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Audit report indicts NPA MD, Hadiza Bala-Usman of N20bn contract fraud

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NPA MD, Hadiza Bala-Usman

These are not the best of times for the Managing Director of the Nigerian Ports Authority, Hadiza Bala-Usman, as an audit report conducted by the Auditor-General’s office has allegedly indicted the her for various questionable transactions.

Part of the recommendations include that the Bala-Usman-led NPA should refund about N5.18 billion to the Federation Account for various unreconciled transactions.

Investigation shows how spending under Hadiza Usman keeps rising even as the NPA flunks its audit.

The fraud which runs into billions of naira was uncovered by an ‘audit query’ of activities of the NPA between 2016 and 2018, Per Second News gathered.

The Auditor General’s Office concluded, however, that the NPA’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.

The office of the Auditor General of the Federation also came hard on the NPA boss for gross “betrayal of public trust” as demonstrated by her flagrant abuse for due process in the way and manner she runs the agency, citing documents obtained by this newspaper.

Highlights of the damning report from the office of the Auditor General of the Federation include her refusal to remit VAT deductions running into billions of naira and in foreign currency denomination to the Federal Inland Revenue Service.

For instance, the query highlighted unremitted deduction to Federal Inland Revenue Service (FIRS) to include N3,667,750,470. $148,845,745.04, Euro 4,891,449.50 and £252,682.14.

The NPA under Hadiza Bala Usman was also accused of” excessive increase in administrative operational expenses” extra budgetary expenditures on hotel accommodation and under disclosure of expenditures on hotel expenses”, Corporate social Responsibility Projects, diversion of funds through the Nigerian Port Today, to the sponsorship of National Assembly Programmes, amongst other.

The queries which covered over 100 issues, also asked Hadiza Bala Usman to make various refunds to government, especially in instances where such expenditures could not be justified.

Investigation also uncovers that the Audit team reviewed NPA’s policy on implementation of Corporate Social Responsibility Projects/ Programmes and discovered that records relating to CSR fell short of the level of compliance with the Public procurement Act 2007.

In 2016, the NPA spent N286,412,628.00 on CSR while in 2017, the figure rose to N2,496,248,775.00 and N5billion in 2018. The Audit team found out that “beneficiary needs were not properly assessed or identified before the implementation of CSR projects/ programmes.

The Audit team observed to its chagrin that there was no evidence of compliance with public procurement Act and that most of the CSR projects/ programmes were inflated and accordingly ordered that the “sum of N5.18 billion should be recovered from the Managing Director of NPA, being the value of, inflated amount under her watch.

The committee also observed that delivery of CSR items were not accompanied with delivery letters and that in most cases, there was no evidence of actual items delivered and who signed for them.

Per Second News gathered that the NPA boss and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the government and drive the NPA’s budgets ever higher, regardless of port necessity.

The NPA has literally been making up numbers in its annual financial reports to the National Assembly—representing billions of dollars’ worth of seemingly nonexistent transactions—knowing that the National Assembly would rely on those misleading reports when deciding how much money to give the Authority.

The fraud works like this, for instance while a contract with Ref. HQ/GM/PROC/CON/C.11/PBT/16/322 dated 16/10/17 was awarded in favour of Messrs Ecomaxx Engineering Projects Ltd for the supply of items to the old people’s Home Yaba, Lagos to the tune of N19,760,460.00 which was paid vide invoice no HQ/CS/0711 dated 01/06/17 there was no documentary evidence that the items were indeed delivered to the Home.

In the same vein, the contract for supply of items to Yaba children’s orphanage followed the same pattern.

For instance, whilst a contract awarded in favour of Trans-secure Ltd was N19,467,000.00 the survey conducted by the audit team found out that N6,520,500.00 was the actual market price. This NPA expenditure fraud is déjà vu all over again for Spinney, prompting the office of the AGuF to demand an explanation from Hadiza Bala Usman reasons for the sharp excessive increase in the Authority’s expenditure profile between 2016 and 2018. “It was observed that total expenditure by the Authority increased astronomically by 128% from N87.47 billion in 2016 to N198.98 billion in 2017. Of particular concern was the administrative expenses which increased by 72% from N26.126 billion in 2016 to N44.93 billion in 2017.

Among the laundering tactics uncovered by the Audit Query revealed that whereas in 2016 N22.16 billion was expended on revenue monitoring, the amount rose to a whopping N1.06 billion in 2017, an increase of over 4,689%. Similarly, overseas training rose from N20.48 million in 2016 to N470 million, an increase of over 2194%.

Also, whereas N15.31 million was spent on vessels / craft in 2016, the amount rose to N117.4 million in 2017, an increase of 666%.

The excessive expenditure of pollution control also attracted the scrutiny of the auditors who insisted that Hadiza Bala Usman must tell Nigerians why and how N4.2 billion was spent in 2017 as against N29 million in 2016, an increase of 14,310 %. Other over bloated increase in expenditure include local and foreign medical expenses, legal fees, Corporate souvenirs and expenditure on other government agencies which rose from N50.29 million in 2016 to N338.59 million in 2017, a 573 per cent rise.

The Audit also raised its yellow flag on an alleged “diversion of N369.71 million through the Nigerian Ports Today” the official in-house magazine of the NPA. “Payments to Nigerian Ports Today were reviewed to confirm whether they were properly initiated, authorised processed, documented and paid in line with the Public procurement Act 2007,”the report said.

However “findings revealed the sum of N369,718,130.82 was paid to Nigerian Ports Today, a Limited liability company that is fully owned and controlled by NPA during the period under review. There was no evidence of contractual relationship in the form of award of contract to the company nor was there anything to show the company rendered services to the Authority to justify these payments and concludes that the Authority paid the company without a contract and thereby contravening the Public procurement Act 2007, and that this was viewed as a means to divert public funds,” the report alleged.

The Audit query also took serious exceptions to various expenditure incurred by the NPA on behalf of the Minister of Transportation, Rotimi Amaechi for which a whopping $604,598.95 was paid without supporting documents .

Hadiza Bala Usman was asked to refund the said sum into government treasury. Usually dependable source at the office of the Audit General of the Federation told Shipping World that the Audit queries cuts across all units and departments of the agency and that massive over invoicing and flagrant disregard for due process were uncovered. In all, at least a mind-boggling N20 billion of NPA’s financial transactions between 2016 and 2018 could not be traced, documented, or explained.

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INVESTIGATION

Publication threats: Billionaire bank debtors​ lobby CBN Gov to save faces​

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  • Our decision meant to avert another banking crisis – DMBs

 

Fresh information reaching The Witness has revealed that some top Nigerian billionaires are currently lobbying the governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele to save their heads following threats by chief executive officers of Deposit Money Banks (DMBs) in Nigeria to share details of chronic debtors and blacklist such.

The Witness reliably gathered from inside sources that since the disclosure of the decision by the bank CEOs, some top moneybags have continued to pressure the apex bank and its head honcho to intervene in the decision of the lender to give them time to clear up their debts.

Aside from this development affecting their businesses, bank debtors are more uncomfortable with the idea of making their names public, especially at a trying time like this. They are deeply afraid that the policy may throw them out of business, especially for those of them who need foreign exchange to operate.

Chronic debtors, analysts say, are those debtors who are unwilling to repay their loans to the banks.

The decision which the DMB’s are ready to implement to the letter, is aimed at forestalling the growing amount of non-performing loans NPLs, in the books of financial institutions to avert another banking crisis in the country.

Recall, CEOs of DMBs across the country recently agreed to share details of chronic debtors and blacklist such.

The bankers made this known after a meeting held to discuss how some debtors have been allegedly using law enforcement agencies to harass and criminalize bank CEOs.

In a statement, the group said the affected debtors are not ready to repay their loans. The group spoke in Lagos after reviewing what it called the “harassment and criminalization of banks’ CEOs by law enforcement agencies.” It noted that chronic bank debtors were now in the habit of enlisting law enforcement agencies including police, judiciary and state security to harass and criminalize bank CEOs, saying this was unacceptable. “Notably, these loan defaulters are known to have abused court processes as well as using social media to propagate their smear campaign against the banks,” the group said.

A communique issued following the meeting noted that these activities by the law enforcement agencies and the bank debt defaulters were capable of adversely affecting the banking system vis-à-vis the CEOs’ reputation amongst international banks, destroy the economy, and called for these to be checked and managed.

In order to tackle what they see as an emerging threat to banking business in Nigeria, the committee outlined a five-step resolution of actions that banks would need to take. The resolutions and planned actions were arrived at after members discussed and considered different options for dealing with the issue.

Specifically, the banks’ CEOs said there was an urgent need for all banks to cooperate and collaborate to identify and ex-communicate chronic debt defaulters, noting that this goes beyond “publishing names of such defaulters in national media (which is inevitable), but involves all banks speaking with ‘one voice’ and sharing information about those entities, and refusing to do further business with them until they settle their obligations.”

To avoid the kind of crisis that rocked the banking sector 10 years ago, the CEOs urged all agencies and stakeholders to step up and help fight the inherent menace of chronic loan defaulters.

According to the CEOs, the banking industry is the backbone of the Nigerian economy, therefore, it is the responsibility of all stakeholders – regulators, police, judiciary, corporate organizations and media to help save it from activities of delinquent debtors.

Besides, the group resolved that all cases of defaults would be presented and passed through the Bankers’ Committee Ethics Committee just as it intends to work with legal councils and come up with ways and strategies to manage related cases effectively without disrupting businesses and the system.

In a recent publication, Access Bank had threatened to publish the names of customers refusing to settle their debts in national dailies.

In a statement, the bank had said it is acting in line with a directive from the Central Bank of Nigeria (CBN).

“All Access Bank Plc (including former Diamond Bank Plc) debtors are directed to pay up their past due obligations in order to avoid punitive actions being taken against them,” the bank said.

The statement added, “Please note that we shall publish our debtors’ names in newspapers in two weeks.

“Similarly, in the event that these obligations are not fulfilled, we shall take such further actions against such delinquent individuals and companies as we may consider necessary and shall relentlessly pursue full recovery of all our debts.”

While experts appear to condemn the act of borrowing and refusing to repay the loans, they are more afraid of the bad implication it could have on the macro economy.

Managing director/CEO at BIC Consultancy Services, Dr. Boniface Chizea, in a chat with newsmen believes that since the CBN has autonomy it can take decisions in the best interest of the economy.

He, however, said the idea was good for the banks, but advised that caution should be applied in order to publish only names of those who actually owe.

”The autonomy of the Central Bank should have instrument autonomy which implies that the Central Bank should have unhindered freedom to decide on how best to achieve its mandate without any dictation from any quarters. If the Bankers’ Committee which the CBN chairs decides to publish the names of debtors, so be it.

“We just hope that in embarking on this name-and-shame approach, due care is exercised so that the names of actual debtors are published.

”We had an experience during the immediate past administration when a deluge of rebuttals and retractions followed an attempt to embark on similar exercise. We must avoid such embarrassments this time around.

“If names are to be published, due care must be exercised to ensure the names of only those culpable are published. It is embarrassing and unfair otherwise considering the potential damage to reputation such a move will occasion. It is not good for the creditors for their names to so published as most of these recalcitrant debtors are the juggernauts in our midst; the movers and shakers; the financiers of electoral campaigns who often think that because of their access to the powers that be they remain beyond the law.

”This is a last resort desperate measure meant to stem the wind of distress overtaking the banks leading to a harvest of bank failures. It is good for the banks generally as it has the effect of sanitizing the banks to restore them to sound health to continue to provide banking services, sustain the going concern and continue to return dividends to their many shareholders and stakeholders,” he concluded.

It would be recalled that the immediate-past CBN governor, now Emir Kano Sanusi Lamido Sanusi, had published names of those indebted to some of the banks that failed the second phase of the apex bank’s stress test in 2009.

Asset Management Company of Nigeria, AMCON had in 2013 called a governorship candidate in one of the South-south states of Nigeria a chronic debtor for his unwillingness to liquidate his debt to some banks.

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INVESTIGATION

Homeowners accuse CMB Building Company, its CEO Mbagwu of fraud, petition EFCC

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The residents of Pearl Garden Estate and Pearl Nuga Park Estate located at Sangotedo in Lekki/Ajah area of Lagos State have petitioned against the CMB Building Maintenance and Investment Company Ltd to the Economic and Financial Crimes Commission (EFCC) over alleged fraudulent mortgage of some of their homes to secure unapproved bank loans.

Meanwhile, the association of homeowners in the estates have barred representatives of CMB, a building and maintenance firm owned by Kelechukwu Mbagwu from maintaining the homes at Pearl Nuga Park Estate and Pearl Garden Estate.

The separate petitions dated May 28, 2019 and addressed to the EFCC Chairman, Mr Ibrahim Magu, were signed by Mr Patrick Olowokere, the President of Pearl Nuga Estate and Reverend Adesola Adebawo, President of Pearl Garden Estate respectively.

According to the petitioners, CMB obtained a mortgage from Wema Bank Plc using the affected homes at Pearl Nuga Estate as collateral without the knowledge or consent of the affected homeowners.

Image: Repossessed property at Pearl Gardens Estate from fraudulently-obtained bank loan

“The affected homeowners, namely; Bridget Eko, Osagie Aimiehnoho Jude, Mr Akinola Alabi, Mrs Oluwadara Alabi, Nosakhare Igbinobi and Amos Gaga, paid CMB for those houses to be built and had taken possession of their houses from CMB at different times.

“CMB and Mr Mbagwu fraudulently withheld the title deeds of the houses from the affected homeowners as it withheld those of several other homeowners within the estate,” they alleged in a petition duly acknowledged and signed by the EFCC, copy of which was obtained by the News Agency of Nigeria (NAN).

However, the bank has begun a recovery of the six houses within the estate following the failure of CMB, the property developer, to repay the loan, according to the petitioners.

Similarly, Pearl Garden Estate also accused CMB of using the homes of four of their members — Mr and Mrs Michael Bassey, Mr Oyeleke Jegede, Mr Larry Amaraibi and one Mr Felix — who had already paid in full to allegedly obtain a N10 million loan from Diamond Bank (now Access Bank).

Meanwhile, the association of homeowners in the estates have barred staff or representatives of CMB from Pearl Nuga Park Estate and Pearl Garden Estate.

The petitioners said, “We have no other choice but to believe that other houses of our members and homeowners within the estates may be the subject of similar fraudulent mortgages.’’

Another resident, Mr A. Akeredolu, said: “Some of us have waited endlessly for the commencement of the ‘fictitious’ Pearl Royale Scheme, Pearl Garden Extension and Pearl Nuga Park.

“We paid for these in full since 2010 but have yet to be shown the location of our purchases, let alone the allocations.

“We know projects fail, but they have yet to make any official statement or promise of refund. These people are so bold and fearless, one wonders who is backing them!”

All efforts by our reporter to reach Mr. Mbagwu for his angle to the allegations proved futile as calls and text messages placed to his mobile line were not responded to as at press time.

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INVESTIGATION

Presidential panel probes Delta Senator, Peter Nwaoboshi over corruption allegations

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Senator Peter Nwaoboshi is in hot soup as the Special Presidential Investigation Panel for the Recovery of Public Property has referred him to the Director of Public Prosecution of the Federal Ministry of Justice, Etsu Umar, for prosecution.

In its letter signed on behalf of the chairman of the panel, Okoi Obono-Obla, by Dr. Celsus Ukpong, urged the DPP to prosecute the senator on charges bordering on his failure to declare his assets before the panel in violation of section 3(i)(a) of the Recovery of Public Property (Special Provisions) Act 2004.

The letter stated that the violation was punishable by the same provision of the Act.

It stated that it had forwarded draft charges to the DPP.

Accompanying the letter dated June 7, 2019, and received by the DPP office on June 10, 2019, were documents contained in the case file forwarded to the Ministry of Justice.

The letter read, “I am directed to you above-named case file for further action.

“The above suspect is under investigation before us for possession of suspicious assets far and beyond his legitimate earnings.

“He has refused to declare his assets before the panel after lawful demand by the special presidential investigation panel.

“This refusal is contrary to and punishable under section 3(i)(a) of the Recovery of Public Property (Special Provisions) Act 2004. It shall be appreciated if a charge is brought against him for his offence pending the conclusion of the investigation.”

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