UK detectives shun Diamond Bank N6b bad loan case

UK detectives shun Diamond Bank N6b bad loan case

…As contractors move to sue Bank, liquidators for criminal confiscation
By Kelechi Mgboji
The Serious Fraud Office (SFO) United Kingdom (UK) has distanced itself from the N6 billion fraud case in which Allan Dick West Africa (ADWA) Limited (now liquidated) made away with the unsecured loan granted to them by Diamond Bank Plc.

Joint liquidators of the UK firm, Akinwunmi & Busari and Ihegwoazu & Co had pocketed N200 million out of the N850 million paid by MTN Nigeria to settle debts owed local contractors by Allan Dick, claiming that they would use the money to pursue the case in the UK against the parent company, Allan Dick Company Limited, UK.

But in exclusive interview, Principal Partners of the two law firms, Akinwunmi and Ihegwoazu, told ExclusiveNews that the cost of prosecuting a law suit in the UK is costlier than they could afford with N200million and decided on the option to work with the Serious Fraud Office (SFO) UK believed to be the Nigerian equivalent of Economic and Financial Crimes Commission (EFCC).

When ExclusiveNews contacted the SFO UK, the financial crime busters said they could not confirm having any interest in the so called fraud case which the Nigerian lawyers claimed they had reported soliciting for their expert assistance.

In an emailed inquiry to the SFO UK, our reporter had written to Nilima Fox, Head of the Media Department thus: “Joint liquidators of Allan Dick West Africa, Akinwunmi & Busari and Ihegwoazu & Co, both legal practitioners in Nigeria, said they have since applied to your office for assistance to bring the suspects to book.

“Please kindly oblige us with information on the progress you have made in your investigation. We requests for facts, figures and statements on the case. Or is the case closed?”

But Fox quickly replied that he was out of the office until much later date in December and advised that we contact his colleague Susan Givens, a member of the SFO press office.

Eventually, it was Jina Roe who responded to our enquiry. The tacit response reads: “Without wishing to be unhelpful, I can neither confirm nor deny SFO interest in this matter”.

When we pressed further for more precise information in the classic case of cross border fraud where the UK based firm transferred huge sums of money into personal accounts of individuals as well as corporate accounts at a time when it claimed to be insolvent, the SFO office stated “We have no further comment.” 

Against this backdrop, the managing director and chief executive officer, West and Gate (W&G) Limited, Chief Paul Okogbule, and other local contractors in the telecommunication sector, whose firms are at receiving end of the fraud decided on a legal action against the joint liquidators,  Akinwunmi & Busari and Ihegwoazu & Co and the Diamond Bank and all those involved in a web of the fraud controversy.

A letter to the Joint Liquidators of ADWA, Akinwunmi and Ihegwoazu, by Citi Lawyers, solicitors to West and Gate and the distraught contractors of Allan Dick, the local subcontractors demanded for a refund of N200m only to subcontractors of distressed Allan Dick and Company West Africa Limited.

In similar letter to Diamond Bank, the contractors also demanded for a refund of N150m only to the subcontractors.

Both letters dated December 19th 2013 and obtained exclusively by ExclusiveNews, read in part: “We hereby unequivocally demand from You on behalf of our clients, the refund of said sum of N200 million being the amount illegally deducted by Yourself and Mr. Victor Ihekweazu of the firm of Akinwunmi & Busari and Ihekweazu and Co respectively from the amount paid by MTN to our clients.

“Your failure to comply with the above demand within seven clear days of your receipt of this letter will leave us with the options of taking the appropriate legal steps in a competent court of law.”

The letter to Diamond Bank partly reads: “We hereby unequivocally demand from your bank on behalf of our clients, the refund of said sum of N150 million being the amount illegally deducted by your bank officials from the amount paid by MTN to our clients.

“Your bank’s failure to comply with the above demand within seven clear days of your receipt of this letter will leave us with the options of forwarding our petitions to the appropriate authorities and instituting legal action in a competent court of law.”

The contractors detailed how Diamond Bank Plc lost N6 billion (or 18.1 per cent above its Profit after Tax in its last financial year) to Allan Dick West Africa Limited, a telecommunications services firm promoted by its parent company in United Kingdom (UK) known as ADC.
Chief Paul Okogbule who earlier briefed select newsmen in Lagos on the issue recounted how the portfolio investors obtained an unsecured loan amounting to N6 billion from Diamond Bank Plc in 2007, which the bank also helped the expatriates to launder back to the United Kingdom.
ADWA also known as ADC eventually commenced a process of liquidation without repaying the loan to the bank and some subcontractors it contracted to work on MTN Communications Limited base stations.
The aggrieved local contractor said that Diamond Bank and its appointed liquidators connived to short-change the subcontractors of ADWA that executed work for MTN, whom they paid about N4 million each no matter how much they were being owed.
The contractors alleged that contrary to bank rules, Diamond Bank instead of going after its N6billion loan took a lion share from the N850 million paid by MTN to local subcontractors of ADWA, after it claimed to have written off the loan or sold it to AMCON.
ExclusiveNews gathered that the liquidators of ADC gave Diamond Bank N150 million out of the N850 million payout, and concealed the recovered N150million without declaring it the bank's financial statement of 2011 and 2012.

Mindful of its consequences, the bank had earlier in 2009 during the banking industry audit concealed the unsecured loan from the Central Bank of Nigeria (CBN) and as a result failed to sell same to the Assets Management Corporation of Nigeria (AMCON).
A look at Diamond bank's last financial result showed that no mention was made in respect of the loan as it neither wrote it off nor sold it to AMCON at the wake of CBN reforms initiated by Sanusi Lamido Sanusi.
The bank's financial results for 2011 and 2012, indicates that there was nowhere in its books where the N150 million recovery was also reported, an act which some financial experts said can only be possible if there is a practice of creative accounting.
Despite appropriating N200 million of the N850 million paid by MTN Nigeria, the liquidators of Allan Dick  never initiated any legal proceedings against ADC in the UK who are promoters of ADWA.
The joint liquidators who met in April last year with creditors of ADWA told ExclusiveNews in an interview that they could not initiate legal proceedings in the UK against British directors of Allan Dick because it would require huge sums of money to do so.
Okogbule whose contract sum is valued above N17million said that Diamond Bank may have decided to let the sleeping dog lie as it lost interest in the recovery of the loan, a reason why it did not fund the legal cost to initiate a suit for recovery proceedings in the UK.
He disclosed that two of the local contractors have since died due to their inability to repay loans they secured in executing the contracts for MTN on behalf of ADWA who refused to pay them for work done.
Efforts to get Diamond Bank to respond to our inquiries yielded no result. The bank after a meeting between select group of journalists and a team of corporate communication executives of the bank as well as  TPT, the Bank’s media consultants, late  December 2013, said it will give official response which it never did till date.