Thursday, October 31, 2013

Concerns Persist Over Nigerian Aviation Ministry

With Six Bulletproof Cars, Duty Waivers, Concerns Persist over Cost

31 Oct 2013
Nigerian ThisDay

•BMW could face questions under FCPA, Bribery Act
•Cars imported for sports festival were later resold

By Onwuka Nzeshi and Omololu Ogunmade

What is the actual cost to Nigerian taxpayers of the two BMW bulletproof cars and other armoured cars ordered by the Minister of Aviation, Ms. Stella Oduah, in the face of air accidents occasioned by poor capacity and meagre resources in the nation’s airworthiness regime?

This is the question that came to the fore when the Nigeria Customs Service (NCS) Wednesday revealed that the two BMW bulletproof cars purportedly bought by the Nigerian Civil Aviation Authority (NCAA) for Oduah were imported into the country duty free and with the approval of the Office of the National Security Adviser.

The Customs Comptroller General, Alhaji Abdullahi Dikko, made these disclosures at the resumed sitting of the House of Representatives Committee on Aviation, which is investigating the controversial transaction.

The disclosure by customs is coming on the back of new startling revelations that were made in another probe conducted by the Senate Committee on Aviation into the operations of the airline industry that the Federal Airports Authority of Nigeria (FAAN) also bought four armoured cars, two of which were for Oduah. The other two were procured for the Managing Director of FAAN, Mr. George Uresi.

Of the four cars procured by FAAN, two Lexus armoured limousines were said to have cost N60 million each, while the cost of the remaining Toyota Prado armoured cars was yet to be disclosed.

With the new information that has been brought to the fore, concerns have been expressed by customs sources over why the armoured cars, which ordinarily would have attracted 35 per cent duty, but were granted waivers, were still bought by both government agencies at such astronomical costs.

In particular, lawyers informed THISDAY yesterday that given the fact that Coscharis Group, which is the duly authorised dealer of BMW cars in Nigeria has been cited in the scandal, the German auto manufacturer could face questioning in the US under the Foreign Corrupt Practices Act (FCPA) that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.

In 2012, Japanese firm Marubeni Corporation paid a criminal penalty of $54.6 million for FCPA violations when acting as an agent of the TKSJ joint venture, which comprised Technip S.A., Snamprogetti Netherlands B.V., Kellogg Brown & Root Inc. (KBR), and JGC Corporation.

Between 1995 and 2004, the joint venture won four contracts in Nigeria worth more than $6 billion, as a direct result of having paid $51 million to Marubeni to be used to bribe Nigerian government officials.

Also, BWM stands the risk of being investigated under the Bribery Act, a UK far-reaching legislation that covers the criminal law relating to bribery and corruption.

During the House probe yesterday, the Customs Service also informed the Aviation Committee that the armoured cars were part of a fleet of 300 cars for which the Federal Ministry of Finance granted import duty waivers in November 2012.

The comptroller general, who was represented at the public hearing by the Deputy Director, Modernisation, Research and Economic Reforms, Mr. Manaseh Jatau, said the waivers were originally granted to the Lagos State Government in respect of vehicles to be used during the 18th National Sports Festival, Eko 2012.

According to the customs, the import duty waiver was granted on the understanding that Coscharis Motors would be the importer of the vehicles. Jatau told the panel that the import duty on the 300 vehicles amounted to N10 million.

He explained that such waivers were usually for a period of one year and that the Nigeria Customs cleared the cars within the period stipulated under the law.

The financiers of the car purchase, First Bank of Nigeria, said it merely financed a car loan scheme for the management cadre of the NCAA.

Mr. Seyi Oyefeso, who gave testimony on behalf of the bank, said issues about the cost of the vehicle were a matter for the NCAA and the car vendors, Coscharis Motors.

In his testimony, Chairman of Coscharis Group, Mr. Cosmas Maduka, denied any underhand deals in the transaction, insisting that it followed due process.

In an apparent outburst of emotions, Maduka said a lot of negative things had been said about his organisation because of this transaction, which had undermined his reputation as a businessman and his organisation.

He said the insinuations that his company inflated the prices of the cars and might have been involved in money laundering were politically motivated.

He challenged those who doubted the deal to make direct enquiries to BMW in Germany which would give clarifications on the bulletproof vehicles.

Some members of the House Committee on Aviation had insisted that the vehicle were sold above the market price.

But Maduka explained that there was no fraud in the duty waiver and NSA’s clearance because Coscharis had a memorandum of understanding (MoU) with the federal government on such imports for special events.

He said usually, his company would provide cars for such public events from its stock, while processing the ones for which waivers had been granted by the government.

Some committee members also raised concern about the apparent discrepancies between the particulars of the vehicles contained in the NSA’s approval letter and the particulars of the vehicles they saw at the Abuja airport when they went on oversight as part of the investigations.

The Coscharis team swore that all its cars had valid documents and was prepared to tender them before the panel.

At yesterday’s hearing, Oduah was again absent. A letter from the Permanent Secretary in the ministry, Dr. George Ossi, said Oduah was still in transit on her way back from Israel and was expected to touch down last night.

Chairman, House Committee on Aviation, Hon. Nkeiruka Onyejeocha, said the committee would give her up till 10 am today to appear and present her own defence in the transaction.

According to Onyejeocha, the appointment will be the final given by the committee as it would not be sitting on the matter after today.

She said while nobody was under trial, the extensions already granted were to give all parties the opportunity of a fair hearing on the matter.

Meanwhile, two other agencies in the aviation sector yesterday told the Senate Aviation Committee that they were not involved in the purchase of the armoured vehicles.

This came with fresh revelations that FAAN bought 202 more vehicles, which might not have necessarily followed due process.

While appearing before the Senate committee yesterday, Director General of the Nigeria Metereological Agency (NIMET), Mr. Anthony Anuforom, and his counterpart in the Accident and Investigations Bureau (AIB), Captain Muhtar Usman, asked the committee to leave them out of the car scandals, insisting that they were not involved in the transaction.

However, Senate Committee Chairman on Aviation, Senator Hope Uzodinma, pledged that the probe of a range of scandals in the aviation sector would be thorough with a view to ensuring that the sector is salvaged from the mess in which it is currently enmeshed.

Uzodinma made this promise yesterday while formally confirming the purchase of armoured vehicles by FAAN, of which two were meant for the embattled minister.

However, Uzodinma who told journalists yesterday that Senate would get to the root of the matter, also disclosed that FAAN bought as many as 202 other cars.

“Investigation is still ongoing and it will not be fair for me to pre-empt it. FAAN did confirm that among the operational vehicles they purchased, four of them were armoured vehicles, two for the managing director and two for the minister.

“We told them to go back and put everything in writing and make a comprehensive statement on all vehicles purchased, that they bought a total number of 202 vehicles for different operations. So until they come back on Monday, we cannot rush into conclusions.

“The MD of FAAN said they did a funding arrangement with a commercial bank.
“This investigation will be a very deep one so that at the end of the day, we will take a holistic approach and look at how the sector will be repositioned so that all anomalies will be corrected,” he said.

Also yesterday, the Senate stepped down the final passage of the Social Housing Bill meant to aid the provision of mass housing for low-income earners, citing faulty procedural and legal technicalities in its proposed implementation.

Chairman, Senate Committee on Housing and Urban Development, Senator Bukar Abba Ibrahim, while presenting the report, said its passage would offer poor Nigerians the opportunity to own houses without stress.

He also said various sources of funds from the private sector had been identified for the take-off and sustenance of the scheme.

The bill was however sent back to the housing committee for further legislation following remarks by some senators that its passage would create a legal and procedural crisis that could affect its implementation.

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