The
controversy over the control of one of Nigeria’s most lucrative oil blocks is
set to take a new turn as the parliamentary panel that investigates the latest
Malabu oil deal begins to prepare its report on the matter. Fresh evidence has
explained why Jonathan administration negotiated the transfer of over $1
billion to the oil firm of former petroleum minister Dan Etete to the detriment
of other claimants of the company.
A House of Representatives committee is currently preparing a
preliminary report of its investigation over the “Transaction Involving the
Federal Government, Shell/Agip Companies and Malabu Oil & Gas Limited in
Respect of Oil Block OPL 245”. The committee was set up earlier this year
following an outcry over the transfer of an offshore oil block from an
indigenous firm, Malabu Oil & Gas, to multinational oil companies, Shell
and Agip, at the cost of $1,092,040,000 (about N157 billion).
The Federal
Government had negotiated the deal in April last year that saw the oil majors
(Agip in particular) paying the money to the government which in turn
transferred it to Malabu in return of its Oil Prospecting Licence (known as
Block OPL 245). Parliamentary sources told Sunday Trust yesterday that the
committee would most likely call for the abrogation of the deal. But even if it
does not, its findings would make uncomfortable reading to many key players
involved in the deal.
Evidence
at the committee’s public hearing alone has exposed Shell and Agip to the
possibility of facing sanctions in Britain, Italy and the United States, Sunday
Trust investigation reveals.
A
global anti-graft group, Global Witness, which has been following the case, has
said that evidence showing the transfer of the money from the oil majors,
through the government, to Malabu suggests that the deal has breached
anti-corruption legislations in Europe and the United States.
Both
Shell and Agip have denied ever knowing that the money has been transferred to
Malabu, insisting that they had only paid the money to the Nigerian government.
But
Minister of Justice and Attorney General of the Federation Mohammed Adoke told
the parliamentary committee that the money had indeed been transferred to
Malabu.
The
parliamentary probe is just a tiny aspect of the complex issues surrounding the
deal. And the deal itself is a little portion of the intricacies concerning the
ownership of Malabu and the control of oil block OPL 245, which contains up to
9.23 billion barrels of oil, according to industry experts—many of whom have
even rated it as Nigeria’s richest oilfield.
Murky business and intrigues
The
story of Malabu and its Block OPL 245 is the story of 14 years of murky oil
business and political intrigues beginning from the regimes of late Head of
State General Sani Abacha and General Abdulsalam Abubakar, right through
Olusegun Obasanjo’s presidency, to the current administration of Goodluck
Jonathan. And it seems to paint a picture of corruption and arbitrariness that
appear to mark all the regimes.
Malabu
Oil & Gas Limited, according to Corporate Affairs Commission’s documents,
was incorporated on 24 April 1998 by three people, Mohammed Sani, Hindu Hassan
and Kweku Amafegha, with 20 million ordinary shares. Mohammed, the records
show, controlled 10 million shares (or 50 per cent of the total), Kweku six
million (30 per cent) and Hindu four million shares (20 per cent). In reality
these three names merely masked the true ownership of the company; and the
documents officially marked the commencement of the murkiness of the business
itself.
An
interim report of the Economic and Financial Crimes Commission (EFCC), obtained
by Sunday Trust, says that the company was actually owned jointly by former
head of state General Abacha’s son Mohammed Sani Abacha (who mysteriously left
out his surname), the then oil minister Dan Etete (represented by Kweku) and
Wakilin Adamawa Ambassador Hassan Adamu (represented by his wife Hindu).
(See the full text of the EFCC’s Interim Report on page 8)
Sources
said the name of the company itself, Malabu, was suggested by Hassan Adamu.
Malabu is the name of a district in Adamawa Emirate where Hassan Adamu is a
powerful title holder.
Five
days after the company’s incorporation, it was granted oil prospecting licences
for Offshore Oil and Gas Concessions Blocks OPL 245 and OPL 214. Apparently it
was a deal between the petroleum minister Etete, the head of state’s son
Mohammed and the head of state’s friend and envoy Hassan Adamu to secure oil
blocks for themselves.
But
less than two months after getting the oil blocks General Abacha died, sending
all the three first in disarray before, according to Mohammed, Etete quickly
recovered and began a plot to take total control of the company.
Sources
said he first allegedly edged out Mohammed Abacha when the later was struggling
with the authorities after the death of his father following allegations of
corruption against him.
In
a presentation his lawyers made to the parliamentary hearing, Mohammed alleged
that he was ousted out of the company through forgery and other scams allegedly
perpetrated by Etete.
“We
have discovered that Our Client is no longer reflected as either a shareholder
or a Director in the MOGL (Malabu Oil and Gas Limited) documents at the
Corporate Affairs Commission (CAC), notwithstanding the fact that he has never
transferred his MOGL shares to any person or entity,” the lawyers said.
“Furthermore,
we discovered that various Share Transfer documents have been forged,
illegitimate corporate documents purporting to alter the equity structure of
MOGL have been filed, improper shareholder and Board resolutions purporting to
make unauthorised changes to the constitution of the MOGL Board of Directors
have been made,” they added.
A
source close to Hassan Adamu, the other shareholder, told Sunday Trust that
when the former envoy realised the problems arising from the struggle for the
control of the company, he became apprehensive.
They
said at that time Hassan Adamu himself was falling on hard times. This,
combined with the problems in the company, made him to think of disposing his
own shares for a relatively low price.
They
said it was at that time that he reportedly sold his shares to Pecos Energy Limited,
owned by associates of former vice president Atiku Abubakar.
It
was alleged that the company was owned by Atiku but both his spokesman Garba
Shehu and the consultants who represented the company at the public hearing
denied this.
Lawal
Abba, the head of the consultants, told Sunday Trust on Friday that Atiku’s
name was mentioned because two of the company’s owners, Otunba Fashawe and
Adamu Yaro, are his close associates.
“You
have to remember that Fashawe is a friend to both Atiku and Obasanjo before he
fell out with Obasanjo. And Adamu Yaro is a friend to both Atiku and
Babangida,” he said.
He
confirmed that Hassan Adamu had indeed sold his shares to Pecos “a long time
ago”.
The
shares were sold at a give-away price, said a source, because at that time the
company was facing crisis and was devoid of lucrative deals.
Whatever
the case, Pecos alleged that they too were later edged out of Malabu by Etete.
They
have now formed a team with Mohammed Abacha, fighting to recover what they
called 70 per cent of the Malabu’s proceeds. They are demanding 70 per cent of
the $1,092,040,000 given to Malabu in exchange of its oil block (OPL 245).
They
alleged that their signatures were forged to alter the composition of Malabu
ownership.
“We
were informed of the forgery of our clients’ shareholding interest in Malabu
Oil and Gas Limited by some individuals” their consultants told the
parliamentary hearing.
“We
also want to observe that there were series of court cases and petition in
respect of this forgery,” they added.
However,
they said, during their meetings with minister of justice over the matter, “he
instructed that all legal actions pending be withdrawn and no fresh legal
actions should be taken in Nigeria or abroad in order to facilitate amicable
settlement of the matter which we persuaded our clients to comply (with).
“While
these approaches were still on going, a Settlement Agreement was executed
between the Federal Government of Nigeria, Etete and Shell/Agip, precluding the
70% shareholders,” they said.
But
the minister told the committee that he was not told of any dispute within
Malabu before the Settlement Agreement was signed; and that he advised those
who met him later to go and settle their dispute internally.
The controversial deal
The
agreement they were talking about is actually a set of agreements between on
the one hand the Federal Government and Malabu, and on the other between the
Federal Government and Shell/Agip — the outcome of both of which was the
transfer of the oil block (OPL 245) from Malabu to Shell/Agip in exchange of
$1,092,040,000.
The
actual amount of money involved in the agreements was about $1.3 billion — the
balance of $208 million was paid to the Federal Government as a signature
bonus.
The
contract between Malabu and Federal Government was signed by both the minister
of justice and minister of petroleum resources in April last year (for the
Federal Government), and the director and secretary of Malabu (both of whose
names were not stated) on behalf of Malabu.
The
other agreement was also signed in April last year with Shell and Agip agreeing
to the deal.
The
agreements give a chronological account of Malabu’s engagement with the oil
block, right from the time it was given the licence through the period when it
was revoked by Obasanjo and re-awarded by the same Obasanjo to the time of
another re-award in 2010 by Jonathan administration.
They
also listed various legal disputes the company had with both the Federal
Government and Shell, within and outside the country.
The
outcome of the agreements, according to EFCC report, saw “the sum of USD1.092
billion” being “paid into an Escrow account No. 41454193 domiciled in JP Morgan
Chase Co, London” as “compensation to Malabu Oil & Gas”.
The
report said that, of the amount, “the sum of USD 401,540,000 was subsequently
released from JP Morgan and transferred into Malabu Oil & Gas’ account in
First Bank Nigeria Plc while the sum of USD 400,000,000 was transferred into
the company’s account in Bank PHB (now Keystone Bank)”.
Sunday
Trust investigation shows that the balance of $215 million was actually
confiscated by the Queen’s Bench Division of the High Court of Justice in
London in favour of Energy Venture Partners Limited (EVP) on 3 July 2011.
Energy
Venture had sued Malabu over alleged breach of agreement and won the case.
They
said they were the ones who arranged the Malabu deal with both the Federal
Government and Shell/Agip, and that after the deal was sealed Malabu refused to
pay them. The court confiscated Malabu’s money and paid them.
Similarly,
another firm, International Legal Consulting Limited, owned by a Russian
consultant, Ednan Agaev, also sued Malabu in New York demanding $66 million for
a similar issue.
He
claimed that he was the one who actually arranged the deal but was later
ditched by Malabu, forcing him to seek judicial intervention.
In
fact, it was the Russian’s case that actually exposed the whole deal; and it
was his affidavit at the New York Supreme Court and later the judgment of the
case by the court that provided graphic details of what transpired between
various participants in the deal.
Although
he was unsuccessful in the case because the court said it had no power to confiscate
property outside the United States, he has succeeded in putting the whole
Malabu/Federal Government/Shell/Agip deal in jeopardy.
Even
the House of Representatives’ hearing arose out of the details exposed by Mr
Agaev’s case; and his affidavit is part of the documents Mohammed Abacha and
Pecos have been moving around with to prove the alleged theft of their shares.
Etete as a smart operator
Mr
Agaev’s exposure of the deal also provides impetus to the Global Witness in its
campaign against alleged shady deal by Shell and Agip in the agreements. His
disclosure to the New York Supreme Court that Dan Etete was the owner of Malabu
was the backbone of their case. The case described Etete as “Malabu’s
principal”.
Previously,
it was very difficult to openly link Etete to the company since there is no
official record showing any of his names in the company.
In
all the cases, from the original incorporation of Malabu to the alleged forgery
that changed its ownership, Etete’s name is never found in official documents.
Even
in the deal itself, from the negotiation between Nigerian government and
Shell/Agip to the signing of agreement between Malabu and Federal Government,
there is no document revealing Etete’s name.
He
is so smart, said a source, that he ensures that no one can effectively link
him to any of the deals.
This
serves the interest of both Shell and Agip well, said another source, because
any linkage with Etete would expose them to corruption allegations that could
put them in trouble with governments in Europe and the United States.
Etete
as a petroleum minister awarding himself an oil block would be seen as a
serious corruption case, and buying the block from him would generate the same
feeling.
The
Director of Global Witness Simon Taylor said buying oil block from a company
controlled by a former oil minister would be a breach of anti-corruption laws.
Agaev
had told the New York court that Shell and Eni (Agip’s parent company)
effectively bought the block from Malabu.
In
his affidavit, Agaev said he met both Shell and Eni representatives on several
occasions and suggested a deal to Etete in December 2010 that would see the oil
majors getting OPL 245 from Malabu through the Federal Government.
“At
the end of March 2011, I met with Etete, he accepted the proposal, and I
conveyed his acceptance to Eni Agip/Shell,” he stated.
Global
Witness said if that was true the deal breached US and European anti-graft laws
“for the reason that a substantial monetary ‘reward’ ended up being paid to a
company controlled by an individual, who had arguably abused his public
position to obtain OPL 245 in opaque circumstances during the Abacha
dictatorship”.
Both
Shell and Agip denied having any deal with Malabu or breaking any law.
Eni,
Agip’s parent firm, was quoted as saying: “Eni or any of its affiliates have
not entered into a memorandum of understanding with Malabu Oil & Gas in
respect of the Block 245”.
Shell
too said it did not have any dealing with Etete.
It
said: “In resolving this long-running issue, Shell has not acted in any way
that is outside normal global industry practice.
“Inspection
of Malabu’s company records as part of due diligence did not establish any
connection between Dan Etete and Malabu,” it added.
However,
the EFCC report that now links Etete with Malabu seems to contradict Shell’s
claims.
Etete’s
record of being slippery is legendary. Although there have been many court
cases against him and the company now linked to him, and two convictions
secured against him, he has managed to stay out of jail.
A
French court had in 2007 convicted him of money laundering and an appeal court
had upheld the conviction in 2009; but he still managed to escape going to
jail.
Here
in Nigeria the EFCC has told the parliamentary hearing that they too are
looking for him.
The
parliamentary committee too had called on him to appear before it to give
evidence, but he stayed way.
Instead
a legal team went to the hearing session with a submission from Malabu saying
that they are representing the company.
The
committee said they preferred Etete’s physical appearance to give evidence.
Similarity
Although
Etete declined to appear and give evidence at the public hearing, Malabu has
written a comprehensive position over the oil deal.
Its
documents, obtained by Sunday Trust, argued that the transfer of its oil block
to Shell and Agip was done in Nigeria’s interest.
It
admitted that the money had been transferred to it through J P Morgan.
Their
position paper, signed by Olumide Olaiya on behalf of Messrs Dele Adesina &
Co, the law firm representing them, describes the deal as a significant event.
They
said: “To ensure transparency, given the mistrust existing between Shell, NAE
(Agip), Malabu and FGN, and to ensure that all parties adhere strictly to the
timelines and obligations set and imposed in the respective settlement
agreements, FGN, Shell and NAE appointed J.P. Morgan to be escrow Agent for all
the parties.
“In
effect, upon Shell and NAE depositing the signature bonus of FGN and moneys to
settle Malabu’s claim into J.P. Morgan, FGN will re-issue OPL 245 to Shell and
NAE. Upon Malabu relinquishing all its rights and interests to OPL 245 and
release of all claims against Shell, FGN will instruct J.P. Morgan to release
the funds provided to settle Malabu’s claim to it.
“Malabu
says that all these various milestone conditions have since been met by all the
contracting parties,” they added.
Unlike
Mohammed Abacha and Pecos who accused the minister of justice and the minister
of petroleum as well as the minister of state for finance of undermining their
case, Malabu praised them.
In
fact, Malabu’s position paper has similarity with the position of the minister
of justice who insisted that “the role played by the Federal Government, its
agencies and officials in relation to Block 245 was essentially that of
facilitator of the resolution of a long standing dispute between Malabu and
SNUD over the ownership and right to operate Block 245”.
Dismissing
the claims of Mohammed Abacha and Pecos, he said: “At all times material to the
resolution of the dispute, the Federal Government was not aware of any
subsisting third party interest in Malabu’s claim to OPL 245 and neither did
any person or company apply to be joined in the negotiations as an interested
party”.
At
the hearing session of the parliamentary committee, the minister even made an
indirect attack on Mohammed Abacha and Pecos accusing them of contributing to
the difficulties the country faced in the past.
He,
however, became angry when committee members began to ask probing questions,
telling that he was not a crook.
“I
was not that irresponsible and I did not authorise the payment of money from
the federation account to Malabu. The perception there was that the
attorney-general and the minister of state for finance connived to pay some
money to Malabu,” he said.
But
the legislators demanded to know why had he signed an agreement that clearly
violated the government’s laws that disallowed awarding 100 per cent control of
oil block to foreign companies.
The
Nigerian indigenisation and local content provisions allow only 40 per cent
control to foreign firms.
Similarly,
the consultants to Mohammed Abacha and Pecos had also questioned the minister’s
claims that he was unaware of any dispute over the ownership of Malabu Oil
& Gas, saying that there had been several court cases against the company
and over its ownership.
Some
sources even questioned the decision of Jonathan administration to re-award Block
(OPL 245) to Malabu in 2010 barely two months after President Umaru Yar’adua’s
death, even though the company was battling court cases with Shell at that time
over the control of the block.
Significantly,
observers said, most of the far reaching decisions taken in favour of the
company happened when the reports of convictions of Etete by the French courts
were already in public domain.
Perhaps
the fact that Etete’s names do not appear on Malabu’s official records has been
very helpful to both him and those who want to help him.
But
the New York Supreme Court’s records and the EFCC’s investigation, both of
which have now linked him with Malabu, may begin to affect his good luck.
INTERIM INVESTIGATION REPORT
PRESENTED BY
MR. IBRAHIM LAMORDE; THE EXECUTIVE CHAIRMAN
ECONOMIC
& FINANCIAL CRIMES COMMISSION
TO THE HOUSE OF REPRESENTATIVES,
AD-HOC
COMMITTEE PUBLIC HEARING
IN RESPECT OF
“THE TRANSACTION INVOLVING THE FEDERAL GOVERNMENT, SHELL/AGIP COMPANIES AND MALABU OIL & GAS LIMITED IN RESPECT PF OIL BLOC OPL 245”
1.
BACKGROUND:
In
February, 20 1 2, the Commission received a petition written by one A. A. Umar
& Co on behalf of PECOS Energy Limited and Mohammed Sani against one Ednan
Aganev of International Consulting Limited of Confederation of Switzerland.
Geneva; Consular Service of USA Mr Rasky Gbinigie of No. 35, Kingsway Road,
Ikoyi, Lagos and others. The petition bordered on allegations of conspiracy,
forgery and uttering of forged documents for the purpose of misappropriating
the funds of Malabu Oil & Gas by Chief Dan Etete. Malabu Oil and Gas is a
company incorporated in 1998 and granted oil blocs known as OPL 245 & OPL
214 by the Federal Government.
2.
The petitioners stated that his clients; Alhaji Mohammed Sani and PECOS Energy
as well as Kwekwu Amafegha (representing Dan Etete) were shareholders of Malabu
Oil & Gas with an equity ratio of 50:20:30 respectively. They however
alleged that Chief Dan Etete subsequently conspired with the company secretary
of Malabu Oil & Gas; Mr Rasky Gbinigie to forge board resolutions and file
documents purporting to alter the equity structure of the company and also
transferred the complainants’ shares to one Seidou Munamuna and one Joseph
Amaran. Upon discovering this, on 17th October, 2008, Alhaji Mohammed Sani
wrote a letter to the Corporate Affairs Commission with reference number
AT/CUPNI/VOL.1/l29/08 through one Atabo & Co to place a caveat restraining
the company from transacting any business or effecting any change in the
ownership of the company without his or PECOS Energy Ltd’s approval. This he
followed up with another letter to the Corporate Affairs Commission dated 6th
November, 2008, through the same law firm, complaining about the unauthorised
alteration of documents belonging to Malabu Oil and Gas Nig. Ltd. On 28th
November, 2008, Mohammed Sani further wrote a reminder to the Corporate
Affairs. Commission on the earlier stated issues and also wrote a letter
through Mr Mahmud & Co. (legal practitioners) to the Registrar of the
Corporate Affairs Commission to seek clearance on the status of Chief Dan Etete
as a director in Malabu Oil and Gas. In a bid to further press his claim.
Mohammed Sani on 2151 January, 2010, instituted a civil suit no.
FHC/ABJ/CS/59/2010 and FHC/ABJ/CS/51/ 10 against the following:
i.
Malabu Oil & Gas Ltd
ii.
Mr. Kweku Amafagha
iii.
Mr. Hassan Hindu
iv.
Mr. Munamuna Seidogha
v.
Mr. Amaran Joseph
vi.
Mr. Rasky. Gbinigie
vii.
Corporate Affairs Commission
viii.
PECOS Energy Ltd
ix.
Shell Petroleum Development Co. Nig. Ltd
This action was however frustrated due to the disappearance of the court file from the court.
3.
Despite the above events, they alleged that between 2009 and 2011, Shell
Nigeria Ultra Deep Company (SNUD). Nigeria Agip Exploration Ltd (NAE) and Shell
Nigeria Exploration and Production Ltd (SNEPCO) entered into negotiation for
the acquisition of OPL 245 being an asset of Malabu Oil & Gas and same was
acquired through Mr Dan Etete for a consideration of USD 1.3 billion without
recourse to the rightful owners being the complainant. Subsequently, the sum of
USD 801.091.000 was transferred from a JP Morgan Chase account into the
accounts of Malabu Oil & Gas solely controlled by Chief Dan Etete.
Following this the petitioners reported the present matter to the Commission.
4.
INTERIM FINDINGS:
On
receipt of the petition the Commission initiated covert investigation into the
matter in the course of which the following facts have so far emerged:
i.
Incorporation documents of the company obtained from the
Corporate Affairs Commission indicate that Malabu Oil and Gas Ltd was
incorporated on 24th April 1998. At incorporation the company had twenty
million ordinary shares of N1 each distributed as follows
a)
Mohammed Sani 10,000.000 shares
b)
Kweku Amafagha 6,000.000 shares
c)
Hassan Hindu 4,000.000 shares
ii.
The Memorandum and Articles of Association were subscribed
at incorporation by Mohammed Sani, (son of former Head of State; General Sani
Abacha) while the other two directors were surrogated by Hassan Hindu; wife of
Hassan Lawal Adamu (Wakilin Adamawa), former High Commissioner to the United
Kingdom and Kweku Amafegha on behalf of Dan Etete aka Dauzia Etete the then
Minister of Petroleum Resources. Mohammed Sani Abacha however now claims that
the said Mohammed Sani was himself. He did not however explain why his surname
was omitted from the Memorandum and Articles of Association.
iii.
Analysis and comparison of the obtained incorporation
documents from the Corporate Affairs Commission and those submitted by the
petitioners show a suspicious variance strongly indicative of forgery of the
documents submitted to the Corporate Affairs Commission.
iv.
A subsequent search conducted by Rickey Tarfa & Co dated
31/08/2007 as well as an undated search conducted by Wali, Uwais & Co
revealed that
a)
The corporate status, shareholding structure and the names of directors
were changed and filed by one Rasky Gbinige. Thus, Mohammed Sanni was changed
to Alhaji Mohammed Ahmed Sani with four million shares in contrast to the
original ten million shares
b)
Following this, Alhaji Mohammed Sani Ahmed, Kweku Amafegha, Hassan Hindu
and Aliyu Mohammed Jabu were appointed directors of the company and the latter
was also appointed Managing Director. There was no evidence however indicating
that Mohammed Sanni and Hassan Hindu had resigned their appointments or
transferred their appointments or shares.
v.
Further changes and filings of appointments of new directors
and allotment of shares were done by the said company secretary arising from
purported board meetings which successfully ousted the complainants from the
company despite the absence of their written relinquishment of appointments as
directors or of their shares in the company.
vi.
On 24/05/2011, following the sale of OPL 245 to Shell/Agip
and the consequent compensation to Malabu Oil & Gas, the sum of USD 1.092
billion was paid into an Escrow account No. 41454193 domiciled in JP Morgan
Chase Co, London.
vii.
That the sum of USD 401,540,000 was subsequently released
from JP Morgan and transferred into Malabu Oil & Gas’ account in First bank
Nigeria Plc while the sum of USD 400,000,000 was transferred into the company’s
account in Bank PHB Plc (now Keystone Bank Plc).
5. CONCLUSION:
From
the ongoing, it is evident that the matter before the Commission which it is currently
investigating is the alleged conspiracy forgery, uttering of forged documents
and fraud by the above stated suspects to the detriment of the complainants.
While this has led us to the disbursement of funds arising from the sale of OPL
245 and the consequent compensation of Malabu Oil and Gas being the premier
owners, we are currently not in possession of facts relating to the
circumstances surrounding the sale of OPL 245 to authoritatively speak on the
matter presently.
Our
investigation into the case is not yet concluded and any Position Paper from
the Commission at this stage would be prejudicial to our ongoing investigation.
IBRAHIM LAMORDE
EXECUTIVE
CHAIRMAN, EFCC
Credit:
Daily Trust
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