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Market Digest Nigeria

Uncategorized

Nigerian Newspaper Headlines (3rd October, 2019)

Federal Government

Federal Government

Punch Newspaper: $9.6bn judgment: FG orders lawyers to appeal $200m security deposit

The Federal Government said it had directed its lawyers to seek the leave of the Court of Appeal to appeal the ruling of Justice Christopher Butcher of the Commercial Court in London that asked Nigeria to pay $200m security payment into the court’s account while granting request to stay execution in the $9.6bn award in favour of Process and Industrial Development Limited.

The Minister of Information and Culture, Lai Mohammed, who was part of the Federal Government’s delegation to London last week disclosed this to reporters in Abuja on Wednesday. He said the government retained international legal firm of Curtis, Mallet-Prevost, Colt & Mosle LLP, for the case. Apart from the $200m, the minister said the government would be able to seek refund of the $250,000 it was asked to pay to P&ID if the appeal succeeded.

Mohammed argued that contrary to claims by the P&ID and “its cohorts”, the government delegation’s trip to London was a successful one. Describing the delegation’s mission as a huge success, the minister said the firm had every reason to be worried that the $9.6bn arbitration awarded to it had a good chance of being overturned.

He said, “The Federal Government has a good chance of being successful in its impending appeal, otherwise the Commercial Court would not have allowed the appeal. “Please note that Nigeria will be able to demand a refund of the 250,000 GBP payment to P&ID where the government wins on the appeal. This fact is being hidden by those who have been spinning the London judgment in their own favour. “On the $200m payment as a condition for the granting of the stay of execution, Nigeria has instructed its lawyers to seek the leave of the Court of Appeal to appeal against that payment. “Nigerians should remain assured that the Federal Government is taking all necessary steps to strongly avail itself of all defences customarily afforded to sovereign states under the United Kingdom Sovereign Immunity Act to fight and upturn any enforcement of the award. “In the words of Mr President at the 74th session of the UN General Assembly in New York last week, we are giving notice to international criminal groups by the vigorous prosecution of the P&ID scam attempting to cheat Nigeria of billions of dollars.”

We have shown that P&ID is a fraud – FG

The minister added that the Federal Government had succeeded in changing the false narrative being peddled by the P&ID both within and outside Nigeria by putting across strong evidence that the company is a fraud. “For those who may still not understand the gravity of the judgment of the Commercial Court in London last week, let me say that had we lost our quest for a stay of execution and application to appeal in London last week, P&ID would by now be attempting to seize our assets all over the world. “Remember they boasted before the judgment that they had started compiling a list of our assets which they would attach. But now, that’s an empty boast, thanks to the successes recorded in the court of law and the court of public opinion last week,” he added.

He disclosed that ahead of the trip, the team that comprised  himself; the Attorney General of the Federation, Abubakar Malami; Governor of the Central Bank of Nigeria, Godwin Emefiele; Inspector-General of Police, Mohammed Adamu; Assistant Inspector-General of Police, Ibrahim Lamorde; and the acting Chairman of the Economic and Financial Crimes Commission, Ibrahim Magu, set off to achieve three main objectives which appeared to be difficult.

The objectives, according to him, were to change the narrative, especially on the international stage, on the entire P&ID issue; apply for leave of the Commercial Court to appeal the judgment that recognised the arbitration award; and to seek a stay of execution on the UK judgment that recognised the award. The minister boasted that the delegation achieved all the three objectives. He added, “First, we took London by storm, taking our case to international media outlets and Think Tanks like AP, AFP, Reuters, Bloomberg, BBC, Financial Times, The Economist, The African Confidential, Royal African Society and the Red Lions Chambers, a leading Barrister’s Chambers in London, among others.

“We also met a group of experts and stakeholders. Our message was simple: P&ID, a company without a physical address and no known investment anywhere in the world, set out to dupe Nigeria from day one, with the connivance of unpatriotic, corrupt and greedy Nigerians. The entire Gas Supply Processing Agreement, which P&ID entered into with the Ministry of Petroleum Resources, is nothing but a fraudulent contraption with no chance, or expectation, of success. “We then said the unprecedented $9.6bn in arbitration award to P&ID constitutes an unreasonable reward to a company that has done nothing more than to engage in fraud and economic sabotage. This runs contrary to the course of justice and is capable of bringing harm and hardship to Nigeria, and indeed the wider region.”

He insisted that a contract of such magnitude could not be valid until it has been vetted by the Office of the Attorney-General of the Federation and taken to the Federal Executive Council for approval, saying none of those was done. He added that the “sham contract” was also signed in contravention of the Bureau of Public Procurement Act and the Infrastructural Regulatory Commission Procurement Act.

According to the minister, the MoU for the project was signed in 2009 by P&ID Nigeria Limited and the Nigerian government (Ministry of Petroleum Resources). He said a ‘trick’ clause dubiously inserted into the MoU was curiously activated that allowed British Virgin Island (BVI)-registered P&ID to replace the original contractual party, P&ID Nigeria Limited, to sign the contract on January 11, 2010.

According to him, P&ID, incorporated in BVI, is a shell company that has no history of any business except the phantom GSPA in Nigeria, adding that there is no board resolution approving the assignment of the contractual interest to P&ID BVI. He added, “The P&ID never kick-started the construction of the project facility, despite its claim to have invested $40m in Nigeria. It also never acquired any land to build the gas processing plant. “There is no proof of any financial commitment by the P&ID towards the execution and implementation of its own obligation as stipulated in the 2010 agreement. Similarly, the Central Bank of Nigeria confirmed there is no trace of any funds brought into Nigeria by P&ID. “Two directors of P&ID Nigeria have been convicted of charges of money laundering and economic sabotage. They are Mohammed Kuchazi, a Director of P&ID BVI, and Adamu Usman, a Director of P&ID Nigeria.

“Suspicious payments were made to Mrs Grace Taiga, the Legal Director in the Ministry of Petroleum Resources. Mrs Taiga was supposed to ensure that the interest of the country was adequately protected. Of course, the payment, transferred in three tranches, could only have been made in appreciation of the ‘good deed’ done to P&ID by Mrs Taiga. Also, billions of naira in suspicious cash transfers were made by P&ID. Investigations continue into these transfers. “According to the contract, the gas for the project was expected to come from OML 67 operated by ExxonMobil and OML 123 operated by Addax. But none of the two companies was even aware of the agreement. “And finally, for such a supposedly important project, there was no budgetary provision for the implementation of the GSPA in the budget of the Ministry of Petroleum Resources in 2010, and P&ID did not obtain the necessary licence to deal in petroleum products from the Department of Petroleum Resources as stipulated by extant laws. The firm also neither filed tax returns nor paid VAT to the Federal Inland Revenue Service (FIRS) as required by law.” He said all but one of the six proposed grounds of appeal by the Nigerian government were allowed by the Commercial Court.  This, he said, was a huge success.

Federal Government

Guardian Newspaper: ‘Why Buhari shouldn’t rebuild toll gates Obasanjo removed’

Sixteen years after the then President Olusegun Obasanjo demolished toll gates on the nation’s expressways, the government of President Muhammadu Buhari is considering their return. But already, there is a groundswell of opposition to the plan. Indeed, some engineers yesterday advocated sector reform, rather than tolling, as a lasting solution to road maintenance in the country.

Their suggestion followed the disclosure by Minister of Works and Housing Babatunde Fashola that the Federal Government would reintroduce toll plazas. Former President Olusegun Obasanjo had ordered the demolition of tollgates in 2003, saying roads should be maintained through revenue from the increase in fuel pump price. He had also argued that the N63 million collected daily was insignificant and that the facilities constituted inconvenience to motorists and encouraged corruption.

Fashola told reporters after the Federal Executive Council meeting in Abuja: “There is no reason why we can’t toll. There was a policy of the government to abolish tolls or as it were, dismantle toll plazas. But there is no law that prohibits tolling in Nigeria today. “We expect to return toll plazas. We have concluded the designs of what they will look like, what materials they will be rebuilt with, and what new considerations must go into them. What we are looking at now and trying to conclude is how the bank end runs.”

But the national chairman, Nigerian Institution of Highway and Transportation Engineers, Oludayo Oluyemi, faulted the move, saying: “You can’t tell me there is a good road in the federation except within the Federal Capital Territory. No interstate highway in this country is good. So, how many of them do they think they would get tolls from?”

According to him, the Federal Government does not have a choice “but to do the road sector reform because that is the most appropriate thing for us as a nation. The introduction of tolls will not solve any problem.” Also, President of Nigerian Society of Engineers (NSE) Kunle Mokuolu said that while tolling appears to be a good option because roads need funds, a permanent solution would be engaging the private sector with the government acting as the regulator. According to him, it is better for the government to regulate the private sector than regulate itself.

He called for the use of technology if government insists on tolling. He said this would enhance operations since the number of vehicles has doubled. The former NSE chairman (Apapa chapter), Ombugadu Garba, expressed concern over the sustainability of government policy, just as his successor, Sunny Ejeje, worried about government’s ability to plough back generated revenue into road maintenance.

Similarly, the opposition Peoples Democratic Party (PDP) criticised the idea in a statement released by its national publicity secretary, Kola Ologbondiyan. It said toll plazas in the midst of economic hardship and the high cost of living occasioned by the alleged harsh policies of the Buhari administration are ill-conceived and anti-people. “Such an idea amounts to executive bullying which cannot be justified under any guise as it will lead to more increase in costs of goods and services across the country. Only recently, President Buhari approved the increase of Value Added Tax (VAT) from 5 per cent to 7.2 per cent despite outcry by Nigerians, who are also being made to pay exorbitant tariffs for electricity and other essential services,” the party said. It noted: “Nigerians could recall that the PDP administration, in keeping with our determination to ensure the wellbeing and economic prosperity of our citizens, dismantled toll gates, cut tax profiles and applied our energies towards wealth creation.” The PDP therefore charged Buhari to immediately rescind the decision.

Meanwhile, Buhari will on Saturday preside over an emergency FEC session at the Presidential Villa, Abuja. It was learnt Wednesday night that the meeting will hold when the president returns from his trip to South Africa at the weekend.

Senior Special Assistant on Media and Publicity Garba Shehu had specifically disclosed in a statement on Tuesday that Buhari would return on Friday. The president departed Abuja Wednesday on a three-day state visit to the Republic of South Africa, following an invitation by President Cyril Ramaphosa to discuss the welfare of Nigerians, and find common grounds for building harmonious relations.

Federal Government

Sun Newspaper: $9.6bn debt: Govt opens P&ID’s can of worms

In a new twist in the controversial $9.6 billion judgement granted Process and Industrial Development Limited (P&ID), the Federal Government has instructed its lawyers to seek the leave of the Court of Appeal to appeal against payment of $200 million as a condition for granting a stay of execution.

Minister of Information and Culture, Alhaji Lai Mohammed, disclosed this to newsmen in Abuja yesterday against the backdrop of the government delegation’s recent trip to London, United Kingdom, on the London commercial court’s $9.6 billion judgement in favour of P&ID.

The minister also disclosed how P&ID switched companies in the controversial gas deal with the Ministry of Petroleum Resources. He also outlined how, according to the contract, the gas for the project was expected to come from OML 67, operated by ExxonMobil, and OML 123, operated by Addax, but none of the companies was even aware of the agreement.

Mohammed said: “A contract of this magnitude cannot be valid until it has been vetted by the Office of the  Attorney-General of the Federation and taken to the Federal Executive Council for approval. “None of these was done. The sham contract was also signed in contravention of the Bureau of Public Procurement Act and the Infrastructural Regulatory Commission Procurement Act. “While the MoU for the project was signed in 2009 by P&ID Nigeria Limited and the Ministry of Petroleum Resources, a ‘trick’ clause dubiously inserted in the MoU was curiously activated that allowed British Virgin Island-registered P&ID to replace the original contractual party, P&ID Nigeria Limited, to sign the contract on January 11, 2010. “P&ID, incorporated in BVI, is a shell company that has no history of any business, except the phantom GSPA in Nigeria.

“There was no board resolution approving the assignment of the contractual interest to P&ID BVI. “P&ID never kick-started the construction of the project facility, despite its claim to have invested $40 million in Nigeria. It also never acquired any land to build the gas processing plant. “There is no proof of any financial commitment by P&ID toward the execution and implementation of its own obligation, as stipulated in the 2010 agreement. Similarly, the Central Bank of Nigeria confirmed there is no trace of any funds brought into Nigeria by P&ID.”

Mohammed told newsmen that two directors of P&ID Nigeria have been “convicted of charges of money laundering and economic sabotage. They are Mohammed Kuchazi, a director of P&ID BVI, and Adamu Usman, a director of P&ID Nigeria.” “Suspicious payments were made to Mrs. Grace Taiga, the legal  director in the Ministry of Petroleum Resources. Mrs. Taiga was supposed to ensure that the interest of the country was adequately protected. Of course, the payment, transferred in three tranches, could only have been made in appreciation of the ‘good deed’ done to P&ID by Mrs. Taiga.

“Also, billions of naira, in suspicious cash transfers were made by P&ID. Investigations continue into these transfers,” Mohammed said, adding “…For such a supposedly important project, there was no budgetary provision for the implementation of the GSPA in the budget of the Ministry of Petroleum Resources in 2010, and P&ID did not obtain the necessary licence to deal in petroleum products from the Department of Petroleum Resources, as stipulated by extant laws. “The firm also neither filed tax returns nor paid VAT to the Federal Inland Revenue Service (FIRS) as required by law.”

On the appeal of the $200 million payment, the minister noted: “The Federal Government has a good chance of being successful in its impending appeal, otherwise the Commercial Court would not have allowed the appeal. “Nigeria will be able to demand for a refund of the £250,000 payment to P&ID, where the government wins on the appeal. This fact is being hidden by those who have been spinning the London judgement in their own favour. “On the $200 million payment as a condition for the granting of the stay of execution, Nigeria has instructed its lawyers to seek the leave of the Court of Appeal to appeal against that payment. “Nigerians should remain assured that the Federal Government is taking all necessary steps to strongly avail itself of all defences customarily afforded to sovereign states under the United Kingdom Sovereign Immunity Act, to fight and upturn any enforcement of the award.

“In the words of Mr. President at the 74th session of the UN General Assembly in New York, United States of America, last week, we are giving notice to international criminal groups, by the vigorous prosecution of the P&ID scam, attempting to cheat Nigeria of billions of dollars. “The Federal Government has succeeded in changing the false narrative being peddled by P&ID both within and outside Nigeria by putting across strong evidence that the company is nothing but a fraud. “For those who may still not understand the gravity of the judgement of the Commercial Court in London last week, let me say this: Had we lost our quest for a stay of execution and application to appeal in London last week, P&ID would by now be attempting to seize our assets all over the world. “Remember they boasted before the judgement, that they have started compiling a list of our assets, which they would attach. But now, that’s an empty boast, thanks to the successes recorded in the court of law and the court of public opinion last week.”

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