Capital Oil Refutes Allegations of Subsidy Fraud

Reconciliation of Fuel Subsidy Payments headed by the Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig Imoukhuede.

In a statement issued by the company’s Managing Director, Mr. Ifeanyi Ubah, it vehemently denied claims by the committee that it collected subsidy payments for products for which no proof of mother-vessels were found in locations claimed at the time of trans-shipments.

The company also faulted media reports that Ubah was declared wanted by the Special Fraud Unit (SFU) of the Nigeria Police Force, insisting that at no time was Ubah declared wanted nor has the police ever invited him and he failed to show up.

The company said it decided to break its silence after series of reports that labelled it as an “oil thief”, even when no judicial pronouncement had been made against it, as keeping silent on the reports and allegations might be mistaken for admission of guilt.

According to Ubah, his company’s current travails started after a petition dated September 25, 2012, by the presidential committee requested the assistance of the SFU to investigate subsidy claims by Capital Oil and Gas Industries.

The committee, he said, claimed that it was carrying out a 100 per cent verification of shore tank certificates and sales proceeds for all 2011 premium motor spirit (PMS) imports under the Petroleum Support Fund (PSF) scheme.

The oil marketer said the committee also claimed that it had engaged the services of auditors, Ernst & Young, to conduct a field examination of oil marketing and trading companies using an approved audit framework.

Ubah said based on the invitation, coupled with the committee’s alleged irregularities in “several of our transactions, our MD, Ubah, on October 9, honoured the invitation by the SFU, but ended up being detained till October 19”.

In his first public comment since the invitation by the SFU, he said the committee was wrong to have accused the firm of collecting subsidy payments for which proof of mother vessels were not found in a location claimed at the time of trans-shipment, even after all the relevant documents regarding the importation of the cargoes, including mother and daughter vessels documentation and the bills of lading were made available to the committee.

He said: “We also provided the committee with the evidence of opening Forms “M” duly approved by the government appointed agent – COTECNA; establishment of letters of credit by our banker, Access Bank; appointment of an inspection agent by Access Bank to monitor all operations from loading of the product from the mother vessel to the discharge at the jetty; and monitoring of the truck-out from the depot.

“It should be noted at this point that our bank, Access Bank, performed all the functions as well as financed over 70 per cent of our importation. Aig-Imoukhuede is also the managing director and major shareholder of Access Bank.

“He (Aig-Imoukhuede) also has vast interests in many companies that have benefited from the petroleum subsidy scheme. Such companies are also among our very strong competitors.”

The oil-marketing company stated that the auditor’s report in many respects vindicated it from the false claims of the committee that it was among the oil-marketing and trading companies that collected subsidy payments without importing any PMS.

“We were vindicated to the extent that the auditors confirmed that at least 97 per cent of the imported PMS was also trucked to and delivered at many destinations in the country,” it said.

“The auditors,” the company added, “also found from the information they obtained from government agencies (DPR, the Navy, NPA and NIMASA) that there was evidence from these agencies showing that the vessels mentioned in respect of the transactions 1 to 26 vessels arrived Nigeria and discharged products.”

Ubah noted that the only contention was that the auditors claimed that they were yet to get outstanding data from the Navy and NIMASA and could not verify these transactions.

He further alleged that Aig-Imoukhuede had used his position as the chairman of the presidential committee to perpetuate unethical atrocities, by charging Capital Oil N300 million every month, while at the same time frustrating the company’s operations so as to render it insolvent and to take it over.

According to Ubah, another case against it was a petition by the Managing Director of Coscharis, Mr. Cosmas Maduka, who obtained a loan of $180 million from Access Bank to finance the importation of petrol by Capital Oil.
He added that the petition alleged that 10 letters of credit were opened and that of the 10 expected cargoes, only six were delivered.

Disputing Maduka’s assertion in the petition, Ubah said that the subsidy on the alleged diverted cargoes was paid into Coascharis’ account with Access Bank.

Throwing more light on this, the Capital Oil boss said Access Bank collected subsidy payments meant for Capital Oil on the same four cargoes, which Coscharis claimed were not delivered.

“We paid Coscharis N1.9 billion and Maduka also used his position in Access Bank to unlawfully transfer over N4.9 billion from a joint venture account opened by Capital Oil and Gas and Coscharis with Access Bank and quickly transferred same to the account of one of his companies, Sure Comfort Ltd,” he said.

Insisting that the game plan was to starve his company of funds and take it over, Ubah rhetorically asked, “Why is Maduka, a director of Access Bank (financiers of Capital Oil and Gas Industries Ltd) and the chairman of Access Bank Credit Committee, personally financing importation of cargoes by Capital Oil and Gas Industries?”

He queried why Aig-Imoukhuede had deliberately claimed that his committee could not verify documents presented by Capital Oil even though his bank had established the letters of credit, appointed an inspection agent to monitor all operations from loading of the product from the mother vessel to the discharge at the jetty, and also monitored the truck-out from the depot.

Ubah also queried why Capital Oil was not among the companies invited by the committee to clarify issues raised in its findings, adding that the Aig-Imoukhuede committee refused to clear his company, notwithstanding that Ernst & Young had verified the same documents presented by the company, which the subsidy committee claimed it could not verify.

Ubah maintained that “Aig-Imoukhuede and Cosmas Maduka have found out through their business liaison with Capital Oil that the company is doing well, having carried out a transaction worth about $280 million, and are therefore now plotting to take over the company.”


About kemdii

a poet a writer a graduate of history and presently running agraduate programe in diplomacy

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