Friday, January 13, 2012 / From the Archives
AN ADDRESS PRESENTED BY HON. JUSTICE EDET ROBERT NKOP (Rtd.) AT THE SUBMISSION OF THE REPORT ON THE TRIBUNAL OF INQUIRY ON AFRICAN PETROLEUM PLC AT ABUJA ON FEBRUARY 2003.
It is to be recalled that this Tribunal was inaugurated on the 8th day of August 2002. Its assignment was to investigate allegations of mismanagement levelled against the immediate past management of AP Plc, led by Alhaji Umar Abba Gana. The terms of reference are in the report now about to be submitted.
After a thorough private investigation, the Tribunal went into public sittings. From our findings, there were unprecedented and cleverly contrived concealment of over N25 billion debts by the immediate past management of AP Plc, before privatisation. Those persons or institutions whose various acts of omission or commission contributed to the concealment include, inter alia;
a. The former management staff of AP PLC;
b. The Financial Institutions;
c. The Officials of NNPC/PPMC; and
d. The Bureau of Public Enterprises.
Highlighted below is the summary of their involvement.
a. Former Management Team of AP PLC and
b. Banks and Other Financial Institutions
The Immediate past management of AP PLC was led by Alhaji Umar Abba Gana, who was its Managing Director. The said administration engaged itself in unwanted and criminal borrowings from various financial institutions in the form of Commercial Papers and Banker’s Acceptances, far in excess of what could reasonably have been needed for normal operations of the company. He was not alone in this nefarious venture. He worked with a clique which comprised Engr. Pius C. Idigo, Executive Director (Marketing), Mr. M. O. Ajayi, Manager, Finance and Accounts; Mr. A. E. Gbinigie, Manager, Financial Accounts; Mr. M. W. Lawson-Jack, Ag. Manager of Finance and Accounts, Mr A. A. Osibanjo, Chief Internal Auditor and Mr. Adebayo Adeniji-Fashola, Secretary and Legal Adviser to AP PLC.
The above officials went into massive borrowings from the various Banks without approvals from AP PLC’s Board of Directors as required by Article 81 of the Memorandum and Articles of Association of AP PLC. The banks, on their part, did, not insist on mandatory Board Resolutions before granting the loans. Had they done this, it would have acted as a check on the excessive borrowings, and would have punctured the concealment plot by the past management. Some of the banks even went beyond this and through active overt acts, assisted the corrupt officials of AP PLC’s management to conceal AP’s indebtedness. A case in point is the Equitorial Trust Bank that collaborated with the past management of AP PLC and refused to disclose the existence of N200 million worth of Banker’s Acceptance in a letter written by it to the External Auditor; Messrs Osindero, Oni and Lasebikan, but in a similar letter written by it to AP PLC, the said Banker’s Acceptance was disclosed. In the course of our investigations, some of the commercial banks appreciated and owned up their mistakes and showed remorse.
Twelve of such banks had since gone to AP PLC and negotiated terms of repayment of the outstanding debts. Altogether, AP PLC has got a reprieve through waivers of about N3bn (Three Billion Naira) from the various banks. The Tribunal commends those banks for maturity and understanding.
c. Officials of NNPC/PPMC
Another source of indebtedness was alleged debts payable by AP PLC to NNPC/PPMC for lifting’s of Products. The Tribunal found as a matter of law and policy that the Managing Director of AP PLC and two other Executive Directors on the Board of AP PLC were always nominees of NNPC who in almost all cases, were seconded from NNPC. It was therefore difficult to draw any clear and distinctive line between NNPC and AP PLC in their operations. That was the situation during Alhaji Umar Abba Gana’s tenure. AP PLC, given the above scenario, was run like an appendage of NNPC. That was why PPMC, a subsidiary to NNPC, saw no need to reconcile its accounts with AP PLC for years. It was only after privatisation, that PPMC tried to effect some accounts reconciliation with AP PLC but there were no records in the books of AP for such exercise because such records were destroyed by Alhaji Umar Abba Gana and his clique, before handing over to the new core investors - Sadiq Petroleum Nigeria Ltd in the year 2001. It is necessary to add that in spite of the huge amount said to be owed by AP to NNPC, PPMC continued to supply products to AP. This, in our view, could only have been done because of the relationship highlighted above, and for what the past AP’s management and NNPC/ PPMC top personnel could gain from the continued liftings. However, based on the evidence before us, the Tribunal restated what it considered the true indebtedness of AP PLC as at the time of Privatisation and came to the conclusion, that the indebtedness was only N787.16 million but not N11.5 Billion as alleged by PPMC.
The Tribunal also found as a fact that there was definitely an over-statement in the declared PPMC/AP PLC indebtedness to the tune of N9, 100,400,646.57. the Tribunal has therefore recommended that the Federal Government should direct NNPC/PPMC to write off the said sum of N9, 100,400,646.57 (Nine billion, one hundred million, four hundred thousand, six hundred and forty-six Naira, fifty-seven kobo) because it did not exist.
Important Reports Click to Download:
KPMG Interim Report on Forensic review of NNPC - 2010
IMF Position Paper on Petroleum Subsidies Feb 2010