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 BankThe 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]
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 IBTCSome 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 BankOn 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.
N30 billion ‘MMM’ scam hits GTB, Zenith, Stanbic IBTC and Diamond banks
A Ponzi scheme operator who in just five months managed to convince about 15,000 Nigerians to part with over N30 billion has absconded with the deposits lodged mostly in five different accounts with the Guaranty Trust Bank (GTB). One of the investors in the phoney scheme, Emadu Efe Eva, transferred one billion naira from his/her Diamond Bank account to one of the GTB accounts owned by the Ponzi promoters, Micheno Cooperative, GTB 0346460004. The billion naira transaction was carried out in Lagos on 19th July 2018. The same Emadu Efe Eva made a total of seven investment transactions between 22nd June 2018 and 27th July 2018.
Other commercial banks that housed the Ponzi deposits included Zenith Bank (corporate account no-1015774733), Diamond Bank (account number 0103771684) and Stanbic IBTC Bank (account number 0026336328). The promoter, careful not to be seen as another ‘MMM’ disguised its operations as a Cooperative Society by name ‘MMCS’, Micheno Multi-Purpose Cooperative Society. It operated five bank accounts with Guaranty Trust Bank- 0262809804, 0346460004, 0346460028, 0346460011 and 0346460035.
Coming barely 15 months after the MMM ponzi scheme hit Nigeria like a tidal wave, devastating homes and marriages as it swept away billions of naira in family finances, personal savings and other funds meant for school fees or collected as loans, the newest ‘MMM’ presented itself to the ever gullible populace as Micheno Multi-Purpose Cooperative. Preliminary investigations reveal that Micheno is actually a portmanteau for Michael and Eno, possibly a husband and wife affair.
The Cooperative said its mission was “to create a system that empowers its members through provision of quality, diversified, innovative and market-driven financial and technical services and exceeding members’ expectation”.
Bank documents supplied by Zenith Bank reveal that Micheno’s account with the bank has only two signatories, namely Mr Michael Uno Eke and Ms. Eno Queen Essien. Michael and Eno lent their first names to the Cooperative called Micheno. A joint petition written on behalf of “over 15,000 direct subscribers” states that sometimes in March 2018, the promoters of Micheno Multi-Purpose Cooperative Society obtained registration certificate for the Cooperative from the Federal Capital Territory (FCT) Registrar of Cooperative Societies. In June 2018, the promoters of the Cooperative put out advertisements inviting “unsuspecting members of the public to register and join the Cooperative. The names of the promoters and founding members of the Cooperatives were given as Michael Eke (President), Mbakara Aya (Vice President), Miss Eno Queen Essien, Miss Wendy Daniels, Efah Egba and Mrs. Rejunor Aya. Others are Mrs. Egan Adat Ben-Koko, Mrs. Ruth Bolu-Atte, Ekimini Archibong, Emem Harry and Barrister Tutu Ekeng.
Investigations revealed that the advert promotions targeting unwitting subscribers were done mainly through the “opening ceremony” held on 16th June 2018 at the Calabar International Conference Centre, billboards mounted in Abuja and Calabar, handbills, comedy/music shows and through referrals from trusted friends and family members. Other subscribers heard about Micheno from colleagues at work.
The official brochure of the MMCS scheme states its aim is to “coordinate entrepreneurs to poll private funds as a source of investment opportunities and credit for members.” The brochure went on to say the Cooperative was to engage in eight fields of investment namely: “collection of savings, real estate, haulage and logistics, agriculture, entertainment and events, oil and gas, multi-level marketing and general marketing of goods & services”.
The over 15,000 subscribers paid N10,000 each to pick what was called membership form. The subscribers were further invited to invest larger funds into the cooperative which will be invested in oil & gas, aviation, real estate and other high-end sectors to attract profit returns of 50-80% in 40 days.
Some of the highest subscribers to the scheme included Essien Raymond Ukpong who also unbelievably transferred a total sum of N360 million from his GTB account to another GTB account owned by Micheno Multipurpose Cooperative Society Ltd. Ndifon Ndim-Ejor of Cross River invested N63 million in the scheme.
Ayuk Kakore Egbe of Abuja on 3rd August paid N36 million into another of Micheno’s bank account with GTB by name Micheno Cooperative Scheme Ltd while Wendy Daniel of Cross River deposited N70 million on 30th July 2018. Wendy made 15 additional payments into MMCS accounts between 26th June and 31st July, bringing her total investments in the scheme to N570 million.
Another is Onyi Chijoke of Calabar who on 4th August invested N4 million. Isah Benjamim of Kaduna on 27th July paid in N19.9 million; Ugochukwu Geraard Okongwu of Calabar paid in N6million on 4th June; Morphy Farms of Cross River paid in N15million on 25th June while Ukpe Emem Nathaniel of Akwa Ibom paid in N11 million on 30th July.
Other subscribers who deposited huge sums into Micheno Cooperative’s bank accounts included
Mr. Abubakar Wakili of Abuja who on 26th June 2018 paid the sum of N8 million into Micheno Cooperative’s GTB account from his own bank, First Bank. Udoh Paul Sunday of Lagos paid in N13 million in three transactions carried out on the 18th, 19th and 20th July 2018, all GTB to GTB transactions.
Odeyeuma Francis of Abuja paid in N9 million on 1st August; Ekpenyong Joseph Okon of Lagos deposited N5 million on 14thJuly; Sunday Chinagorom paid in N10.2 million;
Rubymarsh Energy of Calabar invested N10.2 million; Victor Essien of Uyo paid in N10 million on 9th July; Otobong Udofia of Uyo invested N7 million on 13th July; Mba Nnenna Esther of Calabar paid in N13 million on 11th July. Oqua Etim Asuquo of Calabar paid in N22.6 million. The payment was in two tranches recorded on 13th and 19th July 2018 while Dorathy Ada Pamou of Calabar deposited from her First Bank account, a total of N26.5 million in seven transactions between 29th June and 26th November 2018. The list is endless.
Subscribers to the MMCS scheme, led by Adindu M. Ohawwe and Daniel Ojima, said the 40 days given for their investments to mature came and gone but they received no payments. No verifiable explanation was given. In the attempt to trace the Cooperative’s funds, five different registered companies bearing the name Micheno were discovered. Checks at the Corporate Affairs Commission (CAC), show that they were all registered by Michael Uko Eke as his business enterprises. The companies are Micheno Ventures, Micheno Global Investment Limited, Micheno & More Business Limited, Micheno Oil & Gas Limited and Micheno Group of Companies Limited. While Micheno Ventures with address as 6 Noble Apartment, Parliamentary Road, Calabar, was registered 3rd November 2017, the other four companies were registered the same day, 30th April 2018. The four companies have the same address: 38 Parliamentary Road, Calabar.
It was also discovered in practical terms that all the Cooperative’s accounts were operated by a sole signatory, Uno Michael Eke, with BVN 22178917780. The same Michael Uno Eke has several personal bank accounts which investors to his scheme claimed were used to warehouse funds diverted from the Cooperative’s accounts. He has two accounts with Keystone Bank; one a domiciliary account, the other, a joint savings account with Essien Enobong.
Subscribers to the MMCS scheme decry what they call regulatory lapses of the Central Bank of Nigeria (CBN) and poor risk assessments by commercial banks which in this case turn them into “vehicle of fraud to the detriment of unsuspecting members of the public”. In a petition sent to the National Assembly, the investors want the affected commercial banks to tell them “where the funds of the Cooperative were diverted to”.
They also would want to know why no red flag was ever raised on Micheno Cooperative bank accounts. “If the influx of funds did not attract the attention of the apex bank, at least the volumes of monies (over N25 billion) moved out of the Cooperative’s accounts within 2 months should have attracted the attention of the regulator”, they pondered.
In efforts to speak with someone from MMCS, SATELLITE TIMES dialed some telephone numbers found on Micheno’s promotional materials. One of the calls connected. When the receiver was asked if he was Micheal Eke, a male voice hastily replied, “God forbid”. The receiver who was identified through the Truecaller app as MC Mbakara declined to comment on his relationship with Micheno. He excused himself from the phone conversation saying he was busy in the studio doing some recordings.
Another call was to Esther Isek, one of the female models whose photographs and telephone numbers had featured prominently on brochures, handbills and Micheno’s other promotional items. She confirmed being a registered member of the cooperative. Esther said she put her money into the scheme with hopes of making high returns but soon after, it was one story to the other until her investment and those of many others were siphoned. Asked if she knew the whereabouts of Michael Eke, she replied, “The last we heard was that he is in custody.”
When this newspaper contacted Michael on his mobile, it did not appear he was in police net. After his phone rang out for a second time, he switched it off.
(to be continued).
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.
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
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.
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.
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.
Exclusive: 44 companies import 500 containers using cloned Form M
-over N9 billion diverted in tariff fraud
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.
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 Nigeria. The 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).
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
Follow me on Twitter
Human Rights12 months ago
2 Nigerian girls killed by their bosses in Saudi Arabia
Health1 year ago
Mass food poisoning in Nigeria: Lebanese floods markets with toxic buffalo meat
Investigations1 year ago
N15.7 Billion NAPEP fund traced to 18 private bank accounts
Investigations1 year ago
Police Promotion Scandal: Spokesman Jimoh Moshood elevated twice in 3 months, P.A to Inspector General promoted above mates
Human Rights10 months ago
Missing General: Heavily pregnant woman held captive by Nigerian Army in Jos
Investigations1 year ago
New Immigration Recruitment: Kano 355, Lagos 43, Niger 196, Bayelsa 27
Investigations1 year ago
N128 billion World Bank fund traced to Dieziani’s ally, Kola Aluko
Investigations12 months ago
Accountant exposes how First Bank, three others, pinch millions from depositors’ accounts