UK DfID Implicated in Widespread Corruption in Nigeria, Links with Tinubu, Ribadu, Saharareporters, Others Exposed
According to a Report by Elombah.com, The UK Government through the Department for International Development (DfID) has been fingered in a widespread corruption in Nigeria with Links implicating Ibori, Tinubu, Ribadu, Saharareporters, Oceanic Bank etc exposed.
The UK Department for International Development (DfID) which prides itself as sponsoring projects to help Nigeria, a country it says “has a quarter of Africa’s extreme poor, with 100 million of a population of 158 million living on less than £1 a day.”
While It is purportedly working towards “a prosperous and stable Nigeria in arrears of pregnancy complication in women, malnutrition, preventable diseases etc, what is less known however is that this DFID also invests in highly lucrative ventures as private company in Nigeria through a corporate arm called the CDC which makes a lot of profits in Nigeria and in the end actually rakes out more than it puts in.
The CDC Group (formerly the Commonwealth Development Corporation) is a public limited company that is wholly owned by the UK’s Department for International Development (DfID). Created in 1948 to promote private sector development in the UK’s former colonies, CDC was substantially restructured in 2004: instead of investing directly in companies, it now primarily does so indirectly, providing capital to “private equity funds that in turn invest in companies in the poor countries of the world”. CDC now describes itself as a “fund of funds”. At the end of 2009, CDC had assets of £2.5 billion (US$4.0 billion) and investments in 65 funds, which in turn invest in 794 companies in countries, notably in Asia and sub-Saharan Africa.
One example of a company in which DFID throuh CDC invested in was Celtel, formerly known as Vmobile Nigeria. Between 1985 and 2000 Nigeria mysteriously spent more than $5bn digitalising a landline telephone network that ended up with just 300,000 connected users. At the time, Germany’s Siemens had a dominant share of contracts from state owned Nigerian Telecommunications Nitel. Nitel is now defunct; Siemens had to pay fines in Europe for bribing Nigerian officials. But a decade ago, the spread of telephone sped up some African economies and generated a cash windfall for the first generation of telephone investors including Celtel – Celtel sold its Africa network for $3.4 billion in 2005. The Kuwaiti company Zain, which bought the network, sold it on to Bharti Airtel five years later for $9bn. Who are the investors in Celtel and Zain that made such kills in Nigeria telecom industry? Who are the forces behind the death of NITEL?
Elombah.com said it obtained thousands of pages of documents detailing a web of intricate financial dealings between DFID and Nigeria banks, politicians, the judiciary, Police, media gurus, businessmen, government agencies including the EFCC and the ICPC, individuals including Nuhu Ribadu, James Ibori, Wale Tinubu etc, Media organisations including Leadership Newspaper and Saharareporters.
Giving details into the intricate financial dealings, the report commenced with a 2010 Memorandum submitted to the United Kingdom Secretary of State for International Development that raised Concerns over alleged corruption in CDC-backed companies in Nigeria.
The memo was written by NGO’s that incuded Jubilee Debt Campaign, One World Action Platform, Remember Saro-Wiwa, Tax Justice Network, The Corner House, and War on Want on 29 June 2010.
This Memorandum from concerned Non-Governmental Organisations (NGOs) raises suspicions of highly questionable dealings conducted by the CDC Group, a company wholly owned by the UK Government, in its dealings with two private equity firms – Emerging Capital Partners (ECP) and Ethos – that CDC has supported in Nigeria. Both firms have invested in Nigerian companies reported to be “fronts” for the alleged laundering of money said to have been obtained corruptly by the former Governor of Nigeria’s oil rich Delta State, James Ibori. Ibori pleaded guilty and is currently jailed by uk courts for money laundering.
The Memo detailed the following:
Corruption and Northern financial institutions, The CDC Group: Anti-corruption undertakings, Corruption in Nigeria: Of what should CDC have been mindful?, Emerging Capital Partners (ECP): Investments of concern, Allegations relating to directors of ECP-backed companies in Nigeria, Ethos: Investments of concern, Allegations relating to directors of Ethos-backed Oceanic Bank, Due diligence and Political Exposed Persons: James Ibori, Erastus Akingbola, Wale Tinubu, Official responses to the allegations, and Some questions among other items.
The corrosive impacts of corruption on development and on democratic accountability have been widely documented. It would be wholly inaccurate, however, to characterise corruption as a problem solely of the South. Corruption flourishes wherever the powerful are able to undermine the rule of law for personal gain. It is as common in the North as it is in the South. Moreover, much of the corruption that takes place in developing countries is possible only with the complicity – active or passive – of Northern financial institutions, which enable bribes and other forms of corrupt wealth to be laundered through “legitimate” investments.
The former Labour Government recognised the role played by Northern companies and financial institutions in facilitating corruption, and thus made promoting good governance and combating corruption the “centrepiece” of its policy on international development. Nonetheless, the UK has been widely criticised for failing to clamp down on “home grown” corruption overseas. In addition, despite the adoption of anti-corruption procedures by government departments that directly and indirectly support UK business overseas, there is continuing evidence of the Government failing to act where credible evidence of corruption is presented to it.
This Memorandum from concerned Non-Governmental Organisations (NGOs) raises several questions over the due diligence conducted by the CDC Group, a company wholly owned by the UK Government, in its dealings with two private equity firms – Emerging Capital Partners (ECP) and Ethos – that CDC has supported in Nigeria. Both firms have invested in Nigerian companies reported to be “fronts” for the alleged laundering of money said to have been obtained corruptly by the former Governor of Nigeria’s oil rich Delta State, James Ibori. Ibori is currently under investigation by Nigeria’s Economic and Financial Crimes Commission (EFCC) for alleged corruption.
The CDC Group (formerly the Commonwealth Development Corporation) is a public limited company that is wholly owned by the UK’s Department for International Development (DfID). Created in 1948 to promote private sector development in the UK’s former colonies, CDC was substantially restructured in 2004: instead of investing directly in
companies, it now primarily does so indirectly, providing capital to “private equity funds that in turn invest in companies in the poor countries of the world”. CDC now describes itself as a “fund of funds”. At the end of 2009, CDC had assets of ? 2.5 billion (US$4.0 billion) and investments in 65 funds, which in turn invest in 794 companies in 71 countries, notably in Asia and sub-Saharan Africa.
CDC states that “responsible investment practices have always been core to CDC’s mandate”. The funds in which CDC invests are selected because of their managers’ specialist knowledge and understanding of the countries in which they operate. Moreover, they are expected to invest only in accordance with CDC’s Investment Code, which
requires, inter alia, that all businesses in which CDC’s capital is invested comply with all applicable laws and international standards intended to prevent bribery and financial crime.
The aim is “to ensure that portfolio companies improve upon their business practices from the environmental, social and governance perspectives during their investment period.”
As detailed in this Memorandum, serious concerns have emerged over whether or not two CDC-backed private equity funds – Emerging Capital Partners Africa Fund II PCC (ECP Africa Fund II) and Ethos Fund V – complied with CDC’s Investment Code. Both funds have invested in Nigerian companies reported to be “fronts” for the alleged laundering of money said to have been obtained corruptly by the former Governor of Nigeria’s oil rich Delta State,
James Ibori. Nigeria’s Economic and Financial Crimes Commission (EFCC) and law enforcement agencies in the UK have alleged links between these ECP- or Ethos-backed companies and Ibori and/or his associates.
• In October 2007, the Economic and Financial Crimes Commission (EFCC), Nigeria’s prime anti-corruption enforcement agency, named four companies – Notore, OandO, Celtel and Oceanic Bank – in a sworn affidavit as companies through which funds are alleged to have been corruptly moved on behalf of James Ibori, the former Governor of Nigeria’s Delta State. Emerging Capital Partners (ECP) or Ethos has invested in these companies. The affidavit also referred to a fifth ECP-backed company, Intercontinental Bank, as party to an alleged illegal payment.
Ibori has a criminal record in the United Kingdom and is currently under investigation on money laundering charges by London’s Metropolitan Police. In 2007, a UK court froze assets allegedly belonging to him worth $35 million (£21million).
Ibori fled Nigeria in April 2010, following charges brought against him by the EFCC for allegedly selling off Delta State assets illegally to pay off a private loan from Intercontinental Bank while he was still Governor. He is accused of stealing $290 million (£196 million) from Delta State. Ibori’s dealing with both Oceanic Bank (on which Ethos had board representation) and Intercontinental Bank (on which ECP had board representation) are central to the charges. On 13 May 2010, he was arrested in Dubai at the request of the London Metropolitan Police.
• Two directors of ECP-backed companies – Henry Imasekha and Michael Orugbo– were also named by the EFCC as part of its 2007 investigations into Ibori’s alleged “corruption, diversion and misappropriation of public funds, stealing and money laundering”. In EFCC’s October 2007 affidavit, Imasekha was described as “the character moving funds in Celtel, OandO and Notore Chemical Industries.”
Imasekha has also been charged as a co-conspirator in the money-laundering case against Ibori and several of his associates that is currently being heard before the UK. In May 2010, Imasekha was reported to have fled to Ghana, following fresh corruption charges against Ibori.
• The current director of the Ethos-backed Oceanic Bank, Oboden Ibru, and the Bank’s former CEO and director, Cecilia Ibru, are currently facing money-laundering charges in Nigeria. The assets of Cecilia Ibru have been frozen, and Oboden Ibru has been named as her associate. Oboden Ibru is also currently listed as a non-executive director of ECP-backed OandO.
• Intercontinental Bank and Oceanic Bank, in which ECP and Ethos have invested respectively, collapsed in 2009 and had to be bailed out by the Central Bank of Nigeria (CBN) – in effect, by Nigerian citizens to the detriment of the country’s development. CBN sacked the banks’ executive directors and ordered an investigation into a number of non-performing loan portfolios, including unsecured loans to Ibori’s associates. Thomas Gibian, ECP’s current Executive Chair, has reportedly been a board member of Intercontinental since 2007. Ethos similarly has board representation on Oceanic Bank.
The links that Nigeria’s Economic and Financial Crimes Commission (EFCC) and other law enforcement agencies have alleged between ECP- or Ethos-backed companies in Nigeria and associates of James Ibori raise many questions about the due diligence performed by ECP and Ethos and by CDC:
• Did ECP seek advice from the EFCC as to its planned investments in Notore and other companies in Nigeria? If so, when? If so, what was the EFCC’s response? If it did not, why did it not do so?
• Why did ECP chose to invest in OandO some two months after the company had been named by the EFCC in connection with Ibori’s alleged money laundering?
• Why did ECP increase its stake in Notore after the EFCC had similarly named the company?
• Did the companies whose directors were named by the EFCC in its 2007 affidavit concerning money laundering and illegal payment inform their board members, including those representing the CDC-backed investment funds, about these widely publicised allegations and legal actions? If so, what did the board members representing the private equity funds do with this information? If not, how effective are these private equity funds, and the board members representing them, in ensuring good corporate governance, a key goal of CDC?
• What action did ECP and Ethos take to address the governance failures that ultimately led to the 2009 collapse of Intercontinental Bank and Oceanic Bank?
• Was Ethos aware of the size and extent of unsecured loans made by Oceanic Bank to companies associated with Henry Imasekha, despite the EFCC having named him in 2007 as a business associate of Ibori? Did Ethos – which had board representation on Oceanic Bank – question the purpose of such loans?
• Similarly, did ECP’s nominated board member on Intercontinental Bank – ECP’s current Executive Chair Thomas Gibian – know that the bank was making unsecured loans to companies associated with Henry Imasekha, despite the EFCC having named him in 2007 as a business associate of Ibori? If so, what steps did he take to stop the practice?
• When did ECP and Ethos learn of the alleged links between their investee companies in Nigeria and James Ibori?
• If they were unaware of such links, which were widely publicised in Nigeria and elsewhere, what is the extent and relevance of their knowledge of the country in which they invested?
• What steps did ECP or Ethos take to alert the UK or Nigerian authorities of any concerns that such links might have raised?
• Did ECP and Ethos disclose to CDC that companies in which they were investing had been named by the EFCC in its investigations?
• When did CDC become aware of the alleged links between these five companies and Ibori?
• If CDC did not flag up such links, what does this indicate about the quality of its anti-corruption due diligence procedures?
• What losses has CDC incurred in relation to the five cited companies?
• What warranties did the two private equity firms, ECP and Ethos, make to CDC concerning the due diligence they had undertaken relating to the five investee companies and the anti-corruption procedures they had in place? Were these warranties broken? If so, what action is CDC taking?
• CDC conducted its own board level investigation into the alleged links between Ibori and the five investee companies? If it deemed the allegations sufficiently credible to merit such an investigation, why did CDC not inform the Serious Fraud Office of them immediately?
• DfID’s support for CDC is premised on private sector-led economic growth being the way out of poverty. How was this objective realised through CDC’s support for investments in Intercontinental Bank and Oceanic Bank on which CDC-backed funds had board representation? What are the development consequences for poorer Nigerians who are now effectively bailing out these banks after their failure helped to bring the Nigerian economy to the brink of collapse?
TO BE CONTINUED…
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