President Muhammadu Buhari has approved the payment of a controversial $418million in Paris Club refund-related judgment debts to six creditors, ignoring the Nigerian governors’ objection to the legitimacy of the claims.

PREMIUM TIMES on Tuesday exclusively obtained a finance ministry’s correspondence asking the Debt Management Office (DMO) to commence issuance of promissory notes to the creditors, the means of payment approved by Mr Buhari.

The development is against the governors’ protest and calls for a forensic audit into the suspicious claims of the creditors.

The debts had accrued from court judgments awarding the creditors, as “consultants” and “contractors,” various sums of money amounting to about $418million.

Some of the creditors claimed to have earned their shares of the money through consultancy services of helping state and local governments to recover funds over-deducted by the federal government from their allocations between 1995 and 2002 to service the London Club and Paris Club loans.

Others were purportedly engaged to execute certain projects in all the 774 local governments in anticipation of being paid from the Paris Club refunds. The Association of Local Governments of Nigeria (ALGON) said the contracts were largely unexecuted.

PREMIUM TIMES had in series of exclusive reports exposed wide-ranging legitimacy issues, including non-execution of agreed contracts and backdoor deals raised against the indebtedness from various quarters.

The Kayode Fayemi-led Nigerian Governors’ Forum (NGF), ALGON, and the Economic and Financial Crimes Commission (EFCC) had in separate correspondences to relevant authorities, expressed concerns about the indebtedness.

The Ekiti State governor, since taking over as the NGF chairperson in 2019, has been seeking a review of the humongous indebtedness calling for a forensic audit into the agreements leading to the court judgments.

In February, the National Executive Council (NEC), led by Vice-President Yemi Osinbajo and has the 36 states governors, and some other top federal government officials, as members, also threw its weight behind the NGF’s demand for a suspension of the planned payments for a forensic audit to be done.

Subsequently, in April, the NGF, through its lawyer, Femi Falana, a Senior Advocate of Nigeria, wrote the finance minister, Zainab Ahmed, asking her to suspend moves to begin paying the money as it was set to file appeals against the judgments.

Presidential approval despite concerns

The fresh document obtained by this newspaper on Tuesday shows that Mr Buhari has shoved the issues raised, by authorising the Federal Ministry of Finance to issue promissory notes to the creditors.

The promissory notes, as revealed in our previous reports, are to be funded through deductions from states and local governments’ monthly allocations over a period of 10 years.

Citing Mr Buhari’s approval letter dated January 11, 2021, the letter signed by the Permanent Secretary, Federal Ministry of Finance, Aliyu Ahmed, obtained by PREMIUM TIMES, asked the Debt Management Office (DMO) to issue the promissory notes to the creditors.

The letter dated and received by the DMO on August 12, is titled, ‘Authorisation to issue promissory notes in favour of Category ‘A’ judgment creditors’.

“I write to convey the approval of the Honourable Minister of Finance, Budget and National Planning (HMFBNP) for the Debt Management Office (DMO) to issue Promissory Notes in favour of Category “A” judgment creditors in the reconciled list of judgment debts in compliance with various court orders and judgments and the approval of Mr. President. ‘ENT

“You will recall that Mr. President had in a letter dated 11 January 2021, approved the issuance of Promissory Notes to liquidate various categories of judgment debts to wit: (Categories A, B1, B2, and C) against Federal Ministries, Departments & Agencies (MDAs); States and Local Governments Councils. (Please find copy attached as Annex A),” the letter read in part.

Creditors

Our previous reports had revealed the list of creditors in the Category A judgment creditors list to comprise six persons and entities being owed a total of $418,953,670.59.

The beneficiaries include a former member of the House of Representatives, politician and lawyer, Ned Nwoko, who is laying claim to $142,028,941 via a consent judgment he obtained from the Federal High Court in Abuja in the suit marked FHC/ABJ/CS/148/2017.

Three beneficiaries laying claim to $143,463,577.76 via a judgment of the Federal Capital Territory (FCT) High Court in the suit marked FCT/HC/CV/2129/2014 are: Riok Nigeria Ltd, Orji Nwafor Orizu, and Olaitan Bello.

From the total money, Riok Nigeria Limited has a share of $142,028,941.95 (about N54 billion), Mr Nwafor is entitled to $1,219,440.45 and Mr Bello has a share of $215,159.36.

The claimant with the singular lion share is Ted Iseghoghi Edwards, who is laying claim to $159,000,000 through a judgment he obtained from the FCT High Court in suit number FCT/CV/1545/2015.

A firm, Panic Alert Security System Limited, owned by George Uboh, is also laying claim to $47,831,920 based on another “consent judgment” it obtained in suit number FHC/ABJ/CS/123/2018, which was filed as recently as 2018.

How creditors will get promissory notes

The finance ministry’s letter to the DMO seen by this newspaper detailed how the creditors would receive their promissory notes.

The ministry’s permanent secretary who signed the letter said, for Mr Nwoko, who had obtained an order of mandamus issued by the court, the promissory notes due to him and one Gregory Lar “should be delivered to them directly”.

For Riok Nigeria Ltd, Orji Nwafor Orizu and Olaitan Bello, the letter stipulated that their promissory notes “should be delivered to the Chief Registrar of the High Court of the Federal Capital Territory Abuja”.

It added that promissory note due to Ted Iseghohi Edwards, Panic Alert Security System, “should be delivered to the Deputy Chief Registrar of the Federal High Court, Abuja in line with the order of court”.

Condition

As a condition for issuing promissory notes, the beneficiaries would sign an agreement to receive promissory notes in lieu of cash, says the letter by Mr Ahmed, the finance ministry’s permanent secretary.

“It is to be noted that,” the letter reads, partly, that as advised by Mr Malami in his letter, “all the beneficiaries of the Promissory Notes, as a condition precedent, shall execute appropriate Acceptance and Undertaking that they accept the Promissory Notes in lieu of cash payment as full and final settlement of their claims, thereby discharging the FGN (Federal Government of Nigeria) from all liabilities regarding the subject of their claims”.

How controversies started

The monetary claims of the creditors, like the court proceedings validating them, are dogged by many controversies which PREMIUM TIMES’ previous reports have revealed.

The foundation of the humongous debts appeared to have been laid by ALGON in 2013.

Then, the leadership of ALGON, acting in concert with some of the claimants, went to court to challenge what they described as the federal government’s unilateral deduction of the funds from the federation account to service the foreign debts without the consent of the third tier of governments in the country.

Curiously, the 774 local governments, coordinated by ALGON, filed the suit as the principal plaintiffs and joined the “consultants” and “contractors” as co-plaintiffs, for their roles providing legal and consultancy services to help secure the Paris Club refund.

Between 2013 and 2018, a series of similar suits relating to the Paris and London clubs’ money were filed in court with ALGON and past leaderships of the NGF giving tacit support to the “contractors” and “consultants”.

At the end of the day, some of the cases were feebly defended, while others were consented to by the defendants, including past NGF leaderships and ALGON.

With little or no opposition, judgments later began to fly around with huge awards in millions of dollars issued by the courts in favour of the claimants.

Red flags against payments

In a report of an investigation carried out at the behest of the AGF, the EFCC would later state that at least a part of the debts is unjustifiable.

Mr Malami, in his letter dated July 17, 2020, sent to the President’s Chief of Staff, Ibrahim Gambari, acknowledged the finding by the EFCC questioning the legitimacy of the $159 million being claimed by Mr Iseghoghi-Edwards, one of the six judgment creditors.

He said in the letter that the “recent EFCC report shows” that Mr Iseghoghi-Edwards “is not entitled to this sum”.

Aside from EFCC report, Mr Malami also received two letters authored by successive presidents of ALGON in 2018 and 2019 protesting the judgment claims credited to Ted Iseghoghi-Edwards and RIOK Nigeria Limited.

In the letter dated September 10, 2018, with reference number, ALGON/NP/FMJ/VOL1/001/18, and which was received by the AGF office on September 13, 2018, the then ALGON President, Gambo Kagara, informed Mr Malami that neither Mr Iseghoghi-Edwards nor his law firm, worked for the association as claimed by them in the recovery of the refund of the over-deducted Paris Club loans to be entitled to any payment.

Mr Kagara’s letter, which was a reply to an earlier inquiry by Mr Malami, explained that ALGON actually engaged the services of some lawyers that represented the association and by extension its members during the litigation process that ended in favour of the association.

But it added, “A perusal of all the relevant court records will show that neither Dr Ted Edward nor Edwards and Partners were counsel on records throughout the entire court proceedings.”

Concerning RIOK, which is laying claim to a court judgment awarding it over $142million as its share of the Paris Club refunds, Mr Kagara stated that there was no evidence the firm executed the contracts it was awarded by ALGON in December 2013 to be entitled to the monetary claim.

His letter to Mr Malami reads in part, “ALGON via an award letter dated December 17, 2013, awarded a contract to RIOK Nigeria Limited for the provision of boreholes and other water reticulating apparatus in all the 774 Local Governments and Area Councils in Nigeria.

“This was subsequently followed by a Memorandum of Understanding (MOU) executed by both parties.

“The entire contract sum was $318,807,950,596, to be funded from the Paris Club refund funds accruable to Local Governments.

“From ALGON’s records, there is no evidence that RIOK has executed the required job.”

It added that there was also “no communication from the company informing ALGON of the job execution/completion.”

“No job inspection has been carried out by ALGON and RIOK has not formally handed over any site of job completion; no certification of job completion has been issued to RIOK; consequently, the association categorically denies execution of the work by RIOK to justify any claims for payment,” the letter added.

ALGON, under a new administration led by Kolade Alabi as president, wrote another letter dated October 8, 2019, to Mr Malami, restating the association’s position on the judgment debts as canvassed in Mr Kagara’s September 10, 2018 correspondence.

In another outlandish case, George Uboh, owner of Panic Alert Security System Limited, laying claim to $47.8 million, revealed that his entitlement to the money accrued from helping NGF to pressure a sitting judge to reverse a $478 million judgment.

He stated, “I pressured a sitting judge to reverse a $478 Million USD judgment awarded to contractors that were not a party to the underlying suit.

“I have sacrificed enough for my country way more than you have. After saving the NGF $478 million USD and being detained, don’t I deserve 10 per cent ($47.8M); or is it a case of the pidgin parlance ‘monkey work, baboon chop’.”

Gambari, Malami, Zainab Ahmed’s desperate push

Our reports revealed how three influential officials of the President’s Chief of Staff, Ibrahim Gambari, the AGF, Mr Malami, and the Minister of Finance, Zainab Ahmed, have been spearheading the desperate moves to pay the creditors in disregard for all the red flags.

Of the three, Mr Malami is the only one that has been in the picture since 2016 when the conversations among top echelons of the Buhari administration about payment of government’s judgment debts started.

Mrs Ahmed only became involved following her appointment as finance minister after her predecessor, Kemi Adeosun, resigned in September 2018 in the wake of her NYSC certificate forgery scandal.

On his part, Mr Gambari got involved in the matter following his appointment in May 2020 after the death of his predecessor, Abba Kyari, who died from COVID-19 complications in April 2020.

Mr Malami had in response to our reports denied any wrongdoing.

But he has refused to answer the 10 questions raised by PREMIUM TIMES pointing out gaps in the statement issued in defence of his action.