BENUE PROBE: Click here to Read The Full Report And How Much Each Person is to Refund
Its no longer news that the Benue State Government brought in a probe panel to help recover stolen funs from the past administration. After a long wait for the commission to come up with the result, yesterday the Benue Peoples wishes were met as the commision released 52 names of Government officials who looted the treasury. Read below their full report and recomendations:
BENUE STATE OF NIGERIA
BENUE STATE OF NIGERIA
GOVERNMENT VIEWS AND DECISIONS
ON THE
REPORT OF THE JUDICIAL
COMMISSION OF INQUIRY INTO FUNDS
ACCRUING/RECEIVED AND THE
UTILIZATION OF BENUE STATE
FUNDS/ASSETS, 2015
FEBRUARY, 2016
TABLE OF CONTENTS
S/NO CONTENTS PAGE(S)
1.0 Chapter One
INTRODUCTION:--------------------------------------------------------- 1-7
Chapter Two
2.0 TERM OF REFERENCE I::---------------------------------------------- 8-10
Identify all revenue sources and total
amount of revenue which accrued to
Benue State Government between June 2007
and May 2015.
Chapter Three
3.0 TERM OF REFERENCE II:----------------------------------------11-14
Specifically ascertain how much funds were
actually received from:
Allocation from Federation Account.
Local Government Funds
Internally Generated Revenue (IGR)
Bond and Loans
Excess Crude Account
Small & Medium Enterprises (SMEs) funds
Ecological Funds
VAT
Sure-P Funds
State Universal Basic Education Board (Sure-P)
MDGs
Any other Funds
Chapter Four
4.0 TERM OF REFERENCE III:---------------------------------------15-20
Ascertain the quantum of stocks owned
by Benue State Government in Dangote Cement
Company Plc, Julius Berger Plc, Benue Breweries
Ltd and other Companies or Enterprises.
Chapter Five
5.0 TERM OF REFERENCE IV:--------------------------------------21-23
Ascertain the circumstances that led to the sale
of such shares / stocks and their worth or value.
Chapter Six
6.0 TERM OF REFERENCE V:----------------------------------------24-25
Identify the Investors who bought those
stocks/shares and determine whether the transaction
followed due process of the law.
Chapter Seven
7.0 TERM OF REFERENCE VI:------- -------------------------------26-27
Ascertain the where about of
the proceeds of the sale.
Chapter Eight
8.0 TERM OF REFERENCE VII:--------------------------------------28-30
Determine if the Government of Benue State
has any equity left in the said Companies and
the value of such equity.
Chapter Nine
9.0 TERM OF REFERENCE VIII:-------------------------------------31-33
Ascertain if the funds realized in
(a), (b, (d) and (e) above were appropriated.
Chapter Ten
10.0 TERM OF REFERENCE IX:--------------------------------------- 34-64
Ascertain the application and
utilization of such funds.
Chapter Eleven
11.0 TERM OF REFERENCE X:--------------------------------------65-173
Establish Misappropriation (if any),
and identify the person or persons involved.
12.0 Acknowledgement:--------------------------------------------------- 174
1
1.0 INTRODUCTION
The Judicial Commission of Inquiry into Funds Accruing/Received
and the Utilization of Benue State Funds/Assets 2015 (hereinafter
referred to as “the Commission”) was established pursuant to the
Commission of Inquiry Law (Cap.40) Laws of Benue State 2004. On
August 11th 2015, the Executive Governor of Benue State Samuel I.
Ortom constituted the 6 member above named Commission by an
instrument dated 22nd July, 2015.
Following the report of the Transition Committee which presented a
gloomy picture of the economic and financial position of the State, it
became necessary to set up the Commission. The Committee had
observed that the handing over notes submitted by the last
administration showed unclear sources of revenues for the State, gross
financial indiscipline within the agencies and officials of government,
zero balances in Government treasury, a huge debt burden and
uncertain level of control in the ownership of Government-Owned
enterprises and stocks, and massive corruption and waste in the
business of governance. Similarly, infrastructure was in a state of decay
and disrepair and many projects were abandoned. In the same way
schools at all levels were closed down for many months due to nonpayment
of salaries and allowances. The non-payment of salaries to civil
servants at both State and Local Government levels led to a very low
morale among the work force.
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1.1 Terms of Reference
The Commission had the following Term of Reference:
a) Identify all revenue sources and the total amount of
revenue which accrued to Benue State government between
June 2007 – 2015.
b) Specifically ascertain how much funds were actually
received by Benue State Government from:
Allocation from Federation Account
Local Government Funds
Internally Generation Revenue (IGR)
Bonds and loans
Excess Crude account
Small and Medium Enterprisers (SME) funds
Ecological funds
VAT
Sure-P funds
SUBEB
MDGs
Any other funds
c) Ascertain the quantum of shares/stock owned by Benue
State Government in Dangote Cement Company Plc, Julius
Berger Plc, Benue Brewery Ltd and other Companies or
Enterprises.
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d) Ascertain the circumstances that led to the sale of such
share/ stocks and their worth or value.
e) Identify the investors who bought these shares/ stocks and
determine whether the transactions followed the due
process of law.
f) Ascertain the where about of the proceeds of the sale.
g) Determine if the Government of Benue State has any
equity left in the said companies and the value of such
equity.
h) Ascertain if the funds realized in (a), (b), (c) and (d) above
were appropriated.
i) Ascertain the application and utilization of such funds.
j) Establish misappropriation if any, and identify the person
or persons involved.
k) Recommend appropriate action to the Government.
The Commission was to complete its assignment within 6 months
from the date of its first public sitting.
2.0 MEMBERSHIP AND INAUGURATIONOF THE
COMMISSION
2.1 Membership
TheCommission was inaugurated on Tuesday 11th August, 2015
by the Executive Governor of Benue State, Samuel Ortom at the
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Banquet Hall of the Benue People’s House, Makurdi with the
following as members:
1. HON. JUSTICE E.N. KPOJIME - CHAIRMAN
2. BARRISTER J.I. ABAAGU - MEMBER
3. REV. FR. PROF. FRANCIS WEGH - MEMBER
4. DR. CHRISTOPHER OBUTE - MEMBER
5. JACOB I. MULYA - MEMBER
6. MR. SEKEGH AKAA - MEMBER/SECRETARY
7. MICHAEL. AGBER ESQ - LEAD COUNSEL
In his inaugural speech, Governor Samuel Ortom clearly stated
that “the objectives of the Commission are not to witch-hunt anyone but
rather to set the records straight”, emphasising further that his
Government had “already pledged to ensure compliance with the rule
of law and due process in the conduct of government business and this
will also apply to the work of the Commission. Our administration
wishes to emphasise that our core values include accountability,
transparency, fairness, justice, equity, discipline and selflessness. As we
inquire into the past, officials of my administration must note that one
day their work may also be put under scrutiny hence the need to live
above board. At every turn I have stated publicly that our administration
has zero tolerance for corruption and that any official, no matter how
highly placed, who converts public funds to personal use will be
sanctioned.”
5
The Governor’s speech clearly set out the Commission’s direction
and modus operandi.
2.2 Commencement
The Commission held its inaugural meeting immediately after
inauguration at Court 4, High Court of Justice, Makurdi, Benue
State. Public sitting however, commenced on September 16,
2015.
3.0 METHODOLOGY
3.1 Preliminary meetings to the Commission were devoted to
devising a strategic plan of action that would facilitate effective
delivery of its job within the limited mandated time frame. The
major target was to achieve a detailed examination of the income
and expenditure profiles of all Ministries, Departments and
Agencies (MDAs) and wide coverage and publicity.
Thereafter, the Commission called for memoranda from MDAs
and the general public. The notice was well publicised in the
print, electronic and social mediaover a period of two weeks.
Such memoranda formed the basis of the subsequent intensive
and detailed public sittings which the Commission conducted as
well as the examination of relevant facts. The public sittings
provided an opportunity for all concerned and willing persons to
testify.
Following the poor response from the public, especially the
MDAs, the Commission held an interactive session with heads of
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MDAs in the State. At the session, a template was given to each
MDA to guide in the preparation of the required memoranda.
After this, the Commission prepared a timetable for the public
sittings and issued witness summons to the respective Chief
AccountingOfficers and heads of MDAs inviting them to appear
before the Commission with reference to the areas on which they
were expected to provide information. Public sittings commenced
in earnest on September 16, 2015. The Commission’s public
sittings were interrupted for 21 days by an interim order secured
by the former Governor, Dr. Gabriel Suswam, challenging the
legality of the Commission. The order was subsequently vacated
on November 9, 2015 and the Commission resumed its public
sittings on November 11, 2015. It however had to change its
issuance of witness summons to witness invitation consistent with
the ruling of the court. In deserving instances the Commission
took evidence in camera.
4.0 THE REPORT
The report of the Commission is in four volumes as follows:
a). Volume I:
i. Governor’s inaugural speech
ii. Records of proceedings.
b). Volume II:
i. Report of Findings and Recommendations
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c). Volume III:
i. Record of Witness Invitations and Proof of service
d). Volume IV:
i. Executive Summary
5.0 GENERAL REMARKS
Government has carefully examined the Committee’s Report,
findings and recommendations. Government has expressed its
views and decisions on the Report as contained in the succeeding
paragraphs of this White Paper.
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Chapter Two
2.0 TERM OF REFERENCE I:
Identify all revenue sources and total amount of revenue which accrued
to Benue State Government between June 2007 and May 2015.
2.1 Findings
The Commission found that:
a. Sources of revenue that accrued to the State during the period
under review can be broadly classified into 6 categories. These are:
(i).Allocations from FederationAccount to the State.
(ii). Allocations from FederationAccount to the Local Government
Councils.
(iii). Internally Generated Revenues (IGR)
(iv). Specialized funds from Federal Government.
(v). Loans and
(vi). Grants.
b. Specifically, 27 sources of revenues were identified during the
period. These were: Statutory Allocations from the Federation
Account to the State Government, Statutory Allocations from the
Federation Account to the Local Government Councils (LGCs),
State Internally Generated Revenue (IGR), Bonds, Loans from
Commercial Banks, Micro, Small and Medium Scale Enterprises
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(MSMEs) Loans from Central Ban of Nigeria (CBN), Received
Funds from Bank of Industry, Excess Crude Receipts, Ecological
Funds, Value- Added Tax (VAT), State Component of Sure-P
funds, Local Government Councils Component of Sure-P funds,
Millennium Development Goals (MDGs) Funds, Proceeds from
Sale of Shares, Proceeds from Sale of Government-owned
Enterprises, Lease of Government Assets and Properties, Budget
Augmentation Funds from the Federation Account, London Club
debt refunds, Nigeria National Petroleum Corporation (NNPC)
Refunds, Exchange Rate Gains, Additional Funds from
Accountant-General of the Federation, Universal Basic Education
Commission (UBEC) Funds, Tertiary Education Trust (TET)
Funds, National Economic Empowerment and Development
Strategy (NEEDS) Assessment Funds, United Nations Development
Programme (UNDP) Funds and Board of Trustees (BOT) Grants to
Tertiary Institutions.
c. The total revenue which accrued to the Benue State Government
from all the revenue sources listed above from June 2007 to May
2015 was N1,021,931,043,163.63 (One Trillion, twenty one billion,
nine hundred and thirty one million, forty three thousand, one
hundred and sixty-three naira sixty-three kobo). Yearly details of the
10
income and respective revenue sources is contained in Table 1 of
this report.
2.2 Observation
Some critical revenue sources especially funds from development partners
such as African Development Bank (ADB), Bank of Industry (BOI),
Infrastructural Development Bank, World Health Organisation (WHO),
Department for International Development (DFID), European Union,
etc. were never explored during the period under review.
2.3 Recommendation
A sound structure should be put in place to harness the revenue
opportunities available from these sources for the development of the real
sectors of the State economy.
2.4 Comment
Government accepts the recommendation.
11
Chapter Three
3.0 TERM OF REFERENCE II:
Specifically ascertain how much funds were actually received from:
Allocation from Federation Account.
Local Government Funds
Internally Generated Revenue (IGR)
Bond and Loans
Excess Crude Account
Small & Medium Enterprises (SMEs) funds
Ecological Funds
VAT
Sure-P Funds
State Universal Basic Education Board (Sure-P)
MDGs
Any other Funds
3.1 Findings
The Commission found that the revenues which accrued to the State
from the stated sources were as follows:
a. Allocations from Federation Account (Statutory Allocations only)
– N282,105,369,075.23 (Two hundred and eighty two billion, one
12
hundred and five million, three hundred and sixty nine thousand
and seventy five naira, twenty three kobo).
b. VAT – N56,202,702,671.69 (Fifty six billion, two hundred and two
million, seven hundred and two thousand, six hundred and seventy
one naira, sixty nine kobo).
c. Excess Crude Account – N35,838,989,072.88 (Thirty five billion,
eight hundred and thirty eight million, nine hundred and eighty
nine thousand seventy two naira, eighty eight kobo).
d. Ecological Funds – 2,500,000,000.00 (Two billion, five hundred
million naira only).
e. MDGs – N5,303,065,599.00 (Five billion, three hundred and three
million, sixty five thousand five hundred and ninety nine naira
only).
f. Sure-P Funds – N14,215,202,457.83 (Fourteen billion,
twohundred and fifteen million, two hundred and two thousand,
four hundred and fifty seven naira, eighty three kobo).
g. Small and Medium Enterprises (SMEs) Funds –
N3,500,000,000.00 (Three billion, five hundred million naira only).
h. Internally Generated Revenue (IGR) – N78,072,988,310.09
(Seventy eight billion, seventy two million, nine hundred and eighty
eight thousand, three hundred and ten naira nine kobo).
13
i. Bonds and Loans – N69,843,333,076.26 (Sixty nine billion, eight
hundred and forty three million, three hundred and thirty three
thousand, seventy six naira, twenty six kobo.
j. Local Government Funds – N348,270,300,148.32 (Three hundred
and forty eight billion, two hundred and seventy million, two
hundred and forty eight naira, thirty two kobo.
k. UBEC Funds – N92,999,161,491.64 (Ninety two billion, nine
hundred and ninety nine million, one hundred and sixty one
thousand, four hundred and ninety one naira sixty four kobo)
l. Other funds – N23,257,654,251.22 (Twenty three billion, two
hundred and fifty seven million, six hundred and fifty four
thousand, two hundred and fifty one naira twenty two kobo).
3.2 Observations
1. Revenue opportunities from development partners were not
sufficiently explored during the period under review.
Consequently, the State recorded little or no revenue from those
areas especially those that required counterpart funding and
special institutional structures to attract.
2. The Internally Generated Revenue (IGR) at the state level
recorded within the period under review was low relative to the
opportunities available within the state. This is largely due to
inefficient revenue collection machinery and administration.
14
Some agencies of the State such as Radio Benue, Secondary
Schools and Tertiary Institutions failed to disclose their IGR.
3. The Local Government Councils (LGCs) recorded zero level IGR
within the period under review.
3.3 Recommendations
1. Government should endeavour to pay its counterpart
contributions and establish necessary structures to access funds
from the development partners.
2. There should be strict compliance and enforcement of revenue
laws both at the State and the Local Government levels.
3. There should be full disclosure by all agencies of government of
their Internally Generated Revenue (IGR).
4. There should be strict monitoring and periodic auditing of IGR of
Local Government Councils to ensure full disclosure and
accountability.
3.4 Comment
Government notes the recommendations in paragraph 3.3 (1-4).
15
Chapter Four
4.0 TERM OF REFERENCE III:
Ascertain the quantum of stocks owned by Benue State Government in
Dangote Cement Company Plc, Julius Berger Plc, Benue Breweries Ltd
and other Companies or Enterprises.
4.1 The Commission classified the Equity holdings of the State Government
into two groups for purposes of analysis:
a. Equities held and managed by Benue Investment and Property
Company (BIPC) and
b. Equities held in State-owned Enterprises controlled by the Ministries.
4.2 a. Details of stocks held by BIPC before and after the sale of July to
September 2014 as provided by BIPC were as follows:
S/No Name of Stock Quantity before
the Sale
Quantity as at
29th May 2015
1. Dangote Cement Plc 135,885,746 14,174,466
2. Julius Berger Plc 63,293,408 35,630,782
3. AIICO Insurance Plc 32,116,835 0
4. Union Bank Plc 160,055 0
5. UAC Nig. Plc 1,920,506 7
6. Afribank Plc. 67,797,365 0
7. CONOIL 432,934 0
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S/No Name of Stock Quantity before
the Sale
Quantity as at
29th May 2015
8. Dunlop Nig. Ltd. 172,080 172,080
9. Sterling Bank 4,307,556 0
10. Nigeria Energy Sector 4,000 4,000
11 Ashaka Cement 1,458,333 0
12. United Nig. Textile Plc. 846,453 846,453
13. Fidelity Bank Plc. 365,739 0
14. First Bank Plc. 2,516,761 23,756
15. UBA Plc. 389,443 0
16. Spring Bank Plc 570 0
17. Unity Bank Plc 585,477,400 585,477,400
18. P.Z Industries Plc 14,858 0
19. UBCAP 30,804 0
20. Guiness Plc 1416 0
21. Vitafoam Plc 20,000 0
22. 7UP Plc 2812 0
23. WAPCO Plc 500,000 500,000
24. Flour Mill of Nigeria Plc 1512 0
25. FCMB Plc 14,522,841 0
26. AFRIPRUD Plc 7,701 0
27. Diamond Bank Plc 25,000,000 7,000,000
28. Nestle Plc. 430,948 430,948
29. Zenith Bank Plc 5,500,000 5,500,000
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S/No Name of Stock Quantity before
the Sale
Quantity as at
29th May 2015
30. Nigerian Breweries Plc 350,000 350,000
31. GTBank Plc 4,570,000 4,570,000
4.2 b. Equitiesheld in State-Owned Enterprises controlled by Ministries –
These refer to companies floatedby the Government in which the State
Government holds significant ownership and control.
The Commission found that while some of these Enterprises were outrightly
sold, some were partly sold and a few others were leased out to
some private operators.
The ownership status of the enterprises is analysed as follows:
S/No Company Name Ownership Status Reporting Ministry
1. Benue Breweries Ltd. Sold out Industry, Trade &
Investment
2. Agro Millers Ltd. Sold out Industry, Trade &
Investment
3. Yuteco Foods Ltd. Sold out Industry, Trade &
Investment
4. Makurdi
International Hotel
Partly Sold Culture and
Tourism
5. Benue Hotels
Makurdi
Leased Culture and
Tourism
6. Ben Fruits Nig. Ltd. Leased Industry, Trade and
Investment
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S/No Company Name Ownership Status Reporting Ministry
7. Lobi Cassava Flour
Mills
Leased Industry, Trade and
Investment
8. Taraku Mills Ltd. Leased Industry, Trade &
Investment
9. Fertilizer Blending
Plant
Leased Agriculture
10. Makurdi Zoological
Garden
Leased Culture & Tourism
11. Benue Plaza Lagos Leased BIPC
12. Benue Plaza Abuja Leased BIPC
13. Benue Plaza Kaduna Leased BIPC
14. Livestock
Investigation and
Breeding Centre
Raav
Leased Agriculture
15. Poultry
Demonstration &
Hatching Centre
Leased Agriculture
16. Divisional Produce
Office, Makurdi
Leased Agriculture
17. Makurdi Golf
Course & Club
House
Leased Sports.
18. Petrol Filling Station Leased Works
19. Benkims Plastics Ltd Leased Industries, Trade
and Investment.
20. Petrol Filling Station Leased BIPC
19
4.3 Observations
1. The Commission noted that there was a discrepancy in the
information given by BIPC and Elixir Securities Ltd, the managers
of the shares /stocks. For instance:
(a). While BIPC stated that the proceeds of the sale of the stock
was N8.3 billon, Elixir Securities Ltd stated that the amount
of the proceeds of sale was N9.4 billon.
(b). While BIPC stated that the worth of the State Government
stocks under their management as at October 2014 was 8.8
billion, Elixir Securities Ltd stated that the stock value within
the same time was N10.2 billion.
(c). While BIPC consistently maintained that the State
Government had not lost its seat on the Board of Julius Berger
Plc, Elixir Securities Ltd stated that the seat was lost but it had
commenced the process of buying back to recover the seat.
2. Contrary to the assertion by the managing director, Mrs. Brigid
Shiedu that some stock brokers were selling State Government
stocks without their consent and authorization, the Commission
20
found that all such sales were duly authorized by BIPC, as such
authorization were signed at various times by Mrs Shiedu.
3. The portfolio management contract executed with Elixir Securities
Ltd was significantly skewed in favour of the latter.
4.4 Recommendations
1. BIPC, which is the custodian of these shares should under a new
management immediately proceed to carry out an independent
verification with a view to ascertaining the actual quantum of stocks
still held by the Benue State Government with Elixir Securities Ltd
and other stock brokers , as well as the actual amount realised from
the divestment exercise of 2014.
2. The portfolio management contract with Elixir Securities Ltd
should be reviewed by the new BIPCmanagement.
4.5 Comment
Government accepts the recommendations in paragraph 4.4 (1 &2).
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Chapter Five
5.0 TERM OF REFERENCE IV:
Ascertain the circumstances that led to the sale of such shares / stocks
and their worth or value.
Findings:
5.1 The Commission found that:
a. The shares were sold on the directive of the then Governor,
Dr.Gabriel Suswam. According to BIPC, the Governor summoned its
Managing Director Mrs. Brigid Shiedu and his former Commissioner of
Finance, Mr. Omadachi Oklobia to Government House and informed
them that Government wanted to complete some development projects
but had run out of funds. Consequently, he directed the sale of part of
the portfolio of shares held by Government through BIPC since it was the
most viable option for raising funds internally.
b. The value of the shares at the time was N25.2billion. However, the
Governor directed that N10billion worth of shares should be sold. The
stockbrokers – Elixir Securities Ltd - informed the Commission that a
total sum of N9.411billion was realized from the sale of the shares and
was paid into three (3) different accounts as directed by BIPC.
c. BIPC authorized the stockbroker to sell the shares at a discount of
15%.
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5.2 Observations
1. There was absolute lack of sincerity in the entire transaction ab
initio, because the same projects which were to be funded by the
proceeds from the sale of shares were the basis for which two bonds
worth N18billion were earlier floated. Moreover, the manner in
which the proceeds from the sale of these shares were
misappropriated underlines the lack of sincerity.
2. There was a discrepancy in the figures given as the amount of
proceeds realized from the sale of shares. Whereas BIPC informed
the Commission that N8,368,699,932.30 was realized, Elixir
Securities Ltd informed the Commission that N9,411,708,009.51
was realised.
3. The discount of 15% is considered extremely high.
5.3 Recommendations
1. The Commission recommends that a new Management should
immediately be put in place at BIPC.
2. The new management should take urgent steps to verify the actual
amount realized from the divestment exercise of 2014.
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3. The new Management should carry out an independent verification
to ascertain the actual quantum of stocks still held by Benue State
Government with Elixir Securities Ltd and other stock brokers.
5.4 Comment
Government accepts recommendations in paragraph 5.3 (1-3).
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Chapter Six
6.0 TERM OF REFERENCE V:
Identify the Investors who bought those stocks/shares and determine
whether the transaction followed due process of the law.
Findings
6.1 The Commission found that:
a. Dangote Cement, Julius Berger and other stocks being managed by
BIPC were sold through Elixir Securities Ltd and bought by investors
through various stockbrokers. However, Elixir Securities Ltd and BIPC
refused to disclose the identity of the buyers to the Commission.
b. Benue Breweries Ltd. was sold for N400,000,000.00 to M/S
Consolidated Breweries Ltd.
c. Agro Millers Ltd was sold for N400,000,000.00 to M/S Masco Agro
Allied Industries Ltd.
d.Yuteco Foods Ltd was sold for an unspecified amount under
receivership circumstances.
e. The entire process of these sales did not follow due process of law as no
pre-sale valuation was done to ascertain the true value of Benue Breweries
Ltd. and Agro Millers before the sale, and neither were the sales
consistent with the Benue State Privatization Law.
25
6.2 Observation
The Commission observed that the refusal by BIPC and Elixir Securities
Ltd to disclose the identity of the new investors is suspicious particularly
in view of the heavy discount that was accorded to the transaction.
6.3 Recommendation
The provisions of the Benue State Privatization Law should be adhered to
in all future privatization exercises in the State.
6.4 Comment
Government accepts the recommendation. Government further directs the Ministry
of Finance to investigate and uncover the true identities of the investors that
bought the stocks/shares.
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Chapter Seven
7.0 TERM OF REFERENCE VI:
Ascertain the whereabout of the proceeds of the sale.
Findings
7.1 The Commission found that:
a.Shares sold by BIPC amounting to the disclosed sum of
N9,411,708,009.51 were directly paid into Bank Accounts as follows:
Beneficiary Amount (N) Bank Account Number
BIPC 1,000,000,000.00 GTBank 0027866325
Benue State Min of
Finance.
5,300,699,991.00 Zenith 1013852648
Fanfash Resources 3,111,008,018.51 Zenith 1013677218
b. The Zenith Bank account no. 1013677218 into which the sum of
N3,111,008,018.51 was deposited was presented as a project account of
Ministry of Finance by Hon. Omadachi Oklobia. However, the
Commission found that it is private account belonging to Fanfash
Resources, owned by one Abubakar Umar, a Bureau de change operator.
The said amount was withdrawn, converted into foreign exchange and
given to the former governor, Dr. Gabriel Suswam.
27
The sale proceeds of Benue Breweries and Agro Millers, and the lease
proceeds of Taraku Mills and other enterprises were treated in the same
way as the amounts realised were paid into accounts of the respective
reporting ministries and spent immediately, with most withdrawals being
made in cash.
c. Benue Breweries and Agro Millers were sold and the proceeds paid into
the Ecobank and Skye Bank accounts of the Ministry of Commerce and
Industries under the leadership of Hon. Terfa Ihindan, and the entire
amount spent without appropriation.Other sale and lease proceeds were
misapplied in a similar manner.
7.2 Observation
The Commission observed that:
i. The transactionswere ill-motivated and not transparent.
7.3 Comment
Government notes the observation.
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Chapter Eight
8.0 TERM OF REFERENCE VII:
Determine if the Government of Benue State has any equity left in the
said Companies and the value of such equity.
Findings
8.1 The Commission found that:
a. Records provided by Elixir Securities Ltd show that the State
Government through BIPC still has the following shares:
i. Dangote Cement Plc. - 4,174,466 units of shares
ii. Julius Berger Plc. - 44,400,000 units of shares
iii. UAC - 7 units of shares
iv. Dunlop Nig. Ltd. Plc - 172,080 units of shares
v. Nigeria Energy Sector - 4,000 units of shares
vi. United Nigeria Textile Plc - 846,453 units of shares
vii. First Bank Plc. - 23,756 units of shares
viii. Unity Bank Plc. - 585,477,400 units of shares
ix. Nestle Plc. - 500,000 units of shares
x. GTBank Plc - 5,500,000 units of shares.
b. Benue State Government has no equity left in Benue Breweries Ltd,
Agro Millers Ltd and Yuteco Foods Ltd as they have been sold
outrightly.
29
c. The sale of Julius Berger shares which was a strategic investment for
the State Government compromised the State Government’s seat
on the Board. But Elixir Securities informed the Commission that it
had initiated a buy back to increase the State Government’s holding
and secure a seat on the Board of the Company. This buy back
transaction was still ongoing. This explains the increase of the Julius
Berger stocks from 35,630,782 units as at 29/5/2015 to 44,400,000
units as at November 2015.
d. The total value of Benue State equity holdings in all the firms above
cannot be easily stated as stock prices fluctuate on a daily basis.
However, according to Elixir Securities Ltd, the total value of stocks
of the State under its management as at 10th November 2015 stood
at N9,408,025,085.72.
e. The equity holdings of the State Government in the following
enterprises are still intact:
i. Benue Hotels, Makurdi
ii. Makurdi International Hotel
iii. Ben Fruits Nig. Ltd
iv. Lobi Cassava Flour Mill
v. Taraku Mills Ltd
vi. Fertilizer Blending Plant
vii. Makurdi Zoological Garden
30
viii. Benue Plaza Lagos
ix. Benue Plaza Abuja
x. Benue Plaza Kaduna
xi. Livestock Investigation and Breeding Centre Raav
xii. Poultry Demonstration and Hatching Centre,
xiii. Divisional Produce Office Makurdi,
xiv. Makurdi Golf Course
xv. Ministry of Works Filling Station Makurdi and
xvi. BIPC Filling Station, Makurdi.
The value of these firms can be ascertained by qualified independent
valuers and quantity surveyors.
8.2 Recommendations
The Commission recommends that:
i. The portfolio managers should hasten the buyback of the
Julius Berger stocks to secure the State’s seat on the
Company’s Board.
ii. There should be a closer monitoring of the portfolio managers
by the new management of BIPC.
8.3 Comment
Government accepts the recommendations in paragraph 8.2 (i&ii).
31
Chapter Nine
9.0 TERM OF REFERENCE VIII:
Ascertain if the funds realized in (a), (b, (d) and (e) above were
appropriated.
Findings
9.1 The Commission found that:
a. Total revenues that accrued to the State from all sources from June
2007 to May 2015 was N1,021,931,043,163.63 (one trillion, twenty
one billion, nine hundred and thirty one million, forty three
thousand, one hundred and sixty three naira, sixty three kobo).
b. Total approved estimates for the same period was
N802,044,735,336.00 (eight hundred and two billion, forty four
million, seven hundred and thirty five thousand, three hundred and
thirty six naira) only.
c. This means that the difference of N219,886,307,827.63 (two hundred
and nineteen billion, eight hundred and eighty six million, three
hundred and seven thousand, eight hundred and twenty seven naira,
sixty three kobo) was not appropriated.
d. Specifically:
(i) The entire sale and lease proceeds of Government Enterprises
amounting to over N10.9billion between June, 2007 and May
2015 was spent without appropriation.
32
(ii) The entire SURE-P fund proceeds of over N14.2billion was
expended without appropriation.
(iii) The expenditure of the entire bond proceeds amounting to
N18billion realized in 2011 and 2014 were not appropriated.
(iv) The entire amount of N35,025,368,000.00 expended on
“logistic funds for Security Surveillance” was not appropriated.
(v) The total expenditure of N5,887,000,000.00 as “Cost of
Running Government” was not mentioned in any Appropriation
Act during the period.
9.2 Observations
The Commission observed that:
i. Due process was not followed in the conduct of floating both bonds
while there was absolute lack of transparency in the utilization of
the proceeds therefrom.
ii. The amount of N35,025,368,000.00 expended on security
surveillance was too high, having regard to the fact that security
issues were allegedly funded from other sources, such as Ministry of
Finance, Local Government Councils and ALGON.
iii. The expenditure head “Cost of Running Government” is alien to
public sector budgeting.
33
9.3 Recommendation
The Commission recommends that all government revenues should be
appropriated.
9.4 Comment
Government notes the recommendation.
34
Chapter Ten
10.0 TERM OF REFERENCE IX:
Ascertain the application and utilization of such funds.
Findings
10.1 The Commission found that:
a) Out of the total revenue of N1.02trillion realised by the government
of Benue State from various sources between June 2007 and May
2015, only about 15% was expended on capital projects while 85%
was used as recurrent expenditure.
b) The management of the capital expenditure was characterized by:
i. Lack of due diligence in contract billing resulting in contract
padding and inflation.
ii. Absence of due diligence in contract award.
iii. Use of substandard materials.
iv. Poor quality of jobs executed.
v. Abandonment of projects after collecting payments.
vi. Payment for jobs not executed and
vii. Multiple payments for the same contracts.
All these resulted in a huge capital expenditure profile without a
corresponding physical development.
35
c) In the same vein, the huge recurrent expenditure profile was found
to be laden with waste and loss of financial resources occasioned by
the complete abandonment of financial instructions and regulations.
For instance, some contracts were awarded verbally and paid for in
cash, while others were without a consideration clause which is an
essential component of every valid contract and yet paid for at the
caprices of the awarding authority.These contracts without stated
amounts and timelines were used as instruments to siphon
government funds as they were endlessly paid for. In addition, Job
Orders and contracts were often highly inflated and given arbitrarily
by the Governor and Commissioners without following laid-down
procedures.
d) Salaries and wages were also found to have increased astronomically
within the period. The total amount spent on salaries for the State
civil servants and political appointees (excluding Local Government
Staff and Primary School Teachers) for the period under review was
N253,737,786,385.00 (two hundred and fifty three billion, seven
hundred and thirty seven million, seven hundred and eighty six
thousand, three hundred and eighty five Naira).
The major reasons for the astronomical increase in the salaries and
wage bills within this period were salary adjustments and defective
36
payroll management. The manual payroll system was grossly
compromised and abused. The e-payment and biometric payroll
system that was later introduced at high cost to the government could
not eliminate the incidence of ghost workers due to a deliberate
manipulation of the system.
e) Statutory overhead provisions were irregularly paid to the MDAs.
The irregularity of the release of the overhead allocations often led the
Commissioners and their Permanent Secretaries to violate financial
regulations in order to run their offices, a system some witnesses
referred to as “doctrine of necessity”. The violations ranged from
illegal placement of government funds in fixed deposits accounts with
banks and withdrawal of monthly accrued interests, diversion of funds
meant for specialised purposes, corruption in contract administration
and outright cash withdrawals and disbursements from accounts of
MDAs without approvals.
f) Revenues were being collected and spent by the MDAs without
remittance to the treasury as required by law. - The Commission in
the course of its sitting examined the appointment of the former
Executive Chairman of BIRS, Mr Andrew Ayabam, and his activities
and arrived at the following findings:
37
i. The terms and conditions of the pioneer Executive Chairman,
Mr. Andrew Ayabam, were totally unrealistic. The Chairman
was given a bonus of 10% of the excess of the target set for him.
ii. The calculation of the bonus was not based on the revenue
actually collected as it covered all revenues, including the PAYE
of civil servants deducted at source by the Office of the
Accountant-General and the revenue generated by other
agencies.
iii. The amount collected for a particular month was determined by
the Executive Chairman rather than the Accountant-General
who has the responsibility for reporting revenues accruing to the
State. This permitted paper revenue to be declared.
iv. The Executive Chairman generated and spent revenue directly
without appropriation or approval. Such payments included his
salaries and benefits.
v. Before his engagement, bonuses for revenue generation were
paid to the Board of Internal Revenue, the precursor of the
Benue State Internal Revenue Service and not the Executive
Chairman.
vi. The Executive Chairman acted simultaneously as the Executive
Chairman and consultant to the Board.
38
g) The Commission also found that some Institutions and Parastatals
like the Examination Board, Radio Benue and some other
Institutions generated and spent their Revenues without
appropriation or remittance to the Accountant General’s Account.
h) Huge cash transactions were found to be the order of the day. The
cash transactions were adopted ostensibly to conceal fund movement.
The obliteration of the track of movement of funds enabled
government officials to embezzle public funds easily. Government
officials engaged in all manner of cash transactions above the limits
stipulated by the Money Laundering (Prohibition) Act and CBN
regulations. Government business was generally carried out
conveniently in cash thereby reducing accountability but exposing the
handlers to high risks of robbery attacks, theft and general losses.
These unwholesome practices were found to be a major source of
revenue leakage during the life of the past administration. For
example, about 80% of transactions by the Bureau of Local
Government and Chieftaincy Affairs were done in cash. From its FBN
account 2017241513 which commenced operation in June 2011, the
Bureau made cash withdrawals of N9,202,400,000.00 in 2011,
N12,212,500,000.00 in 2012, N10,550,300,000.00 in 2013,
N8,577,200,000.00 in 2014 and N2,518,600,000.00 by May 2015
when the tenure ended. Thus, total cash withdrawals from this
39
account alone between 27th June, 2011 and 30th May, 2015 amounted
to N43,057,000,000.00 (Forty three billion and fifty seven million
naira).
Staff of the Bureau including Moses Detso, Ndera Moses, Isaiah
Ipevnor, John Chahul, Agbo Agbo, Andrew Ayande and Fred Ikpeen
were used as instruments of these acts. On the instruction of the
Governor and his Special Adviser on Local Government and
Chieftaincy Affairs, Mr. Solomon Wombo, these officers withdrew
cash of over N500million per transaction contrary to the Money
Laundering Act. Details of the cash withdrawals are contained in
Table 2 of this report.
The Ministry of Finance equally engaged in this unwholesome
practice, with the Commissioner, Permanent Secretary and their Staff
as well as bankers dealing in high volume cash transactions amounting
to hundreds of millions of naira.
i) An expenditure subhead known as “Cost of Running Government”
was invented by the Ministry of Finance and Accountant-General’s
Office. This strange sub-head which is completely unknown to public
sector finance and accounting system, was used by the Accountant-
General to release on different occasions a sum of over
N5,887,000,000.00 (Five billion, eight hundred and eighty seven
40
thousand naira) to various MDAs including Government House,
Ministry of Finance and Bureau of Internal Affairs and Special
Services between September 2011 and May 2015 without approval.
Government House received N500million in 2011, N20million in
2013, N50million in 2014 and N50million in 2015 making a total of
N620million. The Ministry of Finance received N4.3billion in 2012,
N2.1billion in 2013, N275million in 2014 and N155m in 2015
totalling N5,887,000,000.00. The Bureau of Internal Affairs and
Special Services received N376million in 2015. Unfortunately, all
monies released as “Cost of Running Government” had no approvals
backing them, and were withdrawn in cash and expended by the
Governor, Dr. Gabriel Suswam, his Finance Commissioner, Hon.
Omadachi Oklobia, and the Permanent Secretary, Ministry of
Finance, Mrs. Ruth Ijir.
j) The concept of security vote was grossly abused. Firstly, there was no
security vote appropriated in the budgets. Funds were simply taken to
the Governor in cash by officials of the Ministry of Finance and the
Bureau of Internal Affairs and Special Services on demand and
classified as “logistics funds for security surveillance”. This monthly
expenditure was irregular as it ranged from N100million to over
N1.2billion in some months during the life of the administration.
Consequently, a huge total unappropriated sum of
41
N35,025,368,000.00 (thirty five billion, twenty five million, three
hundred and sixty eight thousand naira) was used as “logistics funds
for security surveillance” between June 2007 and May 2015. Details of
this are contained in Table 3 of this report.
k) Other Funds:
1. SURE-P Funds - A total of N14, 215,202,457.83 was received
as SURE-P funds between 2012 and 2014 as detailed below:
a. State Component - N7, 743,731,873.59
b. Local Government Component - N6, 472,191,797.84
Total - N14,215,923,671.43
These funds were by law required to be managed through a wellstructured
State Implementation Committee (SIC) and channelled
specifically to thematic areas of critical infrastructure and social security
programs such as women and youth empowerment, unemployment and
community services through a rigorous disbursement procedure.
Regrettably, the Benue State Implementation Committee (SIC) was only
inaugurated on 24th February, 2014, at the prompting of the Benue State
House of Assembly queries, when the funds had been almost completely
misappropriated.
For example the Commission found that out of the N7.7billion State
component,only N1,236,318,000.00 was expended by the State
Implementation Committee of the Schemes for the purpose intended.
42
The balance ofN6,507,413,873.59was diverted (and in most cases
withdrawn cash) and spent on questionable purposes on the approval of
Dr. Gabriel Suswam, his Finance Commissioner,Hon. Omadachi
Oklobia, the Permanent Secretary Ministry of Finance,Mrs. Ruth Ijir and
the Accountant-General,Mr. Joseph Kpaakpa, under the guise of Local
and Foreign Travels, local government election, payroll biometric
registration, weddings, constitution amendment, Government House
furniture, hosting of Nigerian Bar Association meetings, Lobi Stars,
security surveillance, purchase of vehicles for Commissioners and State
Assembly members, sallah gifts for the Governor, diesel for Governor’s
lodge, celebration of Benue Woman for 2013, Government House
overhead, Christmas and new year celebration, annual golf tournament,
voter’s registration exercise, and “additional cost of running government”.
Most of these funds transferred to the various MDAs, especially the
Ministry of Finance and Government House, were withdrawn wholly in
cash from the bank and taken to the Governor, Dr. Gabriel Suswam, or
the Finance Commissioner, Hon. Omadachi Oklobia.
The Local Governments’ SURE-P component on the other hand was
diverted to unrelated uses of “budget augmentation”, purchase of
Christmas rice, purchase of fertilizer, ALGON projects and purchase of
security vehicles for Local GovernmentCouncils by the Governor and his
Special Adviser, Mr. Solomon Wombo. Moreover, a record of the
43
amounts received by Local Governments from SURE-P funds shows that
onlyN2,596,162,422.32 out of the N6,472,191,797.84was released to
the Local Government Councils by the Bureau. The balance was
disbursed as follows:
i. N206,500,000.00 paid into ALGON account and withdrawn cash.
ii. N58,500,000.00 was paid to Lead Automobile for purchase of vehicles
for Government Officials.
iii. N64,402,210.90 was expended on pilgrimages.
iv. N4,000,000.00 was paid for Swine Crop Project.
v. The balance of N3,542,627,165.00 was transferred into the JAAC
account with First Bank and withdrawn cash. The statement of account
showed a zero balance as at 29th May, 2015. Details of SURE-P funds paid
to Local Government Councils and their utilization are captured in Table
4 of this report.
2. Bonds –
i. Benue State Government issued two fixed-rate bonds of N13billion
and N5billion in 2011 and 2014 respectively.
ii. The N13billion Bond was approved by the State House of
Assembly at the request of the Governor containing a list of projects
to be financed with the proceeds. The projects were:
44
a. Construction of Greater Makurdi Water Works.
b. Construction of the Otukpo Township Water Supply Scheme.
c. Construction of Otobi Water Works.
d. Construction of Katsina - Ala Water Works.
e. Construction of Water Scheme at Anyiin, Logo Local Government
Area.
f. Construction of Taraku – Naka – Agagbe Road.
g. Construction of Ge – Ikyobo – Anshagba Road.
h. Construction of Anyiin – Ugba – Amaafu Road.
i. Construction of Agbeede – Amua – Anshagba Road.
j. Construction of Zaki-Biam – Afia – Gbeji Road.
k. Construction of Vandeikya – Koti Yough – Adikpo Road.
l. Construction of Eke – Olengbecho – Ugbokolo – Otukpa –
Orokam Road.
m. Construction of Orokam – Owukpa – Okpoga – Utonkon Road.
n. Construction of Otukpo – Utonkon – Igumale Road.
o. Construction of Oju – Obussa – Utonkon Road.
45
p. Construction of Benue State University Teaching Hospital
Makurdi.
Curiously, some of the listed projects were those documented as having
been completed in the administration’s “First Term Report: 2007 –
2011”. These projects were consistently funded from the 2008 to 2015
budgets.
iii. The N5billion bond was meant for the following projects:
a. Construction of Oshigbudu - Obagaji 10.10km road.
b. Construction of Oju – Obussa - Utonkon 51.48km road.
c. Construction of Taraku – Naka – Agagbe 61km road.
d. Up-grade / rehabilitation of Daudu – Gbajimba road from rural
road.
e. Construction of Wannune – Ikpa – Igbor road.
f. Rehabilitation and up-grading of water works at Makurdi, Otukpo
and Katsina – Ala.
iv. An Irrevocable Standing Order (ISPO) was issued authorizing
deductions from the State Government’s allocations at source.
v. The prospectus shows that the application list for the N5billion
bond opened and closed on the same date – 25th February 2015.
46
vi. The entire N13b bond was diverted and embezzled by the former
Governor, Dr. Gabriel Suswam and his associates Hon. Omadachi
Oklobia and Mrs. Ruth Ijir.
vii. Again the N5billion bond proceeds was never captured in the
revenue/expenditure profiles of the fiscal year 2014 nor did the
funds appear in the revenue estimates of the 2015 budget. Yet the
funds were received and spent during the period. This means the
entire bond proceeds were also not appropriated.
viii. Although the various Benue State official documents refer to the
bond as N5billion, the prospectus however showed that it was
N4,959,000,000 that was floated.
ix. Only N4,537,596,320.50 was received into the State Government
account as proceeds from the said bond.
x. Importantly, none of the documented list of projects to be financed
by the N5billionbond benefitted from the bond proceeds as
outlined. Rather, the proceeds were allegedly used for payment of
salaries, “logistics funds for security surveillance”, “additional cost of
running government”, purchase of vehicles, Easter activities,
“computer paper and materials necessary for the preparation of
payrolls”, local and foreign trips and repair of cars. Meanwhile,
some of the listed projects that necessitated the bond issue remain
unexecuted to this moment. Some of them which were documented
47
to have been completed in the “First Term Report: 2007 – 2011”
still featured in the bond prospectus. For example, the Oju –
Obussa – Utonkon and Taraku – Naka – Agagbe Roads were said to
have been completed between 2007 – 2011 with the sums of
N3,997,787,734.92 and N4,728,615,045.00 respectively.
xi. The Cost of Bond Issues: The former Governor approved in one
day (3/3/2014) two separate memoranda of N500m and N414m
amounting to N914,000,000.00 as cost of “issuance of fixed rate
bond by way of public offering” and another N40,960,000.00 as
cost of preliminary work on proposed Benue State bond. The earlier
expense of N914m was purportedly meant to cater for “pre-bond
activities” and cost of “pursuing the bond”. The amounts which
were disbursed from proceeds of shares sold by the Government
were again withdrawn in cash from the Ministry of Finance
accounts.
3. CBN Commercial Agricultural Credit Scheme (CACS) Loan – This
loan of N1,000,000,000.00 was accessed from CBN in 2012 to
finance small scale farmers in order to boost agricultural production,
but was wholly applied or diverted as highlighted below:
a. N806,625,000.00 was purportedly given as loans mostly to
politically exposed persons, friends and relations of the Governor
using non-existent businesses and names. The qualifying criteria as
48
set out by CBN was blatantly disregarded in the disbursement
process and funds used largely for political patronage.
Consequently, little repayment has been achieved since 2012.
b. The sum of N193, 700,700.00 was completely diverted to
Government MDAs as detailed below without any record of
repayment up to date:
i. Ministry of Finance - N163.4million
ii. Government House Makurdi - N5.3million
iii. Bureau of Internal Affairs and Special Services N25million
Curiously, these amounts were withdrawn from the MDAs’ accounts in
cash on the approval of Mr. Omadachi Oklobia, the Permanent Secretary,
Mrs. Ruth Ijir, and other associates of the Governor.
The entire N1,000,000,000.00 CACs loan proceeds was also diverted /
mismanaged.
4. CBN MSMEs Development Fund
The State Government applied for a share of the N220billion Micro,
Small and Medium Enterprises Development Fund setup by the Federal
Government through the CBN and N2billion was approved and accessed
by the State. This fund was specifically meant to be given as loans to
MSMEs to boost entrepreneurship and economic development in the
State. The mode of disbursement of the fund as set by CBN was through
49
Micro-finance banks (for Micro and small scale enterprises) and
Commercial Banks (for medium scale enterprises) with maximum single
obligor limits of N500,000.00, N5,000,000.00 and N50,000,000.00 for
micro, small and medium scale enterprises respectively. Moreover, the
wholesale funds were to be accessed from CBN by the States through a
dedicated Participating Finance Vehicle (PFV), while disbursement to
beneficiaries was to be through Participating Financial Institutions (PFIs).
However, the Governor set up a one-man PFV represented by Esther
Yange and after accessing the N2billion, transferred only N1billion to the
PFIs (micro-finance banks) for onward lending to MSMEs. The sum
ofN1,000,000,000.00 was thereafter, diverted into government account
and purportedly disbursed to MDAs as follows:
i. Bureau for Internal Affairs and Special Services – N470,000,000.00
ii. Benue State University Salaries – N309,212,590.00
iii. Benue State House of Assembly – N72,790,000.00
iv. Ministry of Finance – N167,000,000.00
v. Deputy Governor’s office – N6,333,495.00
vi. Government House Makurdi – N3, 504,000.00
vii. BOARCH overhead – N500, 000.00
viii. BSSTEB overhead – N500, 000.00
5. Proceeds of sale of shares, enterprises and leases
50
a. The amount of N1billion paid into BIPC account was used by the
Company for the:
i. Construction of a Hotel in North-Bank, Makurdi,
ii. Construction of a plaza at One Man Village, Nasarawa State
and
iii. Development of an Estate at Mabushi Abuja.
b. It was also found that apart from the Hotel in North-Bank which is
about 90% completed, none of the other projects for which the
N1Billion was funded has reached a 35% completion level, thereby
necessitating a more detailed investigation into the application and
utilisation of the amount by BIPC.
c. The N5.3billion paid into the account of Benue State Ministry of
Finance was misappropriated in the following manner:
i. The sum of N534,700,000.00 was immediately withdrawn
cash and disbursed as follows:
a) Hon. Omadachi Oklobia (N243,000,000.00)
b) Mr. Peter Ochoga (on behalf of the Governor, Dr. Gabriel
Suswam (N100million).
c) Mr. Fergus Manger (N120million).
d) Mrs. Ruth Ijir (N42million).
e) UBA Capital (N29.7million).
51
ii. The sum of N355,931,979.00 transferred to BIPC was
immediately moved into the Zenith Bank account of San
Carlos Benue Farms Ltd from where it was again quickly
withdrawn entirely by the M.D. of BIPC,Mrs. Brigid Shiedu
and the Company Secretary, Barr. John Tyokegh.This
amount purportedly represented 40% equity contribution by
the Benue State Government for the establishment of the San
Carlos Green House project at Howe in Gwer Local
Government Area of Benue State. San Carlos Capital was to
contribute 60% equity share. However, the entire transaction
was found to be a fraud as:
a. San Carlos Capital has not made any contribution to the
project upto date.
b. The above amount which was meant for the importation
of equipment from Mexico for the San Carlos Green
House project was never transferred to Mexico but was
withdrawn and embezzled.
c. There is no Mexican connection whatsoever in this
transaction.No work had been done at the site of the said
project and no equipment had been supplied.
52
d. A Certificate of Occupancy in the name of San Carlos
Benue Farms Ltd has already been issued over the site and
is in possession of San Carlos Capital Partners.
iii. The San Carlos Benue Farms Ltd is owned by Dr. Gabriel Suswam
through Ashi Integrated Farms Ltd (60%) and purportedly BIPC
(40%). Curiously records show that the BIPC representatives on the
Board are Mr. Joseph Tsavsar (Joe K) and Barr. Wilson Eryum
Tingir who are blood brothers to Dr. Gabriel Suswam, and have no
relationship with BIPC. Meanwhile, the shareholding structure of
Ashi Integrated Farms Ltd is Dr. Gabriel Suswam (40%) and his two
sons Terna Suswam (30%) and Shimater Suswam (30%). The
implication is that the San Carlos Benue Farms Ltd is wholly owned
by Dr. Gabriel Suswam.
iv. The balance of N4,410,068,012.10 was entirely remitted out by the
then Accountant-General, Mr. Joseph Kpaakpa via “verbal
approvals” to the Ministry of Finance, Bureau of Internal Affairs
and Special Services and Government House where the amount
were withdrawn cash and misapplied.
l. Procurement and Lease of vehicles
i. Between 2008 and 2009, the Ministry of Finance procured 100No
commercial taxis (Peugeot Partner) which were distributed to
various beneficiaries on hire-purchase basis. Repayment for the
53
taxis by the beneficiaries was found to be poor. Full repayment was
supposed to have been made within 5 years, but there are high
outstandings 6 years after.
ii. Again in October 2010, the Ministry of Finance procured 25 Taxis
through the Lobi Leasing Company Ltd and distributed them on
hire-purchase. Repayment has been poor with huge outstandings to
date even when the transaction tenure has expired.
iii. In addition, 12 taxis were procured in 2014 under the phase 3 of
the taxi scheme and distributed on hire-purchase to beneficiaries.
This scheme has also recorded poor repayment by beneficiaries.
iv. The State Government through the Ministry of Agriculture
procured 148 tractors from TAK Continental Ltd at the cost of
N1,076,800,000.00 (One billion, seventy six million eight hundred
thousand). These were also leased out to individuals at the rate of
N5,110,000.00 per tractor after an initial deposit of
N1,533,000.00. The balance of N3,577,000.00 was required to be
paid out within 5years. This Scheme has also recorded poor
repayment.
v. Various vehicles were procured by the Ministry of Finance under
the Transport Scheme of the SURE-P at the total cost of
N314,400,000.00. Among the vehicles were 26 buses purchased at
a total cost of N127,500,000.00. These were distributed as follows:
54
i. 12Nos to Pleasure Travels, Makurdi
ii. 2Nos to Abbas Cooperate Service, Makurdi
iii. 6Nos to Ejifa Transport Service, Makurdi
iv. 1No to Junas Mac Continental, Makurdi
v. 1No to Rock Haven Services, Makurdi
vi. 1No to Diba Company Ltd., Makurdi
vii. 1No to Luter AS Enterprises, Makurdi
viii. 1No to Jibo Titus, Makurdi
This Scheme hasbeen poorly managed and repayment has been
poor.
m. The Commission found that various corrupt practices had been
carefully perfected at the State Universal Basic Education Board
(SUBEB). This has led to indiscriminate deduction of salaries of
teachers, salary padding, prevalence of ghost workers and ghost
schools. These acts have created untold hardships for teachers and a
demotivated workforce at the Primary education level, leading to
poor quality of primary education in the State.
n. Memoranda were received from Higher Institutions in the State, i.e
Colleges of Education Katsina Ala and Oju respectively; Benue
State Polytechnic Ugbokolo, Akperan Orshi College of Agriculture
Yandev and College of Advanced and Professional Studies
55
Makurdi. These Institutions were found to generate significant
revenues which were not properly accounted for.
10.2 Observations
The Commission observed that:
a. The 15% total revenue expended on capital projects during the
period was too low.
b. There was poor planning, execution and monitoring of capital
projects. This was apparently designed to facilitate the irregularities
noted.
c. The defective and compromised payroll system resulted in payment
to ghost workers and exclusion of some genuine workers from the
payroll.
d. Salary figures continued to rise yearly despite the ban on
employment which was in force within the period.
e. When MDAs collect and spend revenues directlyi.
They commit an act of misappropriation
ii. The amount of revenue available to government is reduced.
iii. The potential share of the State from the Federation Account
is reduced as one of the indices for revenue allocation is
revenue effort measured by IGR.
f. The expenditure on security during the period was on the high side.
56
g. Funds were being misappropriated under the guise of security by the
Ministry of Finance, Accountant-General’s Office, Bureau of
Internal Affairs and Special Services, Government House and Local
Government Councils.
h. The diversion of the SURE-P funds was illegal
i. The issuance of the two bonds was characterized by irregularities:
i. Due process was not followed in the conduct of floating both
bonds while there was absolute lack of transparency in the
utilization of the proceeds therefrom.
ii. The former Governor was required to forward to the Benue
State House of Assembly (BNHOA) and Securities and
Exchange Commission (SEC) the audited accounts of the
State Government as a critical requirement for perfecting the
issuance of the bonds but this document was neither prepared
nor tendered to the regulatory bodies. Moreover, the former
Governor was legally required to submit a schedule of
milestones for specific projects to be funded from the bonds
proceeds to SEC but this was never done.
iii. The ISPO against the Federal Allocation to the State places a
great burden on the future finances of the State.
iv. The issuance of an ISPO raises doubts as to whether it was a
bond or a long term loan.
57
v. Conflicting information regarding the date of issuance,
amount of the bond and the bond proceeds of the last bond
further confirms the irregularities associated with this bond.
vi. The purported cost of issuing the last bond was unreasonably
high representing 19.3% of the amount to be raised by the
bond as the rate normally ranges between 3% and 5%.
j. The Commission appreciates that the 23 Local Government Areas
in the State are constitutionally created and their Administration
constitutionally guaranteed under section 7 of the Constitution of
the Federal Republic of Nigeria 1999 (as amended). Strangely the
Bureau has been exacting managerial control over these Local
Government Councils especially in their financial independence
beyond the provisions of the Local Government Law and Joint
Account and Allocation Law. The Bureau virtually relates with the
Local Government Councils like her viceroy or departments making
direct deductions from their respective allocations for virtually
everything including repairs of Council electricity generating sets,
printing of calendars, purchases of rice etc, thereby crippling their
relative independence.
10.3 Recommendation
The Commission recommends as follows:
58
10.3.1 Government should take deliberate steps to reduce the cost of
governance and waste associated with observed high cost of recurrent
expenditure.
10.3.2 Comment
Government notes the recommendation.
10.3.3 Recommendation
The e-payment payroll system currently in use should be enhanced
with effective control mechanisms that will prevent and detect acts of
abuse and/or manipulations.
10.3.4 Comment
Government notes the recommendation.
10.3.5 Recommendation
The on-going screening and bio-metric verification exercise should be
executed thoroughly to eliminate ghost workers and capture genuine
ones. This exercise should be extended to all MDAs particularly the
State Universal Basic Education Board (SUBEB).
10.3.6 Comment
Government notes the recommendation.
10.3.7 Recommendation
59
Government should endeavour to release overhead allocations
regularly and timely to MDAs.
10.3.8 Comment
Government accepts the recommendation and observes that the absence of
overhead allocation to Ministries/Departments/Agencies (MDAs) stalls
Government business.
10.3.9 Recommendation
All revenues collected by MDAs should be promptly paid into the
Single Treasury Account. Special concession should, however, be
given to agencies which depend on the revenue they generate for their
daily operations (e.g. hospitals).
10.3.10 Comment
Government notes the recommendation.
10.3.11 Recommendation
The terms and conditions of the appointment of the Executive
Chairman of BIRS should be the same with that of other Chairmen
of the other Boards and parastatals in the State. The incentives
bonuses on revenue generated by BIRS beyond an agreed
benchmark should be shared among all the staff and not the
Executive Chairman alone. The calculation should be based on
actual revenues collected and not paper IGR. The Executive
60
Chairman should not act simultaneously as a Consultant to the
Board.
10.3.12 Comment
Government accepts the recommendation.
10.3.13 Recommendation
Government should observe the existing laws and regulations on
cash transactions.
10.3.14 Comment
Government notes the recommendation.
10.3.15 Recommendation
Monies meant for security should come through the Bureau of
Internal Affairs and Special Services only, which has the vote for
security. There should be a limit on the amount spent on security
for every month except where there are special circumstances to
exceed the said limit.
10.3.16 Comment
Government notes the recommendation.
10.3.17 Recommendation
Specialized funds should be strictly applied for the purpose
earmarked.
10.3.18 Comment
Government notes the recommendation.
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10.3.19 Recommendation
The Accountant-General should ensure that all remittances are
supported by proper approvals.
10.3.20 Comment
Government notes the recommendation.
10.3.21 Recommendation
Due process should be observed in the award and execution of all
contracts.
10.3.22 Comment
Government notes the recommendation.
10.3.23 Recommendation
Government should devise effective strategies to ensure that loans
and leases are properly managed and recoveries/payments made as
at when due.
10.3.24 Comment
Government accepts the recommendation and directs the Ministry of
Finance and the Ministry of Industry, Trade and Investment to evolve such
effective strategies.
10.3.25 Recommendation
62
The new management of BIPC should immediately carry out a
detailed investigation into the utilization of the N1Billion proceeds
of shares retained in the Company.
10.3.26 Comment
Government accepts the recommendation.
10.3.27 Recommendation
The constitutionality of the Local Government system and their
administration guaranteed by the Constitution should be respected.
The exacting financial control of the Bureau over the Local
Government Councils and chairmen should abate and their
independence be honored.Local Government as the third tier of
government in Nigeria should be allowed to enjoy the freedom of
action to enable it perform its constitutional functions unfettered
and energise sustainable development from the grassroots but
recognizing that they do not have absolute autonomy.The Bureau
should resist direct control of the LGAs but assist in areas where the
Local Governments are lacking professional competence and render
technical assistance to them.
10.3.28 Comment
Government notes the recommendation.
10.3.29 Recommendation
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The Commission recommends the immediate introduction and
issuance of Personal Subhead Numbers (PSN) to all Local
Government staff including teachers and staff of SUBEB to check
and block salaries padding and leakages.
10.3.30 Comment
Government accepts the recommendation and directs that necessary steps be
taken to forward a Bill to the Benue State House of Assembly for
amendment of the Local Government Law in the State to accommodate
issuance of Personal Sub-Head Numbers to all Local Government Staff
including teachers.
10.3.31 Recommendation
There should be immediate integrity evaluation of the staff in the
accounts departments of SUBEB and the LGEAs followed by a
general reshuffling.
10.3.32 Comment
Government accepts the recommendation and directs the Ministry of
Education, Science and Technology to implement.
10.3.33 Recommendation
Government should ensure that it sends visitation panels to all
tertiary institutions as stipulated by the law establishing them.
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10.3.34 Comment
Government notes the recommendation.
65
Chapter Eleven
11.0 TERM OF REFERENCE X:
Establish Misappropriation (if any), and identify the person or
persons involved.
Findings
11.1 The Commission found that the entire budgetary provisions were
constantly jettisoned during the life of the administration.
Consequently, several cases of misappropriation were established by
the Commission.
Specific cases of misappropriation, persons involved and the basis of
the Commission’s conclusions are detailed below:
11.1.1 Illegal deductions of Local Government funds – Local Government
funds were by law required to be shared to statutory bodies in the
following manner: Primary School Teachers (43%), Local Government
Pension (15%), Local Government Councils Personnel emoluments,
Training funds for Local Government Service Commission (1% of
Local Government’s statutory allocation), funds for services common
to all Local Governments Councils, funds for servicing of Joint
Account (1% of statutory allocation). Other intervening funds such as
VAT, Excess Crude, Budget Augmentation, were to be applied as
counterpart funds for Joint Agricultural and Infrastructural
66
Development Projects by the State Government. Any other deduction
required to be deliberated upon and approved at JAAC meetings.
Before the said JAAC meetings, the Commission further found that
Governor Gabriel Suswam was said to have vetted and approved all
proposals for deductions and payment on the spreadsheet for JAAC
allocation. However, the Bureau between 2010 and May, 2015 under
Messrs Samuel Ode and Solomon Wombo as Special Advisers, Messrs
Emmanuel Atini and Asen Sambe as Permanent Secretaries and Mr.
Isaiah Ipevnor as the Accountant, made several deductions from the
Local Government funds that were neither in line with the law nor
approved by JAAC as such observed deductions were never mentioned
anywhere in the minutes of the JAAC meetings for the period. These
deductions were made and payments purportedly made to various
MDAs, corporate bodies, lawyers and individuals amounting to billions
of Naira.
11.1.2 Observations
The Benue State/Local Government Joint Account (JAAC) is supposed
to be a zero balance account. After each meeting the entire amount
standing to the credit of the account should be shared to the statutory
and authorized beneficiaries. This was however not the case in the
operation of the account within the period under review. Credit and
debit balances were observed in the account throughout the period.
67
Persons Involved Basis of Conclusions
Dr. Gabriel Suswam
Hon. Solomon Wombo
Hon. Emmanuel Atini
Mr. Asen Sambe
Mr. Isaiah Ipevnor
Refer to:
CW19 in vol.1 . Exhibit 131
CW70 in vol.1 . Exhibit 327
CW71 in vol.1
CW56 in vol.1
CW51 in vol.1.
11.1.3 Recommendation
a. All deductions from the JAAC must be in accordance with the law.
b. Any other deduction should be deliberated upon and approved at
the JAAC meetings. And such deductions must be supported by the
individual Local Government Council resolution.
11.1.4 Comment
Government notes the recommendations in paragraph 11.1.3 (a&b).
11.2 It was also found that amounts contained in the monthly JAAC Schedule
of payments for Local Governments were eventually not paid to the Local
Government Councils as there were huge discrepancies between JAACagreed
amounts per Local Government Councils as contained in the
monthly JAAC payment schedule and the actual amounts which were
paid to the respective accounts of the Local Governments as contained in
the bank payment schedules. This shortfall amounted to
N51,559,859,968.40 between January 2010 and May 2015 as shown in
Table 5 of this report.
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Meanwhile, huge cash withdrawals amounting to over N43billion of Local
Government Councils were made from the Local Government Joint
Account (JAAC) 2017241513 domiciled with First Bank almost on a daily
basis as contained in Table 2 of this report. In most of these transactions,
the payee (Detso, Agbo or Ndera) simply endorsed the cheques and
submitted them at the bank as if payment had been made and returned to
their offices without collecting the cash. Thereafter, an unknown person
would come to the Bank and collect the cash at the instruction of the
Accountant, Mr. Isaiah Ipevnor. There is no evidence that these
withdrawals were used for Government purposes.
Persons Involved Basis for conclusions
Dr. Gabriel Suswam
Hon. Solomon Wombo
Hon. Emmanuel Atini
Mr. Asen Sambe
Mr. Isaiah Ipevnor
Refer to:
CW19 in vol.1
CW70 in vol.1
CW71 in vol.1
CW56 in vol.1
CW51 in vol.1
CW54 in vol.1
Exhibit 131
Exhibit 327
Table 5 of this report
Exhibit 134 (appendix 1&2)
Table 2 of this report
69
11.2.1 Recommendation
The following named persons should jointly and severally refund the
entire N51,559,859,968.40(fifty-one billion, five hundred and fifty-nine
million, eight hundred and fifty-nine thousand, nine hundred and sixtyeight
naira, forty kobo)to the State Government: Dr. Gabriel Suswam,
Hon. Solomon Wombo, Mr. Emmanel Atini, Mr. Asen Sambe and Mr.
Isaiah Ipevnor.
11.2.2 Comment
Government accepts the recommendation and further directs that Dr. Gabriel
Suswam, Hon. Solomon Wombo, Mr. Emmanuel Atini, Mr. Asen Sambe be
prosecuted, Mr. Isaiah Ipevnor be dismissed from the Civil Service and
prosecuted.
11.2.3 Recommendation
Moses Detso, Agbo O. Agbo and Moses Ndera should not be assigned
any responsibility in government involving finance.
11.2.4 Comments
Government rejects the recommendation in paragraph 11.2.3. Government
directs that Moses Detso, Agbo O. Agbo and Moses Ndera be dismissed from
the Civil Service as their continued stay will pollute the service.
70
11.3 Illegal deductions of Local Government funds for payment into
ALGON account - At the JAAC meeting of July 2009, a standing
monthly deduction of N2million from each local government council
amounting to N46million monthly was approved by the JAAC.
However, some excess deductions were illegally made and paid into
ALGON account for cash withdrawals which have not been accounted
for. The deductions paid into ALGON account amounted to
N4,230,953,000.00 (four billion, two hundred and thirty million,
nine hundred and fifty-three thousand naira) between July 2009 and
May 2015.
Table 11.1 shows details of authorized and unauthorized withdrawals
by the various operators of the ALGON account.
NAME OF
OPERATORS
TRANSACTION
PERIOD
ACTUAL
TOTAL
WITHDRAWAL
(N)
AMT
APPROVED
BY JAAC (N)
UNAUTHOR
I-ZED
WITHDRAW
AL (N)
1. Hon. Augustine
Avaan
2. Mrs. Owakoyi
Eghiaruwa
08/5/09 -
2/2/11
1,440,516,000 732,000,000 708,516,000
1. Hon. David Sevav
2. Hon. Andrew
Ayande
3. Dr. Innocent Onuh
2/2/11 -
26/5/12
1,510,100,000 552,000,000 958,500,000
1. Hon Iyoryue Yajir
2. Hon. Terfa Bossua
26/5/12 -
5/12/12
538,996,000 0.00 538,996,000
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NAME OF
OPERATORS
TRANSACTION
PERIOD
ACTUAL
TOTAL
WITHDRAWAL
(N)
AMT
APPROVED
BY JAAC (N)
UNAUTHOR
I-ZED
WITHDRAW
AL (N)
1. Hon. Kester Ikyenge
2. Alex Ogaba
05/12/12
- 13/4/15
2,036,720,000 322,000,000 1,714,720,000
1. Jonathan Torkuma
Kunde
2. Yina Terzungwe
Samuel
14/1/15 -
19/5/15
248,821,000 0.00 248,821,000
1. Donald Kertyo
2. Sunday Mark Eche
20/5/15 -
27/5/15
153,400,000 0.00 153,400,000
TOTAL 5,928,553,000 1,927,600,000 4,230,953,000
All these amounts were withdrawn cash and taken away without
accountability.
a) It is worthy of note that even the N46million approved monthly
payment to ALGON was simply misapplied principally by the
Special Adviser and some Chairmen of ALGON.
b) Curiously, aggressive withdrawals were observed on the bank
account of ALGON at the twilight of the past administration
including a sweeping transfer of N20million from the account to
one M/S Ralista Ventures for an unknown purpose by Donald
Kertyo and Sunday Mark Eche.
c) The Special Adviser was totally in charge of the ALGON account
especially during caretaker dispensation. During the caretaker
dispensation, ALGON did not function as an association.
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Signatories to the account were appointed by the Special Adviser,
Mr. Solomon Wombo and acted as his agents.
Persons Involved Basis for Conclusions
Hon. Solomon Wombo
Mr. Emmanuel Atini
Mr. Asen Sambe
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