COVER
Subsidy: Reps Uncover How Oil Companies Defraud Nigeria
By Mathew Dadiya, Abuja
The House of Representatives has uncovered how oil companies in Nigeria export crude oil for refined petroleum products but fail to account for the by-products.
At the resumption of the hearing of the House special adhoc committee on petroleum products subsidy regime in Nigeria from 2017 to 2021, the lawmakers were shocked upon discovery that operating companies don’t account for by-products.
The lawmakers lamented that despite the cost of the by-products which they noted was higher than crude itself, oil companies were shortchanging Nigeria by failing to give account of what becomes of the products.
The head, business development of Hyde Energy, an oil company, Abdulwahab Useni who appeared before the committee stood his ground as he refused to disclose to the lawmakers how the company makes profit from crude export and import of refined products.
Despite pressure from members of the committee, Useni who stood in for the managing director of the company, also refused to explain to the lawmakers what happens to the profit of the crude oil by-products.
This compelled Hon, Isiaka Ibrahim to call for a closed-door investigation when invitees failed to make open, relevant information concerning financial transactions.
The committee members as a way of ascertaining both the export and import value of crude and refined products sought to know from Hyde Energy, the countries it exports its crude to.
According to the lawmakers, this will enable the committee to write to embassies of the countries in question to uncover details of such transactions.
In another development, the Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami, has said state governors have no basis to complain about the $418 million deductions from the Paris Club refund paid to consultants they hired.
The minister said that the complaints arising from the Nigerian Governors Forum (NGF) was not only unjustified but “a clear case of absence of defence.”
He spoke when he featured on the Ministerial Media Briefing organized by the Presidential Communications Team on Thursday at the Presidential Villa, Abuja.
The AGF also disclosed that a total of 648 cases instituted against the president, federal government and its agencies, before states, federal and ECOWAS Court were served on the Ministry, adding diligent defences of these cases in the year 2022 alone has saved the government from huge judgment debt liability to the tune of N54,888,343,888.52.
The Ministry has made appreciable progress in the actions being taken to challenge the $10 billion case between Nigeria and the Process & Industrial Development(P&ID) and was able to convince the court to set aside the case which he said may soon commence.
The AGF noted that the governors created the liability whose payment they have also indemnified.
Fielding question on why despite a presidential directive to suspend the deduction from the Paris Club Refund, he has not deemed it fit to enforce the directive as some deductions were said to have been made, he stated that when the Nigeria Governors Forum (NGF) requested the refund, one of the component was the settlement of the consultants who were engaged by the Forum.
The Minister recalled that when the refund was initially paid to the states, part payment was also made to the consultants.
Malami further disclosed that the governors later decided to stop the payment and asked for an out-of-court settlement.
He said this resulted in a request to the President to make the payment, a request he said, was then passed on to the Office of the AGF for a legal opinion.
The minister noted that after being subjected to necessary checks, it was found that there was no element of fraud involved.
The indemnity of the governors was also sought and received, he disclosed.
“On the issue of Paris Club that is raised. You mentioned that there exists a presidential directive that payments should not be made and then in breach of that position directives payments were perhaps made, may be arising from the conspiracy between the Attorney General of the Federation and Minister of Justice payments have been made.
“I think you need to be informed first, as to the antecedents, prevailing circumstances and how the liability arose but one thing I’m happy to state, which I want to reiterate having stated the same earlier, is the fact that the Office of the Attorney General and the government of President Muhammadu Buhari has not indeed incurred any major judgment debt for seven years it has been on.
“Now, coming to the antecedents background of the Paris Club. The liability or judgement debts related to Paris Club was indeed a liability created by the Governor’s Forum in their own right.”
“The Governor’s Forum comprising of all the governors sat down and commonly agreed on the engagement of a consultant to provide certain services for them relating to the recovery of the Paris Club. So, it was the Governor’s Forum under the federal government in the first place that engaged the consultant.
“Two, when eventually, successes were recorded, associated with Paris Club, the governors collectively and individually presented a request to the federal government for the fund. And among the components of the claim presented for the consideration of the federal government was a component related to the payment of these consultants that are now constituting the subject of contention. So the implication of that is that the governors in their own right recognized the consultant, recognized their claim and presented a such claim to the federal government.
“Three, when the claims were eventually processed and paid to the Governor’s Forum. They indeed on their own, without the intervention of the federal government took steps to make part payments to the consultants, acknowledging their liability over the same.
“And then four, when eventually they made such payments at a point they decided to stop the payment. The consultants instituted an action in court against the Governors Forum. They submitted to consent judgment. They asked and urged the court to allow them to settle out of court.
“The court granted them an opportunity to settle. They committed the terms of settlement in writing, they signed the terms of settlement, agreeing and conceding that such payments be made to the consultant.
“And then five, thereafter, the federal government under the administration of President Muhammadu Buhari was requested to comply with the judgment and effect payment.
“The President passed all the requests of the governors to the Office of the Attorney General for consideration. I suggested to the President the face value of the judgment and the undertones associated with the consultancy services.
“It was my opinion, the same treatment we meted to P&ID, that let us subject this claim, the consent judgment to an investigation by the agencies of the government. Mr President approved, I directed the EFCC and DSS to look into these claims and report back to the office of the Attorney General.
“And these agencies reported and concluded that there is no problem undertone associated with it. The government may continue to sanction the payment dependent. Now, that was the background.
“Even at that, we took further steps after receiving these reports from the EFCC among others, to demand indemnity from the governors. You, as a forum, incurred this liability, as a forum you submitted to consent judgment. We have subjected these claims to investigation and we have a report, but even at that, we need independent indemnity from you, establishing that it is with your consent and understanding that these payments should be made, in writing.
“And I’m happy to report to you that the governors individually and collectively provided the desired indemnity to the Office of the Attorney General, conceding, agreeing and submitting, that the payment should be made.
“Yes, and that was the ground and the basis on which we eventually decided by advising the president that the payment should be made. And then along the line, there was a change of leadership of the Governors Forum. And all the noise-making that is now being generated arising from the Governors Forum is not only unjustified but indeed, a clear case of absence of defence.
“But one other point of interest you may wish to note is the fact that the new leadership of the Governors Forum instituted an action, even when the federal government was indeed acting based on the judgment of the Supreme Court. They now embarked on a fresh legal suit, challenging the payment, challenging the previous agreement, challenging the indemnity and the court dismissed the application. Their case was dismissed by the Federal High Court.
“So that is the foundation and I’m happy to report one, that the judgment and contention was a judgment that was obtained long before the Attorney General, Abubakar Malami came into office, long before the administration of President Muhammadu Buhari came into office.
“It was a product of their own doing and they had it submitted to judicial proceeding, judgment was entered against them. They have committed to the payment of the money, they have on their own indeed effected part payment. I closed my case and I will not like to answer any further questions on that,” the minister explained.
By Mike Odiakose, Abuja
Immediate past governor of Kogi State, Yahaya Bello will spend the 2024 Christmas and 2025 New Year days in Kuje prison, Abuja, following refusal of his bail application by the Federal Capital Territory High Court.
Justice Maryann Anenih yesterday adjourned the case until Jan.
29, Feb. 25, and Feb. 27, 2025 for the continuation of the hearing.The former governor is standing trial, along with two others, in an N110 billion money laundering charge brought against him by the Economic and Financial Crimes Commission (EFCC).
Justice Anenih had refused to grant a bail application filed by Bello, saying it was filed prematurely.
The judge admitted Umar Oricha and Abdulsalam Hudu, to bail in the sum of N 300 million each with two sureties.
Justice Anenih, while delivering a ruling said, having been filed when Bello was neither in custody nor before the court, the instant application was incompetent.
“Consequently, the instant application having been filed prematurely is hereby refused,” she said.
Recalling the arguments before the court on the bail application, the judge had said, “before the court is a motion on notice, dated and filed on Nov. 22.
“The 1st Defendant seeks an order of this honourable court admitting him to bail pending the hearing and determination of the charge.
“That he became aware of the instant charge through the public summons. That he is a two-term governor of Kogi State. That if released on bail, he would not interfere with the witnesses and not jump bail.”
She said the Defendant’s Counsel, JB Daudu, SAN, had told the court that he had submitted sufficient facts to grant the bail.
He urged the court to exercise its discretion judicially and judiciously to grant the bail.
Opposing the bail application, the Prosecution Counsel, Kemi Pinheiro, SAN, argued that the instant application was grossly incompetent, having been filed before arraignment.
He said it ought to be filed after arraignment but the 1st Defendant’s Counsel disagreed, saying there was no authority
“That says that an application can only be filed when it is ripe for hearing.”
Justice Anenih held that the instant application for bail showed that it was filed several days after the 1st defendant was taken into custody.”
Citing the ACJA, the judge said the provision provided that an application for bail could be made when a defendant had been arrested, detained, arraigned or brought before the court.
Bello had filed an application for his bail on November 22 but was taken into custody on November 26 and arraigned on Nov. 27.
From Jude Dangwam, Jos
Conference of Autochthonous Ethnic Nationalities Community Development Association (CONAECDA) has called on the federal government to intensify efforts in the resettlement of displaced persons in their ancestral homes.
The organization made this call at the end of its conference held in Jos, the Plateau State Capital weekend.
Thirty resolutions were passed covering security, economy, politics, governance, culture, languages, human rights and indigenous peoples’ rights among others.
The Conference President, Samuel Achie and Secretary Suleman Sukukum in a communique noted that the conference received and discussed reports from communities based on which resolutions were reached on securing, reconstruction, rehabilitation and returning communities displaced by violence across the Middle Belt.
“After considering the reports from communities displaced by violent conflicts, conference resolved, and called on government to focus on providing security to deter further displacements.
“Call on government to provide security to enable communities to return. Government and donor partners should assist in reconstructing and returning displaced communities,” the communique stated.
The GOC 3 Armoured Division Nigeria Army represented by Lt Col Abdullahi Mohammed said the Nigerian Army is committed to working closely with communities to achieve a crime-free society, urging communities to support them with credible information.
“Security is a collective effort, and we cannot do it alone, the community plays a crucial role in ensuring safety.
“We urge everyone here not to shield or protect individuals involved in criminal activities. Transparency and collaboration, together, with maximum cooperation, we can achieve peace, security, and prosperity for our society,” the GOC stated.
The National Coordinator of CONECDA, Dr. Zuwaghu Bonat in his address at the gathering noted that the theme of this year’s program, Returning, Resettling, and Rehabilitating Displaced Communities, was chosen as a wakeup call on the federal government.
He maintained that the organization is aware that President Bola Tinubu has expressed a commitment to ensuring that displaced communities return to their ancestral lands.
He said similarly, some state governments, including Plateau State, have set up committees to address the lingering matter.
The coordinator however cautioned, “It is critical that we avoid generalizations or profiling. For instance, Not all Muslims are involved in terrorism. The overwhelming majority of Muslims in Nigeria are peaceful and reject extremist ideologies.
“We also know that some terrorists exploit religion to mobilize support or rationalize their actions. However, their atrocities – slaughtering women, cutting open pregnant mothers, and killing children show a profound disregard for humanity and God. Normal human beings would not commit such acts.
“We must also be cautious about lumping banditry with terrorism. While statistics indicate that many bandits and kidnappers may share similar ethnic backgrounds, kidnapping has now evolved into a profit-driven enterprise. This distinction is vital to address the root causes effectively,” he stated.
The Governor of Plateau State, Caleb Mutfwang represented by his Senior Special Assistant (SSA) on Middle Belt Nationalities, Hon Daniel Kwada noted that the conference was apt to addressed the various underlying issues bedeviling the region and its people.
“We in the Middle Belt have long been standing at the crossroads of Nigeria’s complex history. Despite our tireless efforts to stabilize this nation, we have faced immense challenges, including underdevelopment, security issues, and marginalization.
“Often, we are unfairly maligned, but gatherings like this offer a chance to change the narrative.
“Such conferences set the tone for better discussions. They allow us to drive processes that bring development, ensure security, and elevate our people to greater heights,” Mutfwang noted.
Securities and Exchange Commission (SEC) has called on banks to reinforce their corporate governance principles and risk management frameworks to boost investor confidence during the ongoing recapitalisation exercise.
Dr Emomotimi Agama, Director-General, SEC, said this at the yearly workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN) held in Lagos.
The theme of the workshop is: “Recapitalisation: Bridging the Gap between Investors and Issuers in the Nigerian Capital Market”.
Agama, represented by the Divisional Head of Legal and Enforcement at the SEC, Mr John Achile, stated that the 2024–2026 banking sector recapitalisation framework offers clear guidance for issuers while prioritising the protection of investors’ interests
He restated the commission’s commitment towards ensuring transparency and efficiency in the recapitalisation process.
The director-general stated that the key to bridging the gap between issuers and investors remained the harnessing of innovation for inclusive growth.
In view of this, Agama said, “SEC, through the aid of digital platform, is exploring the integration of blockchain technology for secure and transparent transaction processing to redefine trust in the market.”
He added that the oversubscription of most recapitalisation offers in 2024 reflects strong investor confidence.
To sustain this momentum, the director-general said that SEC had intensified efforts to enhance disclosure standards and corporate governance practices.
According to him, expanding financial literacy campaigns and collaborating with fintech companies to provide low-entry investment options will democratise access to the capital market.
He assured stakeholders of the commission’s steadfastness in achieving its mission of creating an enabling environment for seamless and transparent capital formation.
“Our efforts are anchored on providing issuers with clear guidelines and maintaining open lines of communication with all market stakeholders, reducing bureaucratic bottlenecks through digitalisation.
“We also ensure timely review and approval of applications, and enhancing regulatory oversight to protect investors while promoting market integrity,” he added.
Agama listed constraints to the exercise to include: addressing market volatility, systemic risks, limited retail participation as well as combating skepticism among investors who demand greater transparency and accountability.
He said: “We are equally presented with opportunities which include leveraging technology to deepen financial inclusion and enhance market liquidity.
“It also involves developing innovative financial products, such as green bonds and sukuk, to attract diverse investor segments.
“The success of recapitalisation efforts depends on collaboration among regulators, issuers, and investors.”
Speaking on market infrastructure at the panel session, Achile said SEC provides oversight to every operations in the market, ranging from technology innovations to market.
He stated that the commission is committed to transparency and being mindful of the benefits and risks associated with technology adoption.
Achile noted that SEC does due diligence to all the innovative ideas that comes into the market to ensure adequate compliance with the requirements.
On the rising unclaimed dividend figure, Achile blamed the inability of investors to comply with regulatory requirements and information gap.
He noted that SEC had done everything within its powers to ensure that investors receive their dividend at the appropriate time.
He, however, assured that the commission would continue to strengthen its dual role of market regulation and investor protection to boost confidence in the market.
In her welcome address, the Chairman of CAMCAN, Mrs Chinyere Joel-Nwokeoma, said banks’ recapitalisation is not just a regulatory requirement, but an opportunity to rebuild trust, strengthen the capital market, and drive sustainable growth.
Joel-Nwokeoma stated that the recent recapitalisation in the banking sector had brought to the fore the need for a more robust and inclusive capital market.
She added that as banks seek to strengthen their balance sheets and improve their capital adequacy ratios, it is imperative to create an environment that fosters trust, transparency, and cooperation between investors and issuers.
The chairman called for collaboration to bridge the gap between investors and issuers to create a more inclusive and vibrant Nigerian capital market.She said: “we must work together to strengthen corporate governance and risk management practices in banks, enhance disclosure and transparency requirements for issuers.” NAN
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