NGF Consultant, Melrose to Challenge Forfeiture Order on Paris Club Fees
Uncovers discrepancies in debt deductions
One of the consultants engaged by the Nigeria Governors’ Forum (NGF) to verify and reconcile the data generated in respect of the over-deductions on states and local government accounts on the London and Paris Club debts for the period 1995-2002, Melrose General Services Limited has accused the Economic and Financial Crimes Commission (EFCC) of obstruction and has vowed to stop the attempt by the anti-graft agency to get a forfeiture order on its consulting fees for the services rendered to the NGF.
Melrose has also revealed that there were inconsistencies in the data generated in respect of over-deductions on states and local government accounts on the London and Paris Club debts.
EFCC last Friday had obtained a temporary forfeiture order from the Federal High Court in Lagos for a total of N1,442,384,857.84 found in the bank accounts of three firms, which it claimed had impersonated the consultants engaged by the NGF to analyse the Paris/London Club loan refunds due to the states.
The EFCC alleged that the defendants obtained N4.3 billion from the NGF by making false claims.
Listed as defendants in an ex parte application taken before the court were Melrose, WASP Networks Limited and Thebe Wellness Services.
The firms were accused of impersonating a consortium of consulting firms engaged by the governors’ forum for the “verification, reconciliation and recovery of over-deductions on Paris and London Club loans on the accounts of states and local governments between 1995 and 2002”.
The EFCC said the original firms engaged by the governors’ forum were GSCL Consulting and Bizplus Consulting Services Limited.
An investigator with the EFCC, Usman Zakari, alleged that the managing partner of the first defendant, Melrose, Robert Mbonu, made a false representation to the NGF, causing the forum to pay N3.5 billion to his company’s company on December 14, 2016.
Zakari said the money was credited into the Access Bank account of Melrose, adding that the respondents dissipated and laundered about N2.3 billion out of the money between December 15, 2016, and January 20, 2017, leaving a balance of N1.2 billion.
Counsel for the EFCC, Ekene Iheanacho, told Justice Cecilia Mojisola Olatoregun of the Federal High Court that it would best serve the interest of justice for the respondents to be ordered to forfeit the N1.4 billion temporarily to prevent them from dissipating same.
The judge granted the application and ordered the EFCC to publish the order in a national daily.
She gave anyone interested in the funds 14 days to appear before her to show cause why the funds should not be forfeited permanently.
But Melrose in a statement yesterday informed THISDAY that in certain instances the amounts to be refunded were overstated to the tune of $30 million.
The firm said it was merely carrying out a professional duty for its client, the NGF.
Melrose said it had briefed its lawyers to file an appropriate response to the action instituted by the EFCC.
The company said: “This matter has been handed over to our lawyers, and we will not jeopardise the process by making the details of our defence public at this stage.
“We wish to inform all our partners, clients, stakeholders and well wishers that this matter is now in the courts and will be effectively dealt with.”
The company’s spokesman, Christabel Omonemu who spoke to THISDAY explained that in the course of its work, which took several months, the firm made some observations relating to some inconsistencies in the modelling and computation used by the consultants to the states in arriving at the un-reconciled balances.
He said the firm had undertaken an extensive review of the data from the states based on data generated by the states’ consultants.
Omonemu said: “Prior to the initial payment, we submitted a report of our findings, which was accepted by our client (the NGF), and had just began mobilising our team of accountants to undertake a physical verification of the actual data from their various sources in the states, when we were stopped and prevented from doing so by the actions of the EFCC.
“In terms of the actual exercise, our preliminary findings have revealed instances where the excess amounts to be refunded to some states were not precise, but open and unreconciled figures, and in certain instances, the amounts were either overstated to the tune of up to $30 million, or under-stated in one case.
“Knowing that the initial payment to states was for only 25 per cent of the total, and the states badly needed the funds to pay the backlog of salaries, pensions and other arrears, we, in good judgment decided that the issues of over payments and under payments will be resolved and reconciled with the states in question during the later stages of the exercise,” he stated.
The company accused the EFCC of making deliberate efforts to tarnish its image and the reputation of its highly regarded professionals who are also former bankers.
He said if the commission had been diligent, it would have discovered that Melrose was duly engaged by the NGF to use its expertise in reconciling payments made by the various states in respect of multilateral loans and debt repayments.
Omonemu said investigation into the matter started in January 2017 and that the company has been subjected to unwarranted publicity and untold harassment while carrying out its legitimate duty.
He also explained that the company’s account has been frozen since February this year, as the EFCC placed a Post-NoDebit (PND) on the account.
According to him, the company has kept quiet all this while to allow EFCC carry out its investigation.
He said: “Having waited for over eight months with no word from EFCC, we deemed it necessary to make a demand on our accounts, from our bankers – Access Bank.
“We suspect this might have prompted the rather rushed forfeiture order made after eight months of placing a Post-No-Debit (PND) on our corporate accounts.
“We are a highly reputable firm of financial and risk management professionals. Some of the services we render include bad loan recoveries on behalf of banks, and on the other hand, we undertake reconciliation mandates from clients who may have been overcharged by their bankers for loans granted and lead the process of such negotiations.”
He said the mandate received from the NGF was within the company’s purview and a terrain it was familiar with.
“Our letter of award and terms of reference was very clear – to verify and reconcile the data generated in respect of the over-deductions on states and local government accounts on the London and Paris Club debts for the period 1995-2002.
“Our fees were negotiated as a percentage of recoveries made, and the job was awarded on a ‘no-cure no-pay’, i.e. on a strictly performance basis,” he added.
He said EFCC’s activities had caused reputational damage and grounded some of the company’s operations.
“We wonder why the EFCC will go to such lengths just to embarrass and tarnish the image and reputation of some highly regarded professionals who are also former bankers.
“We are not aware of the exact details released by EFCC, and the court order filed at this time. But we are sure that a responsible government agency saddled with the responsibility to fight corruption and financial crimes will have done their checks and investigation properly before making any false statements to the public.
“Our clients have also since released statements on the confirmed legitimacy of our appointments as consultants for this exercise and our performance,” he explained.
When news first broke that EFCC was investigating its contractors, NGF had issued a statement confirming that Melrose was one of the consultants engaged and documented by it to facilitate the recovery and disbursement of the Paris Club refunds, saying the consultant was also paid an amount commensurate with the services it provided, among other numerous consultants that were involved in the process.
The NGF also maintained its earlier position that it had done nothing illegal as far as the disbursement of the Paris Club refunds to states and the consultants were concerned, adding that the forum got all the necessary approvals to act in the manner it did.
The statement signed by its Head, Media and Public Affairs, Mr. Abdulrazque B. Barkindo said it was not in the NGF’s purview to determine how Melrose or other consultants disbursed or utilised the consultancy fees paid to them.
The forum had advised EFCC not to drag it into how its suppliers, lawyers, contractors and consultants spent their legitimate incomes and revenues.