According to internal data of the Panama-based offshore-provider, Mossack Fonseca, obtained by the German newspaper Süddeutsche Zeitung and shared by the International Consortium of Investigative Journalists (ICIJ) with PREMIUM TIMES and over 100 other media partners in 82 countries, Mr. Dangote, his relative, Sayyu Dantata, as well as his business allies have over the years used shell companies domiciled in controversial tax havens in their business transactions.
The unprecedented year-long investigation involving 11.5 million secret documents – which stretch from 1977 to December 2015 – expose the hidden underground of the world economy, a network of banks, law firms and other middlemen that utilize shell companies, sometimes using them to hide illegal wealth.
The 2.6 TB files, involving 214,488 entities, also reveal hundreds of details about how former gun-runners, contractors and other members of the spy world use offshore companies for personal and private gain.
The investigation unveiled the cloak of secrecy provided by Mossack Fonseca, a Panamanian law firm that specializes in creating offshore companies, some of which have been used by con men and women to hide Ponzi schemes, predatory lending scams, and other financial frauds from their victims and from the authorities.
Mossack Fonseca has, however, in a statement to ICIJ denied wrongdoings, saying, as a registered agent, it merely helps incorporate companies, and that before agreeing to work with a client in any way, it conducts a thorough due-diligence process, “one that in every case meets and quite often exceeds all relevant local rules, regulations and standards to which we and others are bound.”
Mr. Dangote and the game of shares
Mr. Dangote, alongside his half brother, Sayyu Dantata, the founder of MRS Holdings (a leading West African oil-marketing firm, which acquired Chevron-Texaco’s downstream assets in 2007) bought equal shares of 12,500 each from OVLAS S.A, a shell company registered in Seycheles, on October 6, 2003.
Seychelles is a well-known tax haven used by businessmen and politicians and celebrities to perpetrate shady business deals. On the same date also, a company they both own as at 2003, MRS Oil and Gas Co. Limited bought 25,000 numbers of shares from OVLAS S.A.
According to the documents, three years after they existed as shareholders of the company, the trio – Dangote, Dantata and M.R.S Oil and Gas Company Limited – ceased to be shareholder in the company. That was on April 12, 2006.
But in an arrangement that seems curious, Mr. Dangote was issued a higher amount of shares – 250,000 – on the same day he resigned.
In the same manner, his brother, Mr. Dantata, was issued the same amount of 250,000 shares. That means the businessmen simply resold the shares back to themselves. Their company, MRS Oil and Gas, was re-issued 500,000 shares.
After three years of holding the shares, they all ceased to be shareholders. Again, they resumed possession of the shares again as in the previous time, but this time it seems Mr. Dangote sold his shares to Mr. Dantata and M.R.S Oil and Gas Company Limited.
Mr. Dangote ceased to be shareholder permanently on July 6, 2009, and Mr. Dantata’s amount of shares doubled to 500,000 shares while MRS Oil and Gas CO, LTD retained its 500,000 shares. Documents show Mr. Danatata never sold, transferred his shares or ceased to be a shareholder till date.
Petrowest S.A: Same folks, same tricks
Before Mr. Dangote ceased to be shareholder of M.R.S Oil and Gas Limited, himself, Mr. Dantata and their co-owned company, M.R.S Oil and Gas Co. Limited, was used to buy shares in Petrowest S.A, another company registered in Seychelles on October 6, 2003.
Messrs Dangote and Dantata bought equal shares of 12,500 each from Petrowest S.A. MRS Oil and Gas Co. Ltd also bought 25,000 numbers of shares from Petrowest, just as was done with OVLAS S.A.
Again, three years after they existed as shareholders, the trio – Dangote, Dantata and M.R.S Oil and Gas Company Limited ceased to be shareholders in the company. That was also dated April 12, 2006.
Like in the case of Ovlas S.A, Mr. Dangote suddenly ceased to be shareholder. According to documents available to PREMIUM TIMES, on the same day, Mr. Dangote was re-issued a higher amount of shares – 250,000. In the same manner, his brother, Mr. Dantata, was issued the same amount of 250,000 shares. This literary means they resold the shares back to themselves. Their company MRS Oil and Gas was re-issued 500,000 shares.
Shady Petrowest and Ovlas name swap in Seychelles
A document seen by PREMIUM TIMES, reads “Republic of Seychelles, INTERNATIONAL BUSINESS COMPANIES ACT, 1994…Company No: 018606…
This is to certify that OVLAS SA. has changed its name and is now incorporated under the name of PETROWEST S.A. on this 27‘” day of April 2011. Given at Victoria, Seychelles.”
Differrent story with Petrowest S.A and Ovlas S.A in Panama
In a separate document, it was shown that while Petrowest swallowed Ovlas S.A in Seychelles in 2011, courtesy of the name change, Petrowest S.A Panama only bought 100 units of shares at $100 each from Ovlas to become shareholder in the company. That happened on October 12, 2012.
A web of intrigues, companies within companies
Specifically, Messrs. Dantata, Anil Kumar Ahluwalia and M.R.S Investments Company share same company address – Plot 6, Block 2, Osborne Road, Ikoyi, Lagos Island – in entities incorporated for them offshore by Mossack Fonseca.
The M.R.S Investments Companies mentioned earlier is a subsidiary of MRS Holdings.
Anil Kumar Ahluwalia, whose company name is Santosh Investment Limited S.A is connected to a Panama shell company called Lotus Trust Services Sarl.
Similarly, MRS Investments Company Limited is a shareholder company to Chalmers Shipping Incorporation, which in turn is directly connected to another shell company named Afrex Sal, also domicilled in Panama.
Afrex Sal is a client company for Mr Dantata and Dangote’s Ovlas Trading based in Monaco France. Ovlas Trading is co-owned by Sayyu Dantata and Patrice Alberti in the name of Ovlas Trading S.A., for 75 shares with a par value of US$ 100,00 each; and in the name of Karbelina Investments LLC, for 25 shares with a par value of USS 100,00 each.
Messrs Dangote and Dantata have allegedly used their multiple companies in Nigeria and other countries to secure huge loans. For instance in 2010, the management of Bank PHB, a Nigerian bank, dragged M.R.S Holdings Limited, owned by Mr. Dantata, to court over the non- payment of Fifty-Eight million dollars ($USD 58M) loan the bank granted it to purchase Chevron Texaco in 2008.
In a similar development in September 2014, Sani Dangote, younger brother to Mr. Dangote, was dragged before a Federal High Court in Lagos over his alleged failure to liquidate about N5 billion loan granted him by Union Bank.
In its suit, Union Bank alleged that in a bid to evade payment of the loan, Sani Dangote made efforts to deplete funds in his accounts by diverting them to Dubai, Canada and Switzerland.
A dark corridor
Shell companies constitute some of the darkest, sometimes convoluted, corridors in global illicit finance. Shell companies are usually domiciled in notorious tax havens like Cayman Island, Monaco, Panama, Samoa, Switzerland, Luxembourg, Hong Kong, Singapore, Lebanon, Mauritius, British Virgin Islands, St. Lucia, Belize, Macao and close to a hundred others; usually tiny countries.
Owners create Shell companies for a host of dodgy business reasons. Some people own shell companies so that when they acquire assets like private jets and real estates, governments do not find out to demand tax. Some others set up shell companies to raise funds before starting operations, to attempt a takeover or as a front for an illegal business. The purpose (s) for which Mr. Dangote and his allies set up their own secret companies is not exactly clear. But shell companies are not illegal, and not all owners use them to avoid tax or hide assets.
However shell companies are at times used for tax avoidance. This they do through Transfer Pricing, a complex structure that allows businesses often in Third World countries to shift profits to shell companies overseas to allow them pay little or no tax in the country where they made the money.
Evidence abounds in the data that the Panamanian company, Mossack Fonseca, offers clients aggressive “reinvoicing” services that are specifically designed to help companies avoid/evade taxes. It remains unclear whether Mr. Dangote and his associates used their shell companies to buy any such service from Fonseca. Many people using offshore companies do so legally and offshore companies indeed have many legal purposes.
Shell companies, experts say, are entities that have no active businesses and usually exist only in names as vehicles for another company’s business operations. In essence, they are corporations that exist mainly on paper, have no physical presence, employ no one and produce nothing. They are frequently used to shield the identities of owners and/or to hide money.
Because shell companies are at times associated with fraud, their activities are of big concerns to international bodies such as the Organisation for Economic Co-operation and Development (OECD).
Money laundering, billing schemes, fictitious service schemes, bankruptcy fraud, tax evasion, and market manipulation are some of the fraudulent activities facilitated by shell companies, several past investigations by ICIJ and this newspaper have shown.
Given that they at times have nominee directors, often have no phone number, no e-mail address, no physical address, no company logo, no contact person and no federal identification number and because the host country deliberately did not collect enough ownership information on company formation documents, there are usually no paper trails for law enforcements to trace back to a particular individual or individuals in most financial investigations.
More actors uncovered
Using data-mining techniques and working in collaboration with a global network of investigators with access to secret databases, PREMIUM TIMES was able to uncover several Nigerian business players associated with shell companies.
Among them are Sayyu Dantata, Aisha Dantata and Mariya Dantata who are listed as shareholders of Koggi Shipping Incorporation with registered location as Plot 688, No 4 Winnipeg Close Street, Maitama, Abuja, Nigeria. Mariya Dantata also has a registered location at Plot 70, Sharada Industrial Area, Phase 3, Kano, Nigeria.
In addition, Sayyu Dantata owns a total of 25 million units of shares in Corlay Global S.A, a company that is a client to Afrex Sal and also located at Plot 70, Sharada Industrial Area, Phase 3 Kano, Nigeria.
A few other other allies of Messrs Dangote and Dantata were also flagged as shareholders in the shell companies used for their Panama deals. They include Ola Rosiji, a shareholder of Excalibur Holdings Services Incorporation; and Alex-Duduyemi Oyekunle, a traditional chief known as the Aro of Ife Kingdom.
Mr. Oyekunle is a shareholder of Sunnigdale Assets, S.A, a company that also shares same registered location with MRS Holdings Limited at Plot 70 Sharada Industrial Area, Phase 3 Kano, Nigeria.
MRS Holding particularly popped up regularly as multiple shareholder company for other companies linked to Messrs Dangote and Dantata in Panama.
Corlay Global S.A. and SID Holdings Group are among other companies owned by MRS Holdings and Dantata. They are Afrex S.A clients in Panama.
It is a similar story in Seychelles, an archipelago of 115 islands in the Indian Ocean off East Africa, where Afrex S.A and Bulldog Global Financial Services LLP act as client for Mr. Dangote and Dantata’s companies. Documents show that Sayyu Dantata owns 250,000, 125,000 and 50,000 share units in PetroWest S.A., Paseo Trading Limited, and Arkinton International Limited respectively.
Other business allies who are shareholders in companies located at Plot 70 Sahrada Industrial Area, Phase 3, Kano, Nigeria, include Ayokunu Tajudeen Sowemimo and Arjun Thadani.
Mr. Arjun Thadani controls 2,500 units of shares in Mitarj International Corporation, a client company to USA Corporate Services Incorporated (New York), which also operates from Seychelles.
On his part, Mr. Sowemimo owns 15,000 share units in Capital Development Solutions Limited which is a client company to Orion House Services (HK) Limited operating in Samoa. Samoa is one of the various countries used as tax havens by large corporations.
Dangote and a business of secrecy
A 2015 investigation by PREMIUM TIMES, in partnership with French Daily, Le Monde , the International Consortium of Investigative Journalists, and a host of other major media organisations around the world, had named Mr. Dangote among some of Nigeria’s wealthiest industrialists, former government officials and their relatives, who operated highly secretive foreign accounts with the Swiss branch of banking giant, HSBC.
Some of those named in that global investigation were found to have concealed their identities for years and using codes perhaps to shake off tax authorities from accounts, some of which held illicit assets from criminals, traffickers, arms dealers and other outlaws.
That investigation, published in February last year showed how HSBC profited doing business with people who stole from their countries and some of the world’s most notorious con artists, including people who made a fortune fuelling wars in Africa.
The bank helped questionable characters conceal their wealth despite knowing their sources, and devised ways to hide the identities of the owners of the secret accounts from governments around the world.
At least 100,000 secret bank account operators who owned about $100 billion were exposed in the leaks, unsettling investigators in several countries.
Among those accounts were that of Mr. Dangote, who became an HSBC private account client in July 2003. The account appeared in the name of Development Projects Corporation, its registration address in Tortola, in the British Virgin Islands, a notorious tax haven, where individuals and corporations usually incorporate shell companies to hide assets. Mr. Dangote’s account was in operation till August 2004.
It is not clear to what use Mr. Dangote put the account and perhaps because he closed it long before the data were stolen, bank records did not indicate any balance on the account.
Our hands are clean – Dangote Group
Despite several documents linking Mr. Dangote to those offshore companies, the businessman’s spokesperson insisted he never had any relationship with the offshore entities.
The spokesperson for the Dangote Group, Tony Chiejina, in response to enquiry by PREMIUM TIMES, said, “Thank you for your enquiry concerning our alleged relationship with the following off shore companies namely: Paseo Trading Ltd, Seychelles; Petrowest S.A.,Seychelles; SID Holdings Corp, Panama and Chalmers Shipping Inc, Panama.
“I wish to state categorically that neither Aliko Dangote nor Dangote Industries Ltd (DIL) has any form of relationship with these alleged four off shore companies. The Group has four quoted companies on the Nigerian Stock Exchange and we cannot afford to tarnish our reputation or conduct our business in an unethical manner given this profile.
“Our reputation is paramount to us and we are conscious of the downside of it. We thank you for upholding the principal ethics in journalism – ‘when in doubt, check’.
Mr. Dantata could not be reached. The contact numbers listed on MRS Holdings website failed to connect the several times our reporter called.
We’re not liable for crimes by companies we register
Mossack Fonseca, the company behind the registration of the shell companies, said it does not direct the companies it incorporates for its clients and therefore cannot be held liable for the uses to which the firms are put.
“Filing legal paperwork to help incorporate a company is a very different thing from establishing a business link with or directing in any way the companies so formed,” Carlos Sousa, the company’s public relations director, said in a statement to ICIJ.
“We only incorporate companies, which just about everyone acknowledges is important, and something that’s critical in ensuring the global economy functions efficiently. In providing those services, we follow both the letter and spirit of the law.
“Because we do, we have not once in nearly 40 years of operation been charged with criminal wrongdoing. We’re proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it.”
The African Network of African Reporting Centres (ANCIR) contributed reporting for this story.