DfIF support for corruption in Nigeria
DfID Watch | 13.03.2008 15:46 | Analysis
The Nigerian Economic and Financial Crimes Commission has recently documented links between agents of UK DfID and a corrupt state governor in the Niger Delta. Capital provided by the UK government has flowed through its private sector arm CDC Group plc to companies which are believed to be owned by Chief Onanefe Ibori whilst he has sent millions to London bank accounts.
CDC Group
There was a time when CDC made its own direct investments using UK aid money to invest in companies in the 'developing' world in a bid to create jobs and improve working conditions. When Neo Labour came to power, Blair hoped to flog it off which resulted in the creation of a government owned plc. Since then it has blundered along as a public-private partnership. It no longer makes direct investments but exists as a so called fund of funds, with net assets of US$4bn. It invests this capital tax-free in private equity funds that specialise in Asia, Latin America and Africa, in a bid to attract other investors such as Citigroup to match its investments. In January it was reported by the FT that the latest attempt to sell it has been delayed by the credit implosion.
http://www.cdcgroup.com/index.asp
Chief Onanefe Ibori
For a period of eight years starting from May 29 1999 to May 2007, the 48-year old James Ibori was governor of Delta State. During this period—and in particular between 2005 and 2006—Ibori illegally transferred close to $35million out of Delta State to the United Kingdom. The transfers were laundered through cronies, relatives and shell companies. He belongs to the ruling People's Democratic Party (PDP). and was a key financial contributor to Umaru Yar'Adua's campaign for the April 2007 presidential election. Due to corruption allegations, a UK court froze his assets ($35 million), in early August 2007. Ibori is facing trial initiated by the Metropolitan Police. On December 12, 2007, Ibori was arrested by the Nigerian Economic and Financial Crimes Commission (EFCC) in Asokoro, Abuja. The charges he faces include theft of public funds, abuse of office, and money laundering. (cheers Wikipedia)
Prior to his arrest by the EFCC his cronies in the state government sought to prevent the states books being scrutinised publically. Since his arrest there have been claims that militias connected to him have been kidnapping oil workers to increase pressure on the national government to drop the charges.
DfID/CDC and Chief Ibori are married via the fund manager ECP Africa. On behalf of the UK taxpayer, CDC have committed $30m to ECPs Africa Fund II. According to them they are an investment fund that "consistently delivers superior returns to investors through disciplined investing and partnering with a broad range of companies and industries across the African continent".
www.ecpinvestments.com
However, ECP are named in an affidavit from an officer of the Nigerian Economic and Financial Crimes Commission, which is investigating what has happened to the oil revenues stolen from the Niger State coffers. These investigations show that Ibori probably used frontmen to move money into and through several companies in Nigeria, including former state enterprises like the fertilizer producer NAFCON. This company, which is now called Notore Chemical Industries, is one of several that ECP have made investments in on behalf of the UK taxpayer.
On the board of Notore, alongside two of ECPs representatives, are Henry Imasekha and Michael Orugbo. Both of these are named by investigators as having been involved in highly suspect transactions, most probably acting as representatives of Chief Ibori.
For example, NAFCON was originally acquired by Orugbo in 2005 for $152m. Yet he only put up $2m of capital. The rest was borrowed from Oceanic Bank International Plc. This is unusual since there is no evidence of any previous banking relationship with Orugbo. What is known is that Oceanic Bank received numerous deposits of cheques from the state government into the bank accounts of Chief Iboris mistress, Udoamaka Okoronkwo. Then between May and December 2006 a total of 1.3bn Nigerian Naira turned up in her London HSBC bank account.
Around the same time ECP paid $46m to Oceanic bank through a shell company called Notore Mauritius and the EFCC found out that ECP were brought into the investment by London solicitors, Arlington Sharmas, which also helped Ibori to steal $20m using an offshore shell company to buy a private Bombardier jet and handled the purchase of Ibori’s property at 42 Great Ground, Shaftbury, Dorset, U.K.
Another payment of Naira 4.4 billion was received by Oceanic Bank part of which was secured from state funds. The route involved Brisbane Limited, which received two Intercontinental Bank Manager cheques for acquisition of 13 per cent of the fertiliser company. Henry Imasekha, owner of Berkeley Group of Companies, also owns Brisbane. When EFCC investigated the origin of the money paid to Brisbane, it found out that in 2001, Imasekha used Bromley Limited to “secure a loan of Naira 2.2 billion from New Nigeria Bank without any collateral or evidence of previous banking relationship with the bank and purchased 10 per cent of Econet Nigeria Limited (now Celtel).”
A few weeks later, however, Delta State Government purchased 5 per cent of Econet (Celtel) shares from Bromley Limited for Naira 2.5 billion via a Standard Trust Bank draft which Imasekha used to pay off the New Nigeria Bank facility. In 2006 when Celtel took over V-mobile, Bromley sold the remaining shares to Celtel and from the proceeds, it acquired 13 per cent of NAFCON.
Strangely enough CDC is also linked to Oceanic Bank through its $30m commitment to the South African Ethos Private Equity Fund V. This fund has itself provided $130m to the bank. Is it the case that these investments by the UK government replaced Iboris capital enabling him to transfer it out of the country?
Another dodgy deal involves a second company in ECPs portfolio ($35m invested); Ocean and Oil Investments which is a holding company that owns 32% of Oando. Chief Ibori is also accused along with other state governors of moving cash, with help again from his school friend Henry Imasekha, from state coffers offshore to be used for investment in Ocean and Oil, registered in the British Virgin Islands. The cash enabled this undercapitalized company to remarket itself as Nigeria's largest indigenous diversified oil and gas company. In February it bought out Shells interests in 2 offshore oil licences in Nigeria.
If the UK government is not guilty of actually facilitating capital flight, at the very least it has a lot to answer for. Although it has outsourced management of these private sector development funds to CDC its cash still has to be used in ways that do not damage prospects for achieving the Millenium Development goals. The funds have been instructed to comply with various standards of corporate social responsibility and it is also mandated that the funds do not invest in crooked companies. The problem is that no appropriate regime has been put in place to monitor the investments that are made. This extends to the fact that the fund manager ECP also invested in Anvil Mining, which was accused of providing support to the army in DRC during the Kilwa massacre.
http://www.raid-uk.org/docs/Kilwa_Trial/Kilwa-anniversary-oct07-EN.pdf
Questions must be asked whether CDCs activites are a good use of taxpayers money for development. Or whether they are just assisting in an asset grab of natural resources and the global marketing of the UK financial services sector.
There was a time when CDC made its own direct investments using UK aid money to invest in companies in the 'developing' world in a bid to create jobs and improve working conditions. When Neo Labour came to power, Blair hoped to flog it off which resulted in the creation of a government owned plc. Since then it has blundered along as a public-private partnership. It no longer makes direct investments but exists as a so called fund of funds, with net assets of US$4bn. It invests this capital tax-free in private equity funds that specialise in Asia, Latin America and Africa, in a bid to attract other investors such as Citigroup to match its investments. In January it was reported by the FT that the latest attempt to sell it has been delayed by the credit implosion.
http://www.cdcgroup.com/index.asp Chief Onanefe Ibori
For a period of eight years starting from May 29 1999 to May 2007, the 48-year old James Ibori was governor of Delta State. During this period—and in particular between 2005 and 2006—Ibori illegally transferred close to $35million out of Delta State to the United Kingdom. The transfers were laundered through cronies, relatives and shell companies. He belongs to the ruling People's Democratic Party (PDP). and was a key financial contributor to Umaru Yar'Adua's campaign for the April 2007 presidential election. Due to corruption allegations, a UK court froze his assets ($35 million), in early August 2007. Ibori is facing trial initiated by the Metropolitan Police. On December 12, 2007, Ibori was arrested by the Nigerian Economic and Financial Crimes Commission (EFCC) in Asokoro, Abuja. The charges he faces include theft of public funds, abuse of office, and money laundering. (cheers Wikipedia)
Prior to his arrest by the EFCC his cronies in the state government sought to prevent the states books being scrutinised publically. Since his arrest there have been claims that militias connected to him have been kidnapping oil workers to increase pressure on the national government to drop the charges.
DfID/CDC and Chief Ibori are married via the fund manager ECP Africa. On behalf of the UK taxpayer, CDC have committed $30m to ECPs Africa Fund II. According to them they are an investment fund that "consistently delivers superior returns to investors through disciplined investing and partnering with a broad range of companies and industries across the African continent".
www.ecpinvestments.com
However, ECP are named in an affidavit from an officer of the Nigerian Economic and Financial Crimes Commission, which is investigating what has happened to the oil revenues stolen from the Niger State coffers. These investigations show that Ibori probably used frontmen to move money into and through several companies in Nigeria, including former state enterprises like the fertilizer producer NAFCON. This company, which is now called Notore Chemical Industries, is one of several that ECP have made investments in on behalf of the UK taxpayer.
On the board of Notore, alongside two of ECPs representatives, are Henry Imasekha and Michael Orugbo. Both of these are named by investigators as having been involved in highly suspect transactions, most probably acting as representatives of Chief Ibori.
For example, NAFCON was originally acquired by Orugbo in 2005 for $152m. Yet he only put up $2m of capital. The rest was borrowed from Oceanic Bank International Plc. This is unusual since there is no evidence of any previous banking relationship with Orugbo. What is known is that Oceanic Bank received numerous deposits of cheques from the state government into the bank accounts of Chief Iboris mistress, Udoamaka Okoronkwo. Then between May and December 2006 a total of 1.3bn Nigerian Naira turned up in her London HSBC bank account.
Around the same time ECP paid $46m to Oceanic bank through a shell company called Notore Mauritius and the EFCC found out that ECP were brought into the investment by London solicitors, Arlington Sharmas, which also helped Ibori to steal $20m using an offshore shell company to buy a private Bombardier jet and handled the purchase of Ibori’s property at 42 Great Ground, Shaftbury, Dorset, U.K.
Another payment of Naira 4.4 billion was received by Oceanic Bank part of which was secured from state funds. The route involved Brisbane Limited, which received two Intercontinental Bank Manager cheques for acquisition of 13 per cent of the fertiliser company. Henry Imasekha, owner of Berkeley Group of Companies, also owns Brisbane. When EFCC investigated the origin of the money paid to Brisbane, it found out that in 2001, Imasekha used Bromley Limited to “secure a loan of Naira 2.2 billion from New Nigeria Bank without any collateral or evidence of previous banking relationship with the bank and purchased 10 per cent of Econet Nigeria Limited (now Celtel).”
A few weeks later, however, Delta State Government purchased 5 per cent of Econet (Celtel) shares from Bromley Limited for Naira 2.5 billion via a Standard Trust Bank draft which Imasekha used to pay off the New Nigeria Bank facility. In 2006 when Celtel took over V-mobile, Bromley sold the remaining shares to Celtel and from the proceeds, it acquired 13 per cent of NAFCON.
Strangely enough CDC is also linked to Oceanic Bank through its $30m commitment to the South African Ethos Private Equity Fund V. This fund has itself provided $130m to the bank. Is it the case that these investments by the UK government replaced Iboris capital enabling him to transfer it out of the country?
Another dodgy deal involves a second company in ECPs portfolio ($35m invested); Ocean and Oil Investments which is a holding company that owns 32% of Oando. Chief Ibori is also accused along with other state governors of moving cash, with help again from his school friend Henry Imasekha, from state coffers offshore to be used for investment in Ocean and Oil, registered in the British Virgin Islands. The cash enabled this undercapitalized company to remarket itself as Nigeria's largest indigenous diversified oil and gas company. In February it bought out Shells interests in 2 offshore oil licences in Nigeria.
If the UK government is not guilty of actually facilitating capital flight, at the very least it has a lot to answer for. Although it has outsourced management of these private sector development funds to CDC its cash still has to be used in ways that do not damage prospects for achieving the Millenium Development goals. The funds have been instructed to comply with various standards of corporate social responsibility and it is also mandated that the funds do not invest in crooked companies. The problem is that no appropriate regime has been put in place to monitor the investments that are made. This extends to the fact that the fund manager ECP also invested in Anvil Mining, which was accused of providing support to the army in DRC during the Kilwa massacre.
http://www.raid-uk.org/docs/Kilwa_Trial/Kilwa-anniversary-oct07-EN.pdf Questions must be asked whether CDCs activites are a good use of taxpayers money for development. Or whether they are just assisting in an asset grab of natural resources and the global marketing of the UK financial services sector.
DfID Watch