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INVESTIGATION: AGF Malami may file “criminal charges” against Standard Chartered, Stanbic IBTC and Citi Bank over MTN’s $14 billion transfers



Reports of a secret federal probe may have become matters of serious concern as the Attorney General of the Federation includes criminal charges in its options against three commercial banks and erring CBN officials

Revelations from a trove of forensic documents leaked to UK-based Finance Uncovered may have become matters of serious concern in three commercial banks in Nigeria whose involvements in MTN’s contentious transfer of $14 billion to offshore countries including Mauritius and British Virgin Islands were exposed by a federal audit report.

The three banks could expect to receive “criminal charges that the Office of the Honourable Attorney General and Minister of Justice may prefer against CBN officers, the banks, their officials and customers (MTN) indicted in the investigation”, according to the report of a federal audit that looked into 15-year-transactions of MTN bankers in Nigeria.

A source within the Attorney General of the Federation (AGF)’s office told SATELLITE TIMES that the option of criminal charges “is very much on the table”.

The trio of Standard Chartered Bank, Citi Bank and Stanbic IBTC are subjects of a confidential federal audit initiated by the office of the Attorney General and Minister of Justice to analyse how the banks issued Certificate of Capital Importation (CCIs) to the telecoms giant MTN from 2001 to 2005 and how the three banks used and (or) caused these CCIs to be used for remittances of foreign exchange to MTN offshore corporate shareholders from 2006 to 2015.

Overall, the probe indicated that the vast majority of the CCIs the commercial banks obtained for MTN were in some way irregular.

A lead investigation published three weeks ago by SATELLITE TIMES revealed that MTN was under official scrutiny over the $14 billion serially moved out of Nigeria using processes described by authorities as illegal and irregular.

About two weeks ago in the UK, Standard Chartered Bank reported to its shareholders that “the Group is facing regulatory investigations and proceedings in various jurisdictions related to foreign exchange trading”.

Standard Chartered did not respond to a request to clarify in which jurisdictions it faced scrutiny.

The secret federal audit reports that MTN imported $834.4m less capital than was declared, and repatriated as much as $3bn more than was declared in contentious transactions that forced the Attorney General of the Federation to request the Department of Security Services (DSS) to step in.

Findings against Standard Chartered Bank

Standard Chartered Bank logo [Photo Credit: Per Second News]

The audit report obtained by Finance Uncovered cites two capital inflows at the very beginning of MTN’s investments into Nigeria in 2001. The report states that:

“Standard Chartered Bank Limited (“SCBL”) received the sum of $269,000,000 (USD) as capital importation by MTN on 6 February 2001 from Mobile Telephone Networks International Limited, South Africa. Out of the sum of $269,000,000 ($269 million), SCBL issued CCI No. 002616 on 27 March 2001 to MTN for the sum of $264,906,275.89 ($264.9 million) as capital importation by MTN for the purpose of GSM license fee.”

“SCBL did not and has yet to explain the difference between the original inflow and the sum recorded on the CCI [an amount of $4.1million]”

A year after, the irregularity was repeated when Standard Chartered Bank, “SCBL received the sum of $25,407,130.00 ($25.4 million) as capital importation by MTN on 4 March 2002 from Mobile Telephone Networks International Limited, South Africa … Out of the sum of $25,407,130.00, SCBL issued CCI No. 002661 for the sum of $800,000.00 (USD) on 10 April 2002 as capital importation by MTN for the purpose of working capital and CCI No. 002664 on 22 April 2002 for the $21,500,000.00 as capital importation by MTN for the purpose of shareholders loan.

“SCBL did not and has yet to explain an outstanding balance of $3,107,130.00 ($3.1 million) from the original inflow and the sums recorded on the two CCls.”

Perhaps more startling for the investigators was that there were no evidence of capital inflows. For instance, the auditors were unable to obtain “verifiable evidence” from Standard Chartered that MTN had in fact imported a total $73.1million of foreign capital inflows for which it had been issued with CCIs.

To fund their investments in Nigeria, foreign companies are free, subject to money laundering restrictions, to bring in any recognised foreign currency into Nigeria using an authorised dealer, usually a bank authorised by the CBN. The bank through which the funds were imported will need to issue a certificate of capital importation “CCI”to the investor to evidence the inflow of such funds into Nigeria. Where capital is not imported in form of funds but is imported in form of equipment, machinery or raw materials, a CCI will also be required. In the absence of a CCI, foreign exchange cannot be purchased from the official exchange market for an easy repatriation of the proceeds of the foreign company’s investment from Nigeria.

The laws governing CCI

According to the forensic analysis we obtained, the commercial banks breached sections of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the Central Bank’s Foreign Exchange Manual.

The key is S15 of the Foreign Exchange Act, which states that any person or entity can invest in Nigeria “with foreign currency or capital imported into [the country] through an Authorised Dealer” [i.e. a licenced bank, authorised to deal in foreign exchange]; the investment is converted into naira in the market.

It goes on: “The Authorised Dealer through which the foreign currency or capital for the investment … shall, within 24 hours of the importation, issue a Certificate of Capital Importation to the investor and shall, within 48 hours thereafter, make returns to the Central Bank giving such information as the Central Bank may, from time to time, require.” [S15.2]

Provided this requirement is met, the foreign investor is “guaranteed unconditional transferability of funds, through an Authorised Dealer in freely convertible currency” when they subsequently need to: pay dividends or profits from the investment; service foreign loans obtained for the investment; and/or pay proceeds from the sale or liquidation of the investment. [S15.4]

As with capital importation, the bank has 14 days to notify the Central Bank about capital repatriation. [S15.5.a-c.].

A whistleblower who drew the Attorney General’s attention to the CCI transactions alleged that some of the MTN paperwork was filed more than five years late.

The Act explicitly states that its purpose is to “determine and monitor the flow of foreign currencies into Nigeria” and sets a threshold of $10,000 above which banks must declare any cash transfer “to or from a foreign country” to the Central Bank [S25].

It is a criminal offence for banks to “fail, neglect, or refuse to submit these returns” [S16.3]; and to “forge or produce as genuine to the Central Bank … any false document with a view to utilising the document in any transaction” [S29.1.d]

Breaches detected

The forensics further showed that Standard Chartered Bank committed more “breaches” when it issued and or reissued a total of 110 CCIs to MTN from 2001 to 2015. Out of these 110 CCIs, 79 CCIs “breached the above statutory provisions and were thus irregularly issued.”

The report goes on to say that  “SCBNL used and (or) caused to be used 57 out of the 79 CCIs irregularly issued to MTN to remit a total of $10,889,534,833 ($10.8 billion) to MTN’s offshore corporate shareholders.”

The investigators alleged that Standard Chartered made “false” representations to the Central Bank of Nigeria (CBN) when it applied for permission to convert CCIs issued for shareholder loans into equity, so that MTN shareholders could begin repatriating their dividends. The audit alleges that the bank had already been using these CCIs to remit dividends to MTN shareholders for almost a year before it obtained approval. About $1.5 billion was allegedly flowed out of Nigeria using this method alone.

The audit report says: “SCBNL conduct is contravention 6 contained in the Foreign Exchange Manual, namely that the foreign exchange in the sum of $10,889,534,833 (USD) sold to and (or) sourced from the market by SCBL, Stanbic and Diamond Bank Plc and remitted to MTN’s offshore corporate shareholders was used for non-eligible purposes.”

A non-eligible purpose as set out in Contravention 6 of the Foreign Exchange Manual is one in which the bank and/or its customer has failed to follow the law & regulations for buying forex in the Nigerian market prior to its repatriation.

The report recommends that the CBN “order[s] SCBNL to refund and return the said sum of $10,889, 534, 833.00 ($10.8 billion) to the Central Bank”.

Standard Chartered has come under scrutiny in Nigeria before. In an unrelated case in 2016, the Central Bank reportedly ordered it to return N1.7 billion in “excess profit” it had creamed off a $48.6 million forex exchange deal for an un-named “foreign customer”.

Findings against Stanbic IBTC

Stanbic-IBTC [Photo: BusinessDay]

 Some of the alleged breaches cited by the audit report against Stanbic IBTC are that Stanbic issued a total of 225 CCIs to MTN but allegedly reported only 13 of these to the Central Bank. The aggregate amount of capital imported with these allegedly undeclared CCIs totals $947million.

The report says that “SIL (Stanbic IBTC) under-reported the total number of CCls issued to MTN. SIL reported 13 CCIs valued at $52,887,494 ($52.8 million). Documents obtained from SIL in the course of the investigation directed by the Office of the Honourable Attorney General of the Federation and Minister of Justice show that SIL issued a total of 225 CCls for various amounts totalling $999,560,000 (about a billion USD).”

Investigators also found that“SIL issued 35 CCls out of the 225 CCls to local MTN shareholders who remitted share purchase money in United States dollars sourced from Nigeria to SIL’s Deutsche Bank account in New York. A CCI is issued for capital imported into Nigeria and not for capital sourced and exported from Nigeria. Accordingly, the 35 CCls breached Section 15 of the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and

Memoranda 20 (5) (vi) (d) and 22 of the Foreign Exchange Manual.”

Further “breaches” include the findings that “SIL only sought 9 CBN approvals for a total of 185 CCls issued to MTN for importation of equipment and machines because all the 185 CCls were not issued within the 24 hours stipulated under Section 15 and Memorandum 22 above. Accordingly, the 9 approvals were granted in error and SIL irregularly issued the 185 CCls.”

The forensics also show that “SIL issued 5 CCls to MTN for equity inflows. The issuance of these CCls did not also comply with Section 15 and Memorandum 22 for similar reason stated in the preceding paragraph. Accordingly, SIL irregularly issued the 5 CCls to MTN.”

The audit report concludes that “SIL’s foregoing conducts implicate submission of false returns and production of false CCls with a view to utilising these CCls to remit foreign exchange to individuals and corporate entities outside Nigeria.”

Stanbic IBTC “used 16 irregular CCls to remit the sum of $936, 017,236.89 to eight MTN offshore corporate shareholders.

Findings against Citi Bank

Citi Bank [Photo Credit: BusinessDay]

On the part of Citi Bank Nigeria Limited (CNL), the report states thus:

“On 6 February 2008, CNL transferred seven (7) CCls (Nos. 010357, 010358, 010081, 010079, 010218, 010203, and 010219) which it had issued to MTN shareholders, to SCBNL.

On the same date, Diamond Bank Plc transferred three (3) CCls (Nos. 0205156, 0205154 and 0205155) which it had issued to MTN shareholders, to SCBNL. SCBNL cancelled and combined the ten (10) CCls with 29 CCls it had issued to MTN shareholders to realise a total of 39 CCls. SCBNL replaced the 39 CCls with 20 new CCls. However, 24 out of the SCBNL’s 29 CCls had been irregularly issued to nine (9) MTN shareholders which received 18 out of the 20 new CCls. The 18 CCls are therefore deemed to have been issued irregularly.”

The report goes further to say that “In 17 transactions between 3 September 2009 and 26 May 2015, CNL repeatedly used three (3) of the 7 CCls (Nos. 010358, 010081, 010079) which CNL bank had hitherto transferred to and cancelled by SCBL on 6 February 2008 and the replacement irregular CCls No. 016171 (CM. No. 080025) to remit a total of $1,766, 263, 212. 75 ($1.7 billion) to MTN International Mauritius Limited.”

The forensics also show that “In nine (9) transactions between 5 December 2007 and 2 October 2008, CNL repeatedly used nine (9) of the above mentioned 18 irregularly issued CCls (Nos. 016154, 016156, 016170, 016140. 016159, 016157, 016163, 016141 and 016171) to sell and transfer a total of $535,000,000.00 (USD) to SCBNL for purported remittance to MTN offshore corporate shareholders.”

It concludes that “CNL’s conduct is contravention 6 contained in the Foreign Exchange Manual, namely that the foreign exchange in the total sum of $2,301,263,212.75 ($2.3 billion) sold to and (or) sourced from the money market by CNL for purposes of remittances to MTN’s offshore corporate shareholders, was used for non-eligible purposes.”

Like Standard Chartered before it, the audit report orders Citi Bank to refund and return the sum of $2,301,263,212.75 ($2.3 billion) to the Central Bank of Nigeria.

Detailed questions were sent to each of the three banks by Finance Uncovered and SATELLITE TIMES. Standard Chartered and Citibank Nigeria declined to comment citing the ongoing nature of the investigation. A spokesperson for Stanbic IBTC said it had received no “formal communication” from the Nigerian government about the investigation and therefore could not comment.

Questions MTN refused to answer

Though MTN sent in a written response to Finance Uncovered and SATELLITE TIMES, the telecom giant refused to answer questions including those on the alleged breaches by commercial banks acting on its behalf.

In response to questions sent to MTN by Finance Uncovered and Satellite Times, MTN Group sent a written response saying:

“We are not in a position to comment on it. We have not been approached by the AG or his surrogates and are therefore unaware of any investigation with respect to the said report. We would also like to draw your attention to our SENS announcement dated 28 September 2016 where MTN Nigeria refuted allegations of any improper repatriation of funds. MTN has not at any material time participated in any improper repatriation of funds from any jurisdiction.

MTN has the greatest respect for the countries within which it operates and remains unflinchingly committed to conducting its business within the parameters of all pertinent local and international laws.”

Among the questions MTN did not answer was when it became aware of the scale of the alleged non-compliance by its commercial banks in Nigeria when issuing it with CCIs. It also refused to say if it ever queried the tardiness of its bankers in a bid to address the CCI problem before it became widespread.

MTN also would not say if it was unaware that Stanbic IBTC issued 35 CCls to local MTN shareholders who remitted share purchase money in United States dollars sourced from Nigerian domiciliary accounts, an action seen by analysts as an illegal depletion of Nigerian foreign exchange reserves.

A source close to the AGF’s office told Finance Uncovered that “misleading CCIs can be used to unlawfully repatriate foreign exchange, which can deplete Nigeria’s foreign reserve and cause sudden and debilitating shocks in the country’s foreign exchange mechanism.”

This investigation was made possible with technical support from Finance Uncovered.




EXCLUSIVE: 10 mystery containers shipped into Nigeria by CMA CGM Delmas

– Police suspect arms and ammunition.

– cargoes cleared without physical examination.

– Warrant of Arrest on CMA CMG Shipping Manager.



CMA CGM Centaurus
CMA CGM Centaurus used to illustrate the story - 'EXCLUSIVE: 10 mystery containers shipped into Nigeria by CMA CGM Delmas'

The true contents of 10 containers shipped into Nigeria under mysterious circumstances are now subjects of diverse speculations among port workers in Lagos just as a powerful syndicate believed to be behind the shipment has been deploying its influence within the Nigerian Police Force, the Nigeria Customs Service, Ports Terminal Operators and elsewhere to hush the matter. The contents of these containers remain uncertain especially as they were cleared from the port without any physical examinations, using apparently falsified shipping documents to pass through the clearing process.

Documents obtained by SATELLITE TIMES show that the ten containers were shipped into the country by a shipping company called CMA CMG Delmas Nigeria Shipping Ltd with office at 26 Creek Road, Apapa, Lagos. The consignments arrived TinCan Island Port Lagos from Jakarta, Indonesia on board a vessel named Maersk Conakry/CMA-CGM with voyage number 8W100E. The consignee was given as J.I. Ejison International Ltd with address as 109 Upper New Market Road, Onitsha, Anambra State.

Findings by this newspaper show that the 10 containers (5 x 20-Foot containers with Sea Way Bill No. ID20271634 and another 5 x 20-Foot containers with Sea Way Bill No. ID20271677) were manifested as cartons of soap with J.I. Ejison International Ltd as the consignee. At the time of the import, soap was a prominent item on the Import Prohibition List of the Federal Republic of Nigeria.

Particulars of the 10 mystery containers

The10 mystery containers have the following as their container numbers and seal numbers:

CAXU3378488 D6701293 12500KG

IPXU3358657  D6701484  12500KG

TRLU3957001  D6701386  12500KG

ECMU1295120 D6701340 12500KG

GESU1373150  D6701381  12500KG

ECMU1348472 D668863812500KG

CNCU1529716 D6688637 12500KG

ECMU1542317 D6688581 12500KG

XINU1528288 D6688590 12500KG

FC1U3450531 D6688503 12500KG

On arrival of the 10 containers at the port of destination in Nigeria, the original Manifest and Bills of Lading showing the cargoes as prohibited goods were tampered with and new ones generated in their place. Following these, key shipping documents were altered just as the name of the consignee was changed from J.I. Ejison International Ltd to Fadobra Ventures Ltd with address as 44 Abiola Oluwa Street, Lagos. The description of goods was changed from “cartons of soap” to “Manicure and Pedicure sets”.

Ports insiders told SATELLITE TIMES that these changes, described as “grave” and accommodated by CMA CMG were not consistent with best practices, particularly the Port Standard Operating Procedure (SOP) given that the e-Form M and e-Manifest had already been lodged and once so done cannot be reversed.

Explaining the malpractices, the port insider said: “It is like Ekene Dilichukwu Motors receiving 10 cartons of milk from Company A to be transported from Lagos to Port Harcourt. But after the goods had arrived destination, the waybill is changed to read 10 cartons of nails while the name of the owner is changed from Company Ato Company Z”.

SATELLITE TIMES was able to obtain a copy of the Form M, one of the most important documents used in shipping transactions. The Form M No. 20140069224 used in this controversial transaction was altered in favour of Fadobra Ventures Ltd instead of J.I Ejison International Limited – the original beneficiary.

Form M

Not a few maritime operators told this newspaper that the Form M could only have been forged given that at the inception of any importation, the importer/consignee, in this case J.I Ejison International Limited, must first apply for and obtain Form M only after meeting specified requirements including providing the company’s tax record as contained in its unique Tax Identification Number (TIN). Form M are issued by banks to an import company only after the said company had presented itself to mandatory scrutiny, including stringent Forex guidelines and money laundering prevention measures. As a result, a Form M obtained by one company cannot be transferred to another company just as a Form M obtained by a company for the importation of a specified item cannot be utilised even by the same company to import a different type of item.

SATELLITE TIMES investigations revealed that virtually every document associated with the 10 mystery containers is riddled with discrepancies. The shipping company CMA CMG claims that in swapping both the consignees and the contents of the containers, it acted on instruction from the shipper (Messers. Sea Air & Land Forwarding Ltd)leading to an amendment dated 27th April 2015.  Curiously, other documents show that the amendments to the consignee’s name and contents were carried out by CMA CMG on 18th March 2015. This was 40 days before the purported instructions from the shipper.

Yet another glaring anomaly in the documentation is that while the amended bill of lading describes the 10 containers as containing manicure and pedicure sets, the cargo was eventually released by the shipping company CMA CMG, as the prohibited item, soap. This is clearly captured in CMA CMG’s delivery order issued on 8th May 2015, a copy of which was obtained by this newspaper. This development led dock workers tracking the mystery cargoes to second-guessing the true contents of the 10 containers which they said might neither be soap nor manicure and pedicure sets as alleged.

Botched physical examination

Prince Jide Olowu, a Customs agent familiar with the Nigeria’s current Clearing & Forwarding regime, told SATELLITE TIMES that irrespective of the claims by any importer, the only way to ascertain the true contents of a container is by subjecting it to physical examination.

“I must say that because of corruption, the Customs is very selective when it comes to physical examination, but at least, that was how recent imports containing Tramadol were detected”, Olowu said.

Though the shipping company, CMA CMG’s claims the 10 mystery containers were subjected to 100% physical examination by Customs officials before they were released to the importers, documents available to SATELLITE TIMES show that no physical examinations was carried out.

The 10 containers were supposedly transferred on Saturday 9th May 2015 to Don Climax Bonded Terminal for 100% examination by the Customs and other statutory agencies of government. Shipping documents however show that the 10 containers were released by Customs, CMA CGM Nigeria Shipping Ltd and security agencies earlier days earlier – on/or before 8th May 2015.

Prince Olowu assured it is never a normal practice for cargoes to be released to the consignee (the last stage in the clearing process) before the same cargois transferred to a Bonded Terminal (in this case Don Climax) for 100% physical examination.

Additional evidence showing the 10 containers were never subjected to physical examination before they were released to Fondora Ventures Ltd can be found in documents from the official records of Tin Can Island Container Terminal (TICT). Whilst CMA CGM claim the 10 containers were transferred on 9th May 2015 to Don Climax Bonded Terminal for 100% examination by Customs and other statutory agencies of government, the containers were still in the custody of TICT as evidenced by receipts of rent payment on the 10 containers to TICT. Receipts show the 10 containers were still attracting rent at TICT even on 9th May 2015 when they were supposedly already transferred to Don Climax Bonded Terminal.

Payment receipt

As tongues began wagging over the 10 mystery containers, the attention of the Zone 2 Monitoring Unit of the Nigeria Police was soon attracted. Statements made by TICT Terminal Manager and other workers to Police investigators at Force Headquarters Alagbon on March 2018 show that the 10 containers were still at TICT at the time they were said to have been transferred to Don Climax Bonded Terminal for 100% physical examination. The Terminal Manager and other TICT staff members had been invited by the Police to say what they knew in connection to the 10 containers.

Warrant of Arrest on CMA CMG Shipping Manager

On 20th April 2017, a Warrant of Arrest was issued by the Igbosere Magistrate Court in respect of CMA CMG Shipping Manager, Mr. Anthony Ukawoko. A copy of the warrant obtained by SATELLITE TIMES shows that police investigators had stated that CMA CMG “conspired to import prohibited goods suspected to be arms and ammunition by Fondora Ventures Ltd, J.I Ejison Int. Ltd, F.N Njoku, Donatus Obele and Don Climax Bonded Terminal and Ventures”.

The Police came to that hypothesis following the serial contradictions in the documentation process for the 10 containers as well as the apparent determination to conceal the true contents of the containers, changing them from soap to manicure and pedicure sets and back to soap which by the evasion of physical examination remains a mystery.

None of the telephone messages sent to the Customs Public Relations Officer, Mr. Joe Attah, were reverted to just as CMA CMG staffers refused to grant entry to SATELLITE TIMES’s reporter who had gone to the Lagos office of the shipping company to obtain official reaction for the story.

Resorting to the services of a courier company, GIG Logistics, SATELLITE TIMES on 28th September 2018 in Abuja sent a two-page media enquiry to the Managing Director of CMA CMG. About three weeks later, the company sent back the same media enquiry to this newspaper without commenting on any of the issues raised.

In November 2018, the same reporter returned to CMA’s office and after two days of attempts, the media enquiry was received and acknowledged by a staffer who claimed the shipping company had no Public Relation Officer.

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Exclusive: 44 companies import 500 containers using cloned Form M  

-over N9 billion diverted in tariff fraud



A photo of Apapa Port in Lagos, Nigeria used to illustrate the story

In what is probably the most brazen display of impunity by powerful syndicates at the Lagos seaport, a total of 44 companies are discovered to have imported about 500 containers into the country using same Form M. Of the 44 companies (see list below) 30 brought in various consignments using Form M with number MF20170010026/ BA No. 21420170005250 which was cloned and recycled 29 times over a period of two years between 2017 and 2018 in a massive and sophisticated serial tariff fraud.

Five of the 44 companies namely Max Holding & Sons Ltd, Auto Creation E-Hub Ltd, Joneble Holding & Sons Ltd, Bossman Holding Ltd and Vintage Nigeria Ltd used another cloned Form M with number MF20170019026/ BA No. 21420170005260 for their shipping transactions while the Form M used by three companies, Garba Murtala Tafida, Ogwuni Rolland Edwin and Pedrona Ltd are so tampered with vital information scrubbed out that this newspaper is unable to read them.

Two companies with business names The Seacorp Nig. Ltd and Flex Nig. Ltd utilised for their transactions one Form M MF2017013894/BA No. 21450034.

The last four companies each quoted Form M numbers in their documents thus: Sonai Shipping Ltd MF20180052740; Cosmos &Sons Ltd MF20170010111; Duncan Maritime Ventures Nig. Ltd MF20170094928 and Emoko Real Properties Nig. Ltd MF20130010026. Curiously, all the four Form Ms have no batch numbers thus making it impossible to determine the name of the bank that issued the Form Ms in the first place and also making it difficult to track the source of funds used by the business owners in the transactions.

Two months ago, in September, SATELLITE TIMES blew the lid on a powerful “Port Cabal” that specialised in using clone Form M documents to perpetrate large scale fraud at the Lagos seaports. The report exposed how the Cabal imported millions of dollars’ worth of luxury vehicles, many of them armoured, into the country using just one Form M. The offensive Form M with number: MF 20170010026 was used in importing a total of 554 luxury vehicles that included one Rolls Royce, 84 Toyota Landcruiser, 41 Toyota Fortuner, 123 Toyota Prado, 46 Lexus 570/460, 140 Toyota Hilux, 32 Toyota Camry, 21 Toyota Coaster, 43 Toyota Hiace, 21 Mitsbushi Pajero and 2 Range Rover, most of them armoured and targeted at high-end market.

Cargo manifest

Cargo manifest

While the September report about 17 companies colluding to use one Form M had left ordinary Nigerians and anti-corruption crusaders in utter disbelief, the story pales into insignificance with the latest discovery of 44 companies pulling off an even bigger fraud without the Colonel Hameed Ali-led leadership of the Nigerian Customs Service being any wiser. Intriguingly, it was the same Form M MF 20170010026 used by the 17 companies to bring in 554 exotic cars that was also utilized by a new group of 27 companies to import more cargoes, bringing the number to 44 consignees.

Form M explained

Form M is the most important item in the documentation process put in place by the Federal Government of Nigeria through the Central Bank of Nigeria (CBN) and the Nigeria Customs Service (NCS), to monitor goods imported into the country as well as to enable collection of import duties where applicable.

Any person intending to import physical goods into Nigeria must initiate the importation by processing a Form M through an authorised dealer (licensed bank). Alongside the Form M, a host of other documentation will be presented to the bank. Where approved, the Form M serves as authority to the bank to open letters of credit for foreign exchange transactions on behalf of the importer.

This form has a unique number which must be quoted/written on all the shipping documents; although there are exemptions such as Diplomatic cargos (of reasonable quantity), personal effects, goods shipped in by government agencies or goods shipped into Free Trade Zones in Nigeria such as the Calabar Free Trade Zone (CFTZ).

Form M is the first official document needed to initiate shipment to NigeriaThe life span of a Form M is 6 months (for general merchandise) and one year (for plant and machinery), after which an extension of 6 months (for general merchandise) and one year (for plant and machinery).


Cargo manifest

Cargo manifest

A Form M is usually issued for a particular supply contract (between the oversea manufacturer and the Nigerian importer) and allows for part shipments within the validity period. For large project such as stadium construction, a Bulk Form M can be issued, which allows continuous part shipments throughout the validity of the Form M.

Form M is a form of licence. Approval of a Form M depends, among other things, on the forex okayed for the importer by the CBN for a particular import. To obtain Form M, the importer must present his Tax Identification Number (TIN). In fact, the TIN is now key-username to log into the electronic platform to process this all-important document. Form M is not transferable from one importer to another. And a Form M approved for the import of a particular item cannot be used even by the same importer to bring in a different item.

An industry stakeholder (names withheld) gave “a rough estimate” of the values of the 500 containers imported by the 44 companies as “over N100 billion”. It will take the expertise of forensic financial investigators to arrive at the true value of the imports. However, SATELLITE TIMES was told that “because all the imports were luxury goods, they attract 20% duty of the true value, 50% levy and 5% VAT. Indeed, the cloning and manipulations of Form M and allied shipping documents are aimed at escaping payment of accurate levies and tariffs. The industry stakeholder added that the Federal government must have “lost nothing less than N9 billion to this batch alone of cloned Form M imports”.

Official reactions were sought by this newspaper at the headquarters of the Nigerian Customs Service in Abuja. Clearly-worded text messages sent to the mobile number of the Service PRO, Mr. Joe Attah, was not responded to at press time.

List of the 44 companies

1. Five Stax Group Ltd

2. Emy Cargo & Shipping Services

3. Volta MP Equipment Nig. Ltd

4. Vintage Nig. Ltd.

5. Suplus Nig. Ltd

6. Brasslet Nig. Ltd.

7. Sonnex Nig. Ltd.

8. Zako Bag Allied Nig. Ltd.

9. Kaslak Nig. Ltd.

10.Zeb Holding Ltd.

11.Cosmos & Sons Nig. Ltd.

12. Joneble Holding & Sons Nig. Ltd.

13. Amaju & Sons Nig. Ltd.

14. Zinktex Nig. Ltd.

15. Dabik Holding & Sons Nig. Ltd.

!6. Landhoast Ltd.

17. Ogwuni Rolland Edwin

18. Ruffo Nig. Ltd.

19. Marko Nig. Ltd.

20. Sengenmenge Nig. Ltd.

21. Offor and Sons Nig. Ltd.

22. Lext Vin Nig. Ltd.

23. Modul Oil and Gas Ltd

24. Ducan Maritime Ventures Nig. Ltd.

25. Carmen Ltd.

26. Garba Murtala Tafida

27. Auto Creation E-Hub Ltd.

28.  Emoko Real Properties Nig. Ltd.

29.  Osland Ltd.

30.  Brimax Still Nig. Ltd.

31. Akuabia Prince Afamefuna

32. Max Holding & Sons Ltd,

33.Auto Creation E-Hub Ltd,

34.Joneble Holding & Sons Ltd,

35.Bossman Holding Ltd

36. Vintage Nigeria Ltd

37. Garba Murtala Tafida,

38. Ogwuni Rolland Edwin and

39. Pedrona Ltd

40. The Seacorp Nig. Ltd

41. Flex Nig. Ltd

42. Sonai Shipping Ltd

43. Cosmos &Sons Ltd

44. Duncan Maritime Ventures Nig. Ltd


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Exclusive: After $2 Billion tax evasion, another MTN’s multi-billion offshore transfer discovered

-shifts billions to companies in Dubai and Mauritius



MTN building showing its logo

Weeks after the Nigerian authorities discovered that telecom giant MTN had skipped paying $2 billion in tax relating to import duties, VAT and withholding taxes on foreign imports/payments, new tranches of transfer are yet discovered to have been made by MTN to companies in Dubai and Mauritius using sophisticated tax avoidance schemes.

MTN has consistently prided itself as the foremost telephone company that gets Nigerians talking the most. Now the South African company is about to set tongues wagging across networks with revelations that it has routinely been shipping billions of naira overseas to avoid paying its fair share of tax in Nigeria.

An 11-month- investigation by this reporter in collaboration with UK-based Finance Uncovered reveals that MTN has been running circles around Nigerian revenue authorities using a complex but noxious tax avoidance scheme called Transfer Pricing. For any economy, it is a slow death.

The red flag was raised the moment our investigations showed that MTN Nigeria has been making payments to two overseas companies – MTN Dubai and MTN International in Mauritius – both located in tax havens.

It was discovered that in 2013 for example, MTN set aside N11.398 billion from MTN Nigeria to pay to MTN Dubai. A similar transfer of N11.789 billion was made by MTN Ghana to the same MTN Dubai, making it a total of N23.187 billion that was shipped to the Dubai offshore account.

In a rare disclosure in 2013, MTN admitted it made unauthorized payments of N37.6 billion to MTN Dubai between 2010 and 2013. The transfers were then “on-paid” to Mauritius, a shell company with zero number of staff and which physical presence in the capital Port Louis is nothing more than a post office letter box.

The disclosure amounted to a confession given that MTN made the dodgy transfers without seeking approval from the National Office for Technology Acquisition and Promotion (NOTAP), the body mandated to oversight such transfers.

N90.2 billion transferred out of Nigeria

On the basis of an earlier management fees agreement that was technically quashed by NOTAP and on the basis of MTN’s reported revenues, it is estimated that N90.2 billion could have been transferred out of Nigeria in management fees alone since the company was founded in 2002.

READ ALSO: INVESTIGATION: Secret memos and documents from MTN’s $14 Billion offshore transfers

A menace called Transfer Pricing

For corporate organizations determined to escape the taxman but still cleverly staying on the right side of the law, Transfer Pricing is the new cellar door constructed by the most ingenious of accountants. It is a new global disease to which Third World economies are the most vulnerable.

Multinationals employ Transfer Pricing to move their profits offshore, leaving behind a shrinking tax base in their host countries and inexorable cuts to public services.

In Africa, tax avoidance has been named as one of the factors holding the continent back by starving governments of the revenues it needs for development.

A report jointly commissioned by the United Nations and the African Union and drafted by a high-level panel led by former South African president Thabo Mbeki considered tax avoidance by multinationals to be an “illicit financial flow” and a significant drain on government resources across the continent.

In total, illicit financial flows -which included corruption and the proceeds of crime – were determined to be costing the continent $50billion a year.

Just last year, South Africa’s deputy president Cyril Ramaphosa had harsh words for tax dodgers. He said: “Tax evasion is not only a crime against the state; it’s also a crime against the people of our country, ordinary people.”

Curiously, the same Cyril Rhamaposa was non-executive chairman of the board of MTN between 2001 and 2013 before he became South Africa’s No.2 man. In effect, the same tax practices which the deputy president strongly condemned in his country as financial crime is vigorously being promoted in Nigeria.

READ ALSO: INVESTIGATION: AGF Malami may file “criminal charges” against Standard Chartered, Stanbic IBTC and Citi Bank over MTN’s $14 billion transfers

MTN is the largest cell phone company in Africa with 227.5 million subscribers. The company, which operates in more than 20 countries across Africa and the Middle East, has Nigeria as its biggest operation.

Until now, tax justice investigations had focused on computer giants, corporations in the extractive industry, food and beverages; in fact, everywhere but the mobile phone sector despite the cell phone industry in Africa being one of the largest and most important industries for the continent.

Mobile phone has been a cheap and quick way of rolling out the vital communications infrastructure that has underpinned Africa’s growth story over the last decade. As a result, the industry has seen explosive growth. With 685million mobile phone users in Africa, the success story means that cell phone companies are now the largest contributor to government revenues in many African countries. That is if they pay their fair share of taxes.

Artificial operating costs

To pay little or no tax, companies determined to cheat begin by seeking ways to create artificial operating costs in the country where they operate. For example, a company is in Nigeria but has a parent or subsidiary company in another country. It makes huge profit but decides to declare a much lower profit-before-tax. To achieve this, it pays the parent and/ or subsidiary company for services not rendered and ships cash to them. Where services are rendered, the costs are inflated. Such services may include royalty for the use of brand name, procurement services, technical services and management services.

Typically, the recipient company is located in an offshore territory under a different financial jurisdiction. MTN has a substantial network of subsidiaries in offshore tax havens, including the British Virgin Islands, Dubai and Mauritius.

Because of the growing concerns that multinationals are using intra-company trading to shift profits around the world by overcharging for services delivered or in more extreme cases by creating artificial transactions where no services were rendered at all, respective countries have a maximum percentage of profits it can allow companies to pay out as management fees.

For example, in Senegal, accounts from the company Sonatel show that the company has a ‘cooperation agreement’ with parent company France Telecom that is capped at 1.43% of revenue.

Until 2010 MTN Nigeria had an agreement with MTN Dubai to pay 1.75% of revenues to the company for management, and royalties for the use of the MTN trademark. Nigeria requires that management fees paid by multinationals are approved by the National Office for Technology Acquisition and Promotion (NOTAP). The fee payments had been reversed following a failure to come to a new agreement on management fees with Nigerian regulators.

READ ALSO: CBN yields to Satellite Times’ report; orders MTN to refund $8 billion

MTN’s previous agreement with NOTAP expired in 2010.

Notwithstanding, MTN has continued to make payments overseas. When these journalists sent questions to MTN over these unauthorized payments, the company told us that this was because they expected NOTAP to approve a new deal and backdate it to the date of the expiry of the previous deal.

MTN’s financial activities are now being questioned by more than one tax authorizes in Africa.

In Ghana the MTN subsidiary, Scancom, has been paying vast management fees to companies located offshore. Our investigations reveal that Scancom paid 758m GHS in management and technical fees to MTN Dubai between 2008 and 2013. This was 9.64% of the company’s revenue. Normally the maximum fee level allowed in Ghana is 6%.

We can reveal that the high levels of fees attracted the attention of Ghana’s intelligence services, which launched an investigation into “economic fraud” between 2012 and 2013.

MTN’s management fees need approval from the Ghana Investment Promotion Centre (GIPC). The Ghanaian “National Security Taskforce” has called for a “review of all technology transfer and management service agreements currently held by GIPC to remove sections which are inapplicable and wrongly provided for” and upgrading and training of state systems and staff.

In response to this, MTN in Ghana told us: “The technical and management services agreements between Scancom and Investcom were duly approved by the GIPC.”

The current head of the GIPC is Mrs. Mawuena Trebarh, who between 2007 and 2012 was responsible for government relations at MTN Ghana. This reporting team asked Mrs Trebarh to comment on whether her previous role could be perceived a conflict of interest. She did not respond to our requests.

In response to our enquiries MTN confirmed that the company paid 12 billion West African Francs in 2012 and 14 billion West African Francs in 2013 in management fees to MTN International. The figure for 2013 is equivalent to 5% of the revenue made by MTN in Cote d’Ivoire.

Dubai paradox

Dubai is one of the places MTN ships huge profits to. Meanwhile, MTN does not operate any mobile phones in Dubai, yet it has significant operations in the small city state.

MTN told us that it employs around 115 people in Dubai who provides services to the MTN group such as group procurement, group finance, legal services, human resources and other corporate functions.

One tool that campaigners have said will be helpful is to look at company reporting on a country by country basis. If a company is making huge revenues in a country where it has few employees but there is a low tax rate, which would suggest that there may be some profit shifting taking place.

In Uganda, a dispute between the Uganda Revenue Authority and MTN has revealed that the company is paying 3% of its turnover in management fees to MTN International.

The fees have been challenged by the Uganda Revenue Authority (URA) who issued MTN with a “notice of assessment” in 2011. This was for a number of tax issues between 2003 and 2009, but a large portion was to do with a dispute over management fees, most of which had been paid to Mauritius.

READ ALSO: EXCLUSIVE: South African President, UK and UAE lobbyists fought hard to stop MTN’s $8 billion sanction

Correspondence between the URA and MTN seen by us show that the URA questioned the legitimacy of these fees, and pointed out that MTNI, the company providing “management services” to MTN Uganda had not spent any money in the years they had looked into. The URA said this could only mean two things: that management services provided to MTN Uganda had either already been paid for by MTN Uganda (and so MTN was in effect charging twice for the same thing) or they were never provided at all.

The Ugandan authority told the company: “We have repeatedly asked for evidence of specific work performed by MTN Group for MTN Uganda for each of the tax years 2003 to 2009. We have only been provided with very little information relating to 2009 and the latter years. This information is very far from justifying a payment of 3 per cent of MTN Uganda’s turnover as management fees.”

NOTAP keeps mum

Asked to confirm the amount of fees paid out to MTN Dubai and Mauritius based on the company’s reported revenue between 2002 and today, MTN said: “There is no disclosure obligation for this information in South Africa or Nigeria.”

Asked to explain the possible justification for MTN Nigeria to pay fees for management and technical services to a company with no employees, MTN said: “It is the contracting party’s prerogative as to how it elects to discharge its contractual obligations.”

Meaning is that MTN Mauritius can perform its task without a single staff member.

This reporter made sustained efforts to get NOTAP and the Federal Inland Revenue Service (FIRS) to comment on the MTN practices in Nigeria.

The Director in charge of Technology Transfer and Agreement, Ephraim Okejiri, initially pleaded that he was in a meeting, and that the reporter should wait. But after over four hours of waiting, he sent a secretary to say he would not be able to give any information on MTN.

Similarly, at Nigeria’s tax agency, the Federal Inland Revenue Service, the Director of Public Communications, Emmanuel Obeta, who had earlier promised on three occasion to make information available on the matter suddenly had a change of mind. He claimed relevant officials who should provide him with the information sought were all not available.

Emmanuel Mayah first published this investigation in October 2015

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