By Jonathan Ugbal
The Economic and Financial Crimes Commission has opened a fresh probe into how the Cross River State Government spent its Paris Club loan refund.
Bauchi, Delta and Nassarawa states are also being investigated, a detective at the EFCC told the PUNCH.
The state had received NGN11,300,139,741.28 out of the over NGN500 billion approved to be disbursed by President Muhammadu Buhari in the first tranche earlier in 2017 and the EFCC source said that the Nigeria Governors’ Forum (NGF) was said to have taken about five percent of the total money under the pretext that it was being used to pay some financial consultants.
But, the EFCC discovered that when the monies were finally paid into the accounts of the states, some governors allegedly made fresh deductions again under the pretext that they had to pay more consultants at the state level, the PUNCH reports.
“After paying consultants from the NGF account, the states shared the money among themselves. Rather than use these monies in paying salaries and pensions, some of the governors diverted funds by paying more consultants at the state level. So, we are investigating Bauchi, Delta, Nasarawa and Cross River states,” said the source.
The EFCC has also arrested a consultant with Mountain Crest Investment Limited for allegedly receiving USD3 million from the NGF and applied for the forfeiture of NGN1.2 billion allegedly frozen in the accounts of another consultant, Melrose General Services Limited which received payment from the NGF.
“When the Federal Government released NGN522 billion as the first tranche of the Paris Club loan refund, the governors under the aegis of the NGF, paid monies into the accounts of about four consultants.
“Melrose General Services received NGN3.5 billion. We were able to recover NGN220 million while another NGN1.2 billion found in one of the accounts has been frozen. We have applied to the courts for an interim forfeiture order.
“The NGF also paid USD3 million into the account of Mountain Crest. Mountain Crest also transferred $1m to the account of Gosh Project Limited. We arrested the head of the company and he was not even able to explain the services he rendered. We strongly believe that he was a front for one of the governors,” the source said.
Also, USD.5 million has been recovered from Projects while NGN100 million which was invested in treasury bills will also be recovered from the company.
It will be recalled that about a month after the receipt of about NGN7 billion in the second tranche, an Abuja High Court presided by Justice Yusuf Halilu issued an ex-parte order for the freezing of Cross River State Paris and London Club Debit Refund, 101989719, UBA Bank Plc.
This followed allegations that the governor, Senator Ben Ayade preferred payment to family members, friends, and cronies in the guise of settling the fees for consultancy services at the expense of the real consultant progenitor of the Paris-London Club Refund.
The court order was sequel to an affidavit in support of ex-parte originating summons sworn to by Dr. Maurice Ibe, the Chairman and Managing Director of Mauritz Walton Nigeria Ltd, and filed before the court by his Counsel; Alex Marama, Charles Ude, and Kenneth N. Esq where he (Ibe) contested that there is an urgent need for the court to direct the third defendants (United Bank for Africa (UBA) Plc and Zenith Bank Nig. Plc) in the suits CV/2470/17, CV/2536/17, CV/2469/17 and motions M/8777/17, M8780/17, M/8784/17 to, in the interim, stop further disbursement of the money already in or accruing to the respective Paris-London Club Refund accounts domiciled with them which belong to the three states respectively.
The Court ordered the banks to set up an escrow account where the said funds will be deposited pending the hearing and determination of the Motion on Notice.
The Cross River government led by Governor Liyel Imoke had engaged the consultancy firm on the 3rd of November, 2014 to pursue the refund of excess deductions on foreign loans and miscellaneous charges in exchange of 20 percent of any fund recovered according to Ibe.
This meant that Cross River state government owes the sum of $8,050,000 and N1.2bn.
But, the Cross River State Government denied these. The Commissioner for Finance, Mr. Asuquo Ekpenyong Jr. told CrossRiverWatch in an exclusive interview that the state is yet to pay a dime to consultants.
He said that: “It is important to state that some of the information I have seen online; the state has not paid any consultant whatsoever. Cross River State has not paid any consultant for the Paris Club (refund).
“The Paris Club (refund) was used strictly for the payment of salaries, pensions and gratuities.
“If you want a clear breakdown of the expenditure, that can even be given so the claims in the public domain that some consultants have been paid; I can tell you specifically that no consultant has been paid,” Mr Ekpenyong said.
He wondered why the federal government will need a consultant to deal with sub-national governments which are the states.
The Head of Service had earlier in a press conference said that Governor Ayade had directed that the state applies the entire second tranche received into the payment of gratuities, pension and salary arrears.
The Paris Club refund are claims made by states of over-deductions for external debt service between 1995 and 2002 on First Line Charge deductions from the Federation Account Allocation Committee (FAAC).
State governments had submitted claims of over-deductions for external debt servicing between 1995 and 2002 to the federal government.
During the negotiation of debt cancellation in 2006, states were not carried along so when the governors’ forum met, it was agreed that a consultant be engaged to reconcile the account with Central Bank of Nigeria and Federal Government.
President Buhari then directed that claims be subjected to verification by the Debt Management Office and a team was established and given the mandate to scrutinize claims and reconcile with available records.
CrossRiverWatch reliably gathered that Cross River State demanded NGN85.3 billion as refunds.
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