LOOTING THROUGH COURT CASE: FG BATTLES PETROL UNION AND GAS LTD OVER 15BIL DOLLAR FRAUD CASE IN SUPREME COURT

Supreme court

The Supreme Court will continue its hearing on a case involving the Central Bank of Nigeria (CBN), Union Bank of Nigeria (UBN) and an oil and gas company – Petro Union Oil and Gas Company Limited (Petro Union), over an alleged £2.556 billion fraud attempt, today.

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This is as Petro Union and some of its officials will also be facing criminal charges at the federal high court in Lagos on the same matter which the economic and financial crimes commission (EFCC), said is an attempt to defraud UBN, the CBN and by extension, the federal republic of Nigeria of another large sum of money.

The said sum of £2.556 billion plus interest amounts to $15 billion in today’s terms, a situation liken to the infamous $10 billion Process & Industrial Development Limited (P&ID) fraud attempt against Nigeria by experts who have studied the case to

Expectations are high as the Petro Union case resumes in the supreme court, especially as the criminal case at the Federal High court continues to unravel evidence which indicate that the judgments in favour of Petro Union at the lower courts, were allegedly obtained by fraud.

Petro Union had in  1994 allegedly fraudulently procured a cheque from a branch of Barclays Bank in the UK with a value of £2.556 billion and presented it at one of Union Bank’s branches in Lagos, under the pretext that it was meant to construct three petrochemical refinery complexes in Nigeria and establish a bank. While the required due diligence investigations were being carried out, one Mr. Okpala, the managing director of Petro Union, allegedly inundated the CBN and Union Bank with visits and demands for the release of the cheque.

Eventually, both the CBN and Union Bank advised Petro Union that Barclays Bank in the UK had been contacted and it confirmed that the cheque could not be given value to because the company that purportedly issued the cheque dated 29 December 1994 (a company, known as Gazeaft Limited) did not exist on the Register of Companies in the UK. The response similarly affirmed that the account on which the cheque was drawn was closed on 21st September 1989 whereas the cheque was issued on 29 December 1994 – five years after the account was closed.

Despite the foregoing discovery and decisive response, Petro Union and Isaac Okpala allegedly persisted with their demands and this culminated in a petition by the company to the Lagos office of the EFCC, for alleged offences of stealing and criminal conversion against the CBN and Union Bank.

Following, the petition, the EFCC investigated the allegation by interrogating the CBN through a letter dated 12th January 2005.

In a letter dated 27th January 2005, The CBN responded to the query by the EFCC wherein it denied the allegations of Petro Union. The EFCC also made other efforts to investigate the allegations including corresponding with Barclays Bank in the UK. Having concluded its investigation, the EFCC issued a letter dated 10th May 2005 addressed to the managing director of Union Bank exonerating the bank from any wrongdoing.

However,  Petro Union in February 2012 instituted an action at a Federal High Court, Abuja in Suit No. FHC/ABJ/M/104/2012: PETRO UNION OIL & GAS CO. LTD .V. CENTRAL BANK OF NIGERIA AND ORS., seeking sundry reliefs against (1) CBN, (2) Union Bank, (3) Hon. Minister of Finance and (4) The Attorney-General of the Federation and alleged that Union Bank received the sum of £2,556,000,000.00 on behalf of Petro Union and transferred the sum of £2,159,221,318.54 to the CBN while retaining the sum of £396,778,681.46 as commission.

In support of this claim, Petro Union alleged that the money is kept in an account in the name of a company called Goldmatic Limited at the CBN and tendered a alleged purported CBN Statement of Account of Goldmatic Limited.

The Federal High Court, Abuja Judge before whom the claim was filed, Honourable Justice Abdu Kafarati accepted the alleged purported CBN Statement of Account as conclusive evidence that CBN had retained the money alleged to belong to Petro Union, ignoring the elementary fact that globally a central bank cannot open an account for a private entity – the CBN is statutorily empowered to act as bankers to government and bankers to banks.

Meanwhile, both the CBN and Union Bank have appealed to the appellate courts to set the judgment aside, urging the appellate courts to do justice in the matter especially when the truth of the alleged fraud had been uncovered leading to the arrest, detention and ongoing criminal prosecution of Petro Union and its officers at the Federal High Court in Lagos.

It is also alleged that Petro Union obtained the two judgments at the Federal High Court and the Court of Appeal based on facts which were not only predicated on falsehood, but which have criminal implications.

The judgment obtained by Petro Union at the Federal High Court in 2014 for the sum of £2.556 billion also carries an interest of 15 per cent per annum from 22nd June 1995 until judgment and thereafter at the rate of 10 per cent  per annum until payment.

Today, that judgment sum together with interest is in excess of £12 billion (about $15.5 billion) – this is 50 per cent  more than the award in the P&ID case and represents 44 per cent of Nigeria’s foreign reserves today!

Experts believe that if upheld, the judgment will have dire implications for Nigeria’s financial system.