges to H S Petroleum, a company located in Lagos. There were several corporate guarantors on this transaction. The U.S. exporter is Baltimore Dredges, LLC of Baltimore MD.

Xechem Pharmaceutical Nigeria Limited of Abuja, Nigeria received pharmaceutical manufacturing and laboratory equipment from several U.S. suppliers including American Plastics Technologies, Inc. of Shiller Park, IL, Fisher Scientific Company of Suwanee, GA, and the Nitra Group of Aventura, LF. This $9,389,000 loan was supported by a guarantee from the Bank PHB of Lagos, Nigeria, and the loan was provided by UPS Capital Business Credit of Hartford, CT. Ex-Im Bank provided a five-year comprehensive guarantee to the lender.

Through the use of an Ex-Im Bank medium-term loan guarantee, HSBC Bank Plc of New York, was able to provide financing to its client, A. O. IYERE Motors & Co, Ltd of Nigeria. This transaction, approved in June 2007, supported the sale of used Mack trucks and spare parts valued at $1,500,000. Capital Trailer & Equipment Co, Inc, located in Montgomery, Alabama was the supplier. This transaction was supported by a guarantee issued by Union Bank of Nigeria, under the recently established Ex-Im Bank Nigerian banking facility.

Ex-Im Bank approved a request from UPS Capital of Windsor, Connecticut, for a five-year, medium-term guarantee in the amount of $11,000,000 to support the sale of petroleum refining equipment to Amakpe International Refineries Nigeria.  The primary source of repayment will be Sterling Bank of Nigeria.  The U.S. exporter was Ventech Engineers Inc., of Pasadena, Texas.

Ex-Im Bank approved a request from HSBC Bank Plc of New York, New York, for a five-year, medium-term comprehensive guarantee in the amount of $13,117,330 to support the sale of advanced Logging While Drilling (LWD) technology and equipment to Drillog Petro Dynamics Ltd., a company located in Nigeria. Diamond Bank PLC of Nigeria issued a local bank guarantee to support this transaction.  The U.S. exporter was Halliburton Energy Services of Houston, Texas.

Through Ex-Im Bank’s Multi-buyer Small Business policy, Olson Inspection Services Inc of New Orleans, Louisiana executed a deal with its customer, Chevron Nigeria Ltd. This transaction supported the cost of inspection and consulting services valued at $1,000,000.

Via an Ex-Im Bank Multi-buyer Small Business policy, Strength of Nature LLC of Savannah, Georgia was able to sell $20,000 of cosmetics and hair care products to Kuddy Cosmetics International, Ltd in Nigeria.

Through the use of an Ex-Im Bank Medium-term Loan Guarantee, M&T Bank of Buffalo, New York was able to provide financing to its client, Karlflex Fisheries of Nigeria. This transaction supported the sale of three used fishing trawlers valued at $2.6 million, Mr. Vic, Incorporated located in Bayou, Alabama was the supplier. This transaction was supported by a guarantee issued by AfriBank, Nigeria under the Ex-Im Bank Nigerian Banking Facility.

Under the established Nigerian Bank Facility, Ex-Im Bank expedited the approval of a request for a Medium-term Loan Guarantee to First National Bank of Omaha.  The financing from First National Bank of Omaha supported the purchase of 45 used Mack trucks in the amount of $3.4 million by Roadmarks, a company located in Nigeria. Zenith Bank provided a local bank guarantee on this transaction and is the primary source of repayment. The U.S. exporter was Global Truck and Equipment Information of North Miami, Florida.

The Pioneer Equipment Company of Jacksonville, Florida exported $3,030,762 worth of new and refurbished rock crushing equipment to Japaul Oil & Maritime Services, Plc in Nigeria.  Assured through Ex-Im Bank’s Medium-Term Loan Guarantee policy, Sovereign Bank lent the money to Japaul Oil & Maritime Services’ bank, Intercontinental Bank PLC of Nigeria, was the guarantor.

Ex-Im Bank guaranteed a medium-term loan for $321,499 to purchase communication broadcasting equipment.  Electronics Research, Inc of Chandler, Indiana and BSW of Washington, DC exported the equipment to Megalectrics, LTD of Nigeria.  M&T Bank lent the money to Megalectrics with Diamond Bank, PLC of Nigeria as the guarantor.

Ex-Im Bank guaranteed a long-term loan that involved over 16 suppliers.  The $19,634,327 transaction allowed the suppliers to export an aluminum can manufacturing facility to GZ Industries of Nigeria.  Fidelity Bank, Nigeria, provided a local bank guarantee to support HSBC’s loan.

EXPERT DECRIES BANK CHARGES ON RETURNED CHEQUES AS ILLEGAL

Mr. Ori Adeyemo, a forensic accountant and crusader for streamlined bank charges, has decried bank charges on returned cheques and described the fee deducted from accounts in consequence of returned cheques as illegal.

“It is trite that by virtue of Section 10, subsection of the defunct Central Bank of Nigeria (CBN) Bankers’ Tariff, a bank is allowed to charge N1,000 for a returned corporate cheque whilst debiting N300 for a returned individual cheque (to be borne by the drawer),” Adeyemo said.

“It is also true that by the provision of Section 11, subsection 6 of the subsisting CBN Guide To Bank Charges effective January 01, 2004, a returned cheque attracts 0.5 per cent of amount, maximum N5,000 (to be borne by the drawer).

“In both cases,” Adeyemo argued, “the CBN guidelines stipulate that only the drawer of a cheque should be penalised for a returned cheque and not the supposed beneficiary (who never took value for consideration anyway.)  Unfortunately, we all know that this situation is not true in Nigeria as banks whimsically charge both the drawer and drawee for a returned cheque, thereby amounting to double-jeopardy especially for the drawee who never took any benefit.”

 Affirming the contradiction in the statutes relating to fees sanctions as a result of returned chques, Adeyemo said: “I must emphasise that the CBN is wrong to have inserted returned cheque fee into the defunct Bankers’ Tariff as well as the subsisting CBN Guide To Bank Charges being in crass breach of the Dishonoured Cheque (Offences) Act of May 20, 1977, which makes it a nullity for the following reasons:

a.     That a returned cheque is a criminal offence and not a civil offence.

b.    That only the injured party (that is, the supposed beneficiary) has a right to complain about a returned cheque to the Nigeria Police or better still, the Economic & Financial Crimes Commission (EFCC) and definitely not a bank.

c.     Returned Cheque Fee is a penalty which only a court of competent jurisdiction can impose on a citizen of the country. 

d.    No party to a contract can impose any form of penalty/fine on other parties to a contract as doing so is repugnant to natural justice.  

e.     That a bank has no special or pecuniary interest in a returned cheque being just a clearing vehicle for a deposited cheque.

f.     That Section 9 of the subsisting CBN Guide to Bank Charges, clearing of cheque or draft in Nigeria is free.  Moreover, no bank can charge any fee for collecting any deposit in Nigeria.

g.    That according to the Dishonoured Cheque (Offences) Act of May 20, 1977, upon conviction; an individual is liable to two-year jail term without an option of fine while for a body corporate a penalty/fine of not less than N5,000.

h.     Only the Attorney-General of a state (without excluding the Attorney-General of the Federation) has a right of criminal prosecution of a defaulter and definitely not a bank.

i.      That Section 25 of the Interpretation Act (which provides that a person shall not be punished twice when guilty of an offence under more than one enactment) shall apply in respect of offences under this act.

j.      Since this Section 11.6 of the subsisting CBN Guide to Bank Charges as it relates to a bank charging its customer Returned Cheque Fee is in breach of the Dishonoured Cheques (Offences) Act being a legislation of the National Assembly, the Dishonoured Cheques (Offences) Act will prevail.

“In simple language, I am saying that since a bank is not a party to a returned cheque, then such bank cannot lay claim to it.  We should cast our mind to the law of privities of contract wherein it is clearly stated that only parties to a contract can sue for the enforcement of a contract and not even those in whose interest the contract was made,” Adeyemo insisted.

“You will agree with me that the initial beneficiary of a clearing cheque is the bank that went to clear the cheque that should have taken custody value for the drawee but that alone does not give room for the bank to lay any claim on the money since the bank is not the real beneficiary of the fund but just a mere custodian.

“Therefore, I cannot but submit that the present CBN Guide to Bank Charges, is fraught with illegalities to the crass detriment of bank customers thereby allowing banks to smile away at all times, leaving the customers short-changed.  In fact, this was one of the issues I had wanted to address in May 2008 at the House of Representatives’ probe of the banking industry until it was fraudulently compromised by the banking cabal working in concert with the then leadership of the House Committee on Banking & Currency.”

Adeyemo argued that on account of the subsisting convention of fee sanctioning for returned cheques, he had been demanding a review of the CBN Guide to Bank Charges: “I cannot but request for a thorough review of the CBN Guide to Bank Charges wherein the opinion of every stakeholder in the industry will be accommodated as against the present one which was drafted by Mr. Jim Ovia, the Zenith Bank Plc Managing Director and so wholesomely adopted by the CBN without any input from the bank customers, thereby skewing the graph in favour of the banking industry.

“In simple words, I submit that it is totally illegal for any Nigerian bank to penalize a customer for a returned cheque, as doing so will translate to the fact that the banks have become laws unto themselves, having illegitimately taken over the job of the judiciary,” Adeyemo submitted.