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Investigations

Shipping fraud: 17 companies import Rolls Royce, 553 bullet-proof vehicles into Nigeria using only one Form M

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A Rolls Royce used to illustrate the story
A Rolls Royce used to illustrate the story

Large scale fraud in the Nigeria Customs Service has taken a turn for the worse as a total of 17 companies are discovered to have imported millions of dollars’ worth of luxury vehicles, many of them armoured, into the country using just one Form M.

SATELLITE TIMES has been following the paper trail of high flier importers since last year when the Senate’s Joint Committee on Customs, Excise and Tariff raised the alarm on the activities of people it described as “Port Cabal” which it said had “swindled Nigeria of over 30 trillion naira in recent years”.

Documents gathered by SATELLITE TIMES show that between 2017 and May 2018, a total of 554 luxury vehicles were imported by the 17 companies using the same Form M No: MF 20170010026. The luxury cars 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. The vehicles, targeted at high-end market, are 2017 and 2018 models; most of them armoured.

 

In looking into the activities of the Customs, financial leakages and malpractices in the nation’s ports and revenue system, the Senate Joint Committee had in 2017 said: “a group of unpatriotic persons brazenly constitute themselves into a cabal to inflict infractions at the nation’s sea ports.”

Cargo manifest

Cargo manifest

The Committee had added that the infractions had become daily occurrence just as it accused commercial banks, shipping companies, terminal owners and operators of colluding with officials of Nigeria Customs Service and Nigerian Ports Authority (NPA) to defraud the country in trillions of naira and inversely constitute a clear and present security threat to our nation.”

Investigations revealed that infractions at the seaports and airport cargo terminals come in various forms including Form M racketeering, the abuse and violation of foreign exchange issued by the Central Bank of Nigeria (CBN), incorrect classification and under valuation of consignments coming into the country.

What is Form M?

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 nowkey-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.

The 17 companies

The 17 companies that managed to beat the system, cloning and utilizing Form M No: MF 20170010026  to bring in their different consignments, instead of obtaining 17 different Form M with 17 different tax identification numbers are:

1.Sengenmenge Nig. Ltd

2. Marko Nig. Ltd

3. Brasslet Nig. Ltd

4. Offor & Son Nig. Ltd

5. Lext Vin Nig. Ltd

6. Modul Oil & Gas Limited.

7. Supulus Nig. Limited

8. Zeb Holdings Limited

9. Amaju & Son Limited

10. Vintage Nig. Limited

11. Joneble Holding & Sons Limited

12. Kaslak Nig. Limited

13. Handhoast Limited

14. Ruffo Nig. Limited

15. Auto Creation E-Hub Limited

16. Sonnex Nig. Limited

17. Emy Cargo and Shipping Services.

Speaking on the issue of the Form M, Mr. Ojerinde Solomon, an importer at PTML container terminal said he had serious doubt if a Form M is transferable to another importer or consignments “because each consigned goods has its own Form M.”

Cargo manifest

Cargo manifest

Anti-corruption campaigner, Olalekan Akande, expressed his shock to SATELLITE TIMES that the systems of the Nigeria Customs Service did not detect the cloned Form M.

“There are many things involved here. Is it that the 16 companies do not have tax identification numbers to process their own Form M or is it that they were unable to get forex allocations locally to import and then resorted to using their funds in overseas to bring in goods but do not know how to explain their sources of the forex to CBN to get approval for Form M? We might be dealing with a case of money laundering here,” Akande intoned.

Under the Forex Restriction Guidelines, any importer that intends to finance imports using funds from overseas is required to submit a written confirmation from the authorised dealer on the source of funds, and evidence of the source of funds, before a Form M can be issued. This is to check money laundering and terrorism financing.

(to be continued)

 

 

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Tukur Lamido

Waiting to read the last part of the story.
We expect a thorough investigation of the matter by those concerned.
Keep it up Satellite Times

Anonymous
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I think everyone concerned that have read this are anxiously waiting to see other parts of this story.

Investigations

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

– MTN’s dealings was tagged a national security issue

– Department of State Security (DSS) requested to step in

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South African President Cyril Ramaphosa
South African President Cyril Ramaphosa [Photo Credit: BBC.com]

Weeks before the CBN sledgehammer finally hit the South African telecom company MTN over fraudulent repatriation of $14 billion from the Nigerian economy, several ultra-powerful lobbyists were recruited from within and outside Nigeria and from a few foreign governments, including those of South Africa, UK and the United Arab Emirates (UAE) to roll back the tide that threatened to sink the biggest South African company in sub-Saharan Africa.

In a statement released last Wednesday, Nigeria’s apex bank ordered MTN to refund the sum of $8 billion to the coffers of the Central Bank. The refund was the penalty for MTN’s exportation of $14 billion using fraudulent Certificate of Capital Imports (CCIs). For their roles in the illicit transfer, MTN’s bankers were sanctioned by CBN with Standard Chartered attracting a fine of N2.4 billion, Stanbic IBTC N1.8 billion, Citibank N1.2 billion and Diamond Bank N250 million respectively.

In February 2018, SATELLITE TIMES brought to public attention secret documents of MTN’s financial dealings found so outrageous it was tagged a national security issue, forcing the Office of the Attorney General of the Federation (AGF) to request the Department of Security Services (DSS) to step in.

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

In an exclusive report, SATELLITE TIMES published details of a secret forensic audit ordered by the office of the Attorney General of the Federation (AGF) which revealed some of the most repugnant demonstrations of impunity by a multinational company and how MTN illegally exported $14 billion out of Nigeria using fraudulent Certificate of Capital Imports (CCIs). The report titled “Investigations: Secret memos and documents from MTN’s $14 billion offshore transfers” also brought to public attention the role in the CCI saga of MTN’s four bankers namely Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond Bank.

The $8 billion penalty was long in coming. About six weeks ago, SATELLITE TIMES was tipped off by an authoritative source that CBN was ready to hit MTN with a sledge hammer. The press statement read out last Wednesday by CBN ‘s Director of Communications, Isaac Okorafor, was actually prepared in July. But extraneous factors including influences of powerful political figures badly hamstrung the apex bank from making the pronouncement on MTN.

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

On July 12, South African President Ramaphosa visited Nigeria and held a close-door meeting with President Mohammadu Buhari. The official reason for his visit was

“to thank the people of Nigeria and the leadership of Nigeria over many years for the support they gave to our (apartheid) struggle.”

The real reason for Ramaphosa’s visit was however different. Ramaphosa had dual interests in MTN. As President of South Africa, his intervention was needed to save one of South Africa’s biggest cash cows in foreign land. The other is that as a businessman, Ramaphosa has substantial interest in MTN.

Before he became Deputy President in 2014, serving under Jacob Zuma, Cyril Ramaphosa was a non-executive director and chairman of MTN Group with acquisition of minority stake in the group’s Nigerian interests. Ramaphosa was appointed to the MTN Board on 1 October 2001 and had been serving as chairman of the MTN Board since 2002. He had also been chairman of the nominations committee as well as a member of the remuneration and human resources committee at MTN.

The South African President was not only deeply involved with MTN, he was equally involved in others including a company called Shanduka Group. Shanduka was the President’s investment company, buying into MTN Nigeria in a $335 million deal.

The investment suffered massive loss in value due to the heavy fine imposed on MTN in October 2015 for violations of Nigerian subscriber registration rules. Another heavy penalty on MTN would provide multiple reasons for sleepless nights for the President that must be averted using every diplomatic instruments.

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

SATELLITE TIMES further gathered that beyond political and business stakeholders in South Africa, strings were also pulled on Nigeria by powerful lobbyists and investors in UK and UAE. MTN maintains over 1000 personnel in UAE but curiously does not have a one telephone line in that country.

One of the last-ditch efforts to save MTN came from a powerful lobbyist from Funtua in Katsina State, described as a childhood friend of President Muhammadu Buhari. CBN was therefore slow in acting because the governor of the apex bank was uncertain if the lobbyist was a messenger of the President or that the Funtua businessman was merely carrying out his own protection racket.

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Investigations

Accountant exposes how First Bank, three others, pinch millions from depositors’ accounts

-N98.4 Million missing from Nnamdi Azikiwe University Teaching Hospital account alone

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First Bank office used to illustrate the story

Forensic auditors examining the bank accounts of the Nnamdi Azikiwe University Teaching Hospital Nnewi, in Anambra State, were stunned to discover that the health institution had been a victim of account manipulation by four different banks over a period of 16 years.

Between 2000 and 2016 the Teaching Hospital had been fleeced of a total N98,390, 184.05 through fraudulent manipulations of its corporate accounts by its bankers – First Bank, Eco Bank, Zenith Bank and United Bank for Africa (UBA).

Millions of unsuspecting bank account owners in Nigeria may never know how much have been stolen from them through unscrupulous manipulations by even their most favourite banks. Banks, cashing in on depositors’ lack of technical ability to scrutinize their accounts and detect possible infractions may have bilked billions of naira from customers over the years through fraudulent excess charges.

SATELLITE TIMES gathered that upon detection of the serial infractions, a consultant, Mr. Victor Inyiama, acting on behalf of the Teaching Hospital lodged a petition with the Consumer Protection Department of the Central Bank of Nigeria (CBN). The apex bank forwarded the claims of the complainants to the affected banks. However, dissatisfied with the outcomes of the CBN arbitration which let all the four accused banks off the hook, the complainant recourse to petitioning the House of Representatives.

Upon a Forensic audit conducted on the accounts of Nnamdi Azikiwe University Teaching Hospital with First Bank of Nigeria, the bank was found to have manipulated the client’s accounts between 2003 and 2016 with the application of excess charges amounting to N86, 250.942.71.

In another documents trail, it was found that between January 2000 and December 2015, excess charges totalling N11, 619, 478.84 Naira were made on the accounts of the same customer: Nnamdi Azikiwe University Teaching Hospital (NAUTH) with Zenith Bank Plc.

Ecobank, also involved in the controversial excess charges on the Teaching Hospital’s accounts, was found to have taken out N347, 583.30 from one of the accounts between August 2010 and May 2017.

Documents obtained by SATELLITE TIMES show that excess charges resulting from Commission on Turn-over (COT), management fee, and internet banking also occurred on the Teaching Hospital’s accounts with UBA Plc between November 2004 and December 2009. Together with accrued interests, the amount was put at N172, 179.20 based on audit findings.

Evidence available show that the four banks did not absolutely refute the claims of excess charges when a formal complaint was lodged by the customer. Rather, they sought an escape route and believed to have found one in the Time Bar Policy of the Central Bank which stipulates that complaints about transactions must be lodged within 6 (Six) years of the date of infraction (the transaction date).

Fact-checks by SATELLITE TIMES revealed that the Time Bar Policy exempts all complaints related to fraud; complaints previously lodged with the CBN or financial institutions; and complaints related to international electronic payment transactions.

The rationale behind the Time Bar Policy is so as to align with the provisions of other statutes such as the Money Laundering (Prohibition) Act 2013; the CBN Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regulation for banks and other financial institutions in Nigeria 2013; and the Statutes of Limitation – Record Retention.

Following the intervention of the House of Representatives, Ecobank, UBA and Zenith Bank made a U-turn acceding to pay back the excess charges to the Teaching Hospital. Consequently, the three banks credited the complainant’s accounts accordingly: Eco Bank, N347, 583. 30; UBA N172, 179.20 and Zenith Bank N11. 619, 478.84.

The three banks however insisted the refunds were strictly done “in recognition of existing cordial business relationship with the customer”.

First Bank which has the highest refund of N86.2 million to make is sticking to its gun and neither the CBN nor the House of Representatives appears capable of compelling it to pay.

The CBN says that while the actions of Ecobank, UBA and Zenith Bank in making refunds to the customer is commendable, “The CBN is constrained from requesting First Bank to make any refunds.”

A document from First Bank dated June 8, 2018 with the reference no: Internal Audit/CIM65188/A00, jointly signed by Peter Nzeragu and Ben Opiah both of the Internal Audit department, reads: “We held meetings with the management of the University Teaching Hospital who acknowledged satisfaction with the clarification. However, the issue has lingered because of the Consultant’s refusal to withdraw the claim but stated that the onus lied on the Consultant for further discussion on the matter.”

First Bank, insisting on time bar, explained that “our review then commenced from November 2010” not from 2003 when the controversial charges began on Management Fees, COT, and interests on overdrafts.

Countering First Bank, the Chartered Accountants, Vincent Inyiama & Co, who detected the excess charges classify the infractions as fraud and thus insist they cannot be said to be Statute Bar.

Almost all the banks argued that they had no case to answer on excess charges related to electronic banking services.

Section 10 of the CBN Guide to Bank Charges (2004) stipulates that all charges on electronic banking services were negotiable.

Eco Bank specifically citing the CBN Guide argued that the customer was not entitled to a refund resulting from electronic banking charges, “since the customer did not negotiate any rate with that bank.”

The bank however failed to highlight an important portion of the guideline which says:

Where a charge is ‘negotiable’, banks and OFI, are required to draw the attention of customers to their rights to negotiate and the two parties are required to naturally agree on the applicable interest and/or charge via a verifiable means.” 

In the case of the Teaching Hospital, the attention of the customer was not drawn to its right to negotiation thus exposing it to insidious financial harms caused by banks’ controversial nibbling at customers’ deposits.

Joyce Idiahi, a Customer Relations Officer with one of the affected four banks told SATELLITE TIMES her desk rarely receives complaints bothering on excess charges. Asked if that was not because customers are largely unaware of these excess charges, she added:

“My bank complies with the Central Bank directives that we send monthly statement of accounts to all our customers, be they individual or corporate account holders. But what you are saying is frightening because if just one customer is hit with almost N100 million in excess charges, the volume across the country can only best be imagined.”

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Investigations

N128 billion World Bank fund traced to Dieziani’s ally, Kola Aluko

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Kola Aluko
Kola Aluko

A total sum of N128 billion ($355 million) World Bank Fund has been traced to controversial international businessman Kola Aluko; an ally of Nigeria’s erstwhile Minister of Petroleum, Mrs. Dieziani Allison-Madueke.

Until recently when most of his known assets across the globe were seized, Nigerian-born Kola Aluko was the owner of over two dozen companies, multi-million dollars private jets, mansions in celebrity neighbourhoods as well as being the owner of one of the world’s most fascinating luxury yachts – the MY Galactica Star.

The $355 million World Bank money was shockingly found to have been invested in Seven Energy, a company owned by Kola Aluko. Seven Energy at the time was described as a company that might be involved in pillaging billions of dollars belonging to the Nigerian state. A due diligence investigation conducted by Nicholas Hildyard of the UK-based Corner House threw up some unbelievable findings on decisions made by financial investment experts within the World Bank.

Hildyard’s report, made available to SATELLITE TIMES, shows that on 1st May 2014, the World Bank’s International Finance Corporation (IFC) bought $75 million worth of shares in a Mauritius-registered oil and gas company, Seven Energy International Limited, which at the time operated and traded in Nigeria as “Septa Energy” . The company is now known as Seven Exploration.

A further investment of $30 million was made at the same time through the IFC African, Latin American and Caribbean Fund which is managed by the IFC’s secrecy jurisdiction-registered Asset Management Company. And a few months later, in October 2014, the IFC provided further funds through an anchor investment of up to $50 million in the company’s inaugural bond issue. At the time, the investments constituted the “IFC’s largest equity financing in the oil and gas sector in Africa”.

Another World Bank subsidiary, Multilateral Investment Guarantee Agency (MIGA) later provided a $200 million guarantee to the Kola Aluko company in September 2015. While IFC is the World bank’s private sector investment arm, MIGA is the political risk insurance and credit enhancement arm of the World Bank Group.

Beginning from November 2010 when it ventured into Nigeria’s oil industry, Septa Energy – a wholly owned Nigerian subsidiary of Seven Energy International Limited – had never been short of controversies. It began life by entering into Strategic Alliance Agreements (SAA) with the Nigeria National Petroleum Corporation (NNPC) and its subsidiary the Nigerian Petroleum Development Company (NPDC). Aluko and his partners were alleged to have used Seven Energy as a vehicle for laundering stolen oil funds.

In July 2017, the US Department of Justice sought to seize $144 million in assets said to have been bought with monies due to the Federal Government of Nigeria but diverted for the benefit of Aluko and his partners. The court papers are explicit that the assets are “derived from an international conspiracy to obtain lucrative business opportunities in the Nigerian oil and gas sector in return for corruptly offering and giving millions of dollars’ worth of gifts and benefits to the former Nigerian Oil Minister for Petroleum, Diezani Alison-Madueke; and to subsequently launder the proceeds of the illicit business opportunities into and through the United States”.

Loud as the pronouncements from the US court room were, the World Bank investment fund executives gave no hint they heard anything. The IFC is housed at 2121 Pennsylvania Avenue, NW, Washington, DC 20433 USA while the MIGA is domiciled at the World Bank Group, 1818 H Street, NW, Washington, DC 20433 USA.

The court papers stated that Kola Aluko had “acquired the luxury yacht, Galactica Star, at the cost of $80 million. He bought 58 exotic cars, expensive watches, private jets, Global Express S5-GMG and a Bombardier Global 6000 9H-OPE.”

The court papers further noted that Aluko still had a bank balance of “$25 million in LDT Switzerland, $1million at Corner Bank, Lugano, Switzerland; $40million at Deutsche Bank, Geneva; and 175,000 at HSBC, London.”

Meanwhile, the US government had earlier filed a suit to recover the sum of $144 million in assets said to be proceeds from the oil contracts.

In June 2016, the Nigerian government sought and later obtained a worldwide freezing order directing 19 Nigerian banks, eight foreign banks and eight local and international firms to freeze the funds and assets they hold on behalf of Aluko, his business partner Jide Omokore and two companies owned by the Atlantic Energy Group.

The attraction of a World Bank arm to Kola Aluko’s Seven Energy remains a puzzle. IFC’s rules require it to assess “integrity risk issues” related to “the institutions and persons” involved in a given investment and that these risks are to be monitored “throughout the life of the project or engagement”

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