(GET N6 TRILLION WAIVER PRESIDENCY
CONNECTION LAGOS METROPOLIS IS NOT NECESSARILY BETTER THAN MUMBAI IN
INDIA. BUT THERE IS AN ALLURE IN NIGERIA THAT KEEPS THE VASWANI BROTHERS
COMING BACK EVEN WHEN THE COUNTRY FEELS IT HAS HAD ENOUGH OF THEM)
NIGERIA might not agree with India on
certain isms in religion, marriage, or politics. There is, however, a
language they both speak and understand in business and politics. That
is bakshish - the Indian word for bribery.
And the Vaswani brothers, the Indian
owners of the Stallion Group for the past three decades, have used it so
effectively that they are now one force to reckon with among the Asian
imperialists said to be controlling about 30 percent of Nigeria's
economy - thanks to globalization.
The Vaswani brothers now speak the said language as they face myriads of
fresh investigations into their business activities by several
institutions, including a National Assembly Committee, the Police, at
the Special Fraud Unit, SFU, of the Force Criminal Investigation
Department, FCID, States Security Services, SSS, and the Presidency.
These probes, like others, if sincerely and dutifully carried out,
may have a devastating outcome, including, but not limited to, the
likelihood of deportation of the Vaswani brothers, who have been twice
lucky. In the event of this deportation, it will be the third time in
eight years. The alleged crime has never changed; its dimension has
only got wider.
Sabotaging Nigeria
New Delhi believes that its nationals,
like the Vaswanis and other Indians in Nigeria, are actually
strengthening the economic tie between the two former British colonies.
Mahesh
Sachdeva, the Indian High Commissioner to Nigeria, gleefully declared
on May 1, 2012, that the bilateral business relationship between the
two third-world nations has grown to $16.4billion. But the slew of
sharp practices - which appear more like sabotage - trailing Sunil,
Haresh, and Mahesh Vaswani, has made the partnership a lopsided one.
Nuhu
Ribadu, former chairman of the once dreaded Economic and Financial
Crimes Commission, EFCC, knows how tightly these brothers have gripped
the veins of Nigeria's economy. He first ran them out of the country in
2002, but they clawed their way back. ''It is very glaring the nation
won't enjoy much prosperity, especially in the domestic economy, as long
as the Vaswanis remain in Nigeria,'' the former anti-graft czar once
reportedly lamented. Tongues in the presidency are wagging as feelers by
way of petitions reaching it allege that between 2002 and 2010, Nigeria
lost about N150.8 billion in over-invoicing, waivers abuse, and tax
evasion to the group's import business. But for some hunch, they would
have strung Nigeria along again in a N200 billion car importation
waiver proposal and N150 billion in the Badeggi, another rice deal
production nearly sealed by the Vaswanis and their Thailand
collaborators.
Something else that effectively cripples Nigeria's
economy in the manner they conduct their business is capital flight,
which results from repatriation of profits, in dollars, back to the
United Kingdom, Dubai, India and other countries where they have
businesses. A 2009 study of the Global Financial Integrity estimated
that Africa lost $903 billion that year, and about $800 billion
annually. Nigeria, according to the report, topped the losers' list.
NASS Digs in
Maybe
the deluge of petitions the seven-man Senate Committee on Privatisation
received on the alleged economic crimes of these Indians will be heavy
enough to confirm that the brothers hold Nigeria in the jugular.
Economic analysts have always argued that it will take some doing for
the country to really get industrialized with its current expansionist
import policy. The Stallion Group particularly appears more obsessed
with dumping goods on the economy. With its 15 subsidiaries and a
conglomerate of fronts in Nigeria, the group imports practically
anything from rides to rice. That is one way of keeping Nigeria a
perpetual consumerist nation, unlike India that is, to a large extent,
known for its booming technology, health exports and manufacturing.
The
Vaswani greed may have led to their latest scam in the acquisition of
the Volkswagen Nigeria Limited, VON. The Senate is already convinced
Nigeria has been short-changed in the sale of the company.
Very
revealing are the video clips of the Senate Committee's fact-finding
visit to the VON office in Apapa, Lagos, almost six years after sale.
The
vast premises of the former German-Nigerian auto plant are now a bonded
terminal, one of the three bonded terminals the group owns in Lagos.
That conversion of a key driver of an economy into a storage facility is
illegal, going by section 1 of the Memorandum of Association of the
automobile company.
What further throws more light on the shady
deal is the account of a 24-year old business romance gone frosty
between Kashim Bukar Shettima, owner of the Barbedos Group. Shettima, in
2006, bought Nigeria's 35 percent in Volkswagen for N612million,
shortly after the brothers, who also bid, were deported. Although they
were poles apart
after then, the bond remained fairly strong
between the Vaswanis and Shettima. “I made every effort to get their
return,” he asserted. The brothers had won the bid for N400million in
2003, but a rice importation fraud pitted them against former President
Olusegun Obasanjo who had to fling them out of the country. Yet Shettima
ensured the Stallion Group was running on autopilot until 2007, when
the late President Yar' Adua, after a business luncheon, brokered by
their Nigerian beneficiaries during his first visit to the United
States, okayed their come-back.
Their Mafian Style
But
the Indians came back with a vengeance. They had registered and
incorporated a Barbedos Virgin Island (BVI) in the UK, in February,
2005, with which they later partnered with Shettima's Barbedos, Nigeria
Ltd, as Overseas Partner, to acquire the remaining 35 percent Federal
Government stake in the company.
Petitioning the federal
government and the National Assembly, Shettima said the Vaswanis cheated
Nigeria by short-circuiting due process, under a company called Avolon,
to acquire Germany's 51 percent in Volkswagen. According to presidency
sources, it was a breach of the pre-emptive rights of the federal
government of Nigeria stated in section 151 of the Companies and Allied
Matters Act 1990.
The BVI, however, had their reason. The
National Council on Privatisation was aware of the under-hand deal. In a
letter dated August 25, 2005, Atiku Abubakar, former vice president and
chairman of the NCP, was informed by the Bureau of Public Enterprises,
under Irene Chigbue, to waive Nigeria's pre-emptive rights to acquire
the 61 percent shares of the German partners.
While Abubakar knew then that the Vaswanis had been banished from the country, he blinked over the BPE request.
Again
the debt of about DM 4 million that VON purportedly owed in Germany was
another point in favour of the Vaswanis. They claimed to have settled
up Germany, thereby making VON indebted to them. Shettima is, however,
strongly of the opinion, in some of his representations to the
presidency, that the credit arrangement was fraudulent because the
auditing firm that investigated VON debt profile, Robert Ade-Odiachi
& Co, said that the debt was non-transferable.
How they Bury Car Assembling Finally
Whichever
way the sale eventually swung, the BVI outwitted the Federal
Government, as always! And in that case, Barbedos Nigeria, to the
Vaswanis Shettima has always known, will be no great shakes. The BVI
worked it such that Shettima is now left clutching at 17 percent of the
share, right in the glare of the BPE, Corporate Affairs Commission, and
other regulators. While he is busy alleging sabotage and fraud, the
Vaswanis have turned the VON into a bonded terminal. Nearly six years
after, the plant still remains a shadow of itself. Some parts, covered
in the Senate Committee video, are empty; other sections, 24 of them,
warehouse vegetable oil, rice, fertilizers, and nine other products.
There are also about 30,000 cars and hundreds of containers bearing
imported goods on the premises. Given the necessary incentives, local
entrepreneurs could have been producing these goods to further stimulate
the economy. But the Stallion Group feels there is faster and bigger
buck to make as an import monopoly,
using such facilities for hoarding imports, than just grinding out 'beetles' in Nigeria.
It
wasn't always like this in the Nigerian auto industry. There used to be
three car assembling plants, and five heavy vehicle plants in the
country. And Obasanjo's idea of privatizing the VON, the only one
surviving, in the 2000s was to revive the industry, and lower the
prices. He made his concern known to the 40 industry stakeholders, led
by Ade Ojo, chairman of Elizade Motors, who met in Aso Rock on February
1, 2000. The Honda Place, responsible for the automobile aspect of the
Stallion Group, was not part of the meeting because of the Vaswani
notoriety in the industry. But at least the President came away with
some information: that the Vaswanis had been chiselling Nigeria through
under-invoicing, underpayment of duties, VAT, surcharge, mischievous
classification, and cargo diversion. Other malpractices of the brothers
include use of containers to import vehicles, unspecified description of
vehicles, and use of obscure ports. The Senate Committee on Industries
that dug into the allegations later stated in a report dated February
16, 2001 that Nigeria lost N10 billion to the Vaswanis in the process.
They merely got a slap on the wrist at the end of the probe.
Knowing What to Keep
What
gives the Vaswanis this unfair advantage is their ability to arm-twist
government for concession. They have been enjoying it over the years,
especially during the military era. As tight-fingered as Obasanjo's
administration was, it took a lot of resistance for him not to swallow
their bait on a rice production proposal. The list of concession the
Stallion Group requested include tax holiday, free land, zero duty on
agriculture equipment imported, and others. They, however, pushed things
too far in 2002 when they colluded with Thailand exporters. In a report
ENB/SEC Vol.1, 22 August, 2002, originating from the Nigerian embassy
in Thailand, detailed how pre-shipment inspection was used by the
Vaswanis to import 1.5 million metric tons of rice, the world highest
then, at little return to Nigeria. Shipment, supposedly inspected from
Thailand, would come in cleared. According to the Mohammed-Waziri-led
probe panel, N800 million was lost to the Vaswani crookedness. They took
off, like jack-rabbits, when Ribadu turned on the heat.
When
they were allowed back into the country in 2007, they brought along
their Thai friends, and coaxed the late President Yar' Adua into
accepting a proposal on rice farming. Nigeria was to plonk down
N150billion and give them land. They ran out of luck again when they
made another criminal move - clearing a vessel that was yet to set sail
from Thailand, a practice those who know them too well told this
magazine, is their stock-in-trade. Like a cat with nine lives, they
bounced back into the country.
And they have been having a swell time in Jonathan's administration since. Waivers and tax exemption are lavish.
Between
August and December 2010, Jonathan granted the group two waivers. In a
letter referenced BO/B10260/TUB/LA/156, the finance minister, through
the director of finance, Daniel Joel Tayelaiye, granted Energy Resources
Management Ltd, one of their fronts, waivers of import duty, ETL, CISS,
and other port charges' on 250,000 metric tons of imported rice.
Similarly,
ERM got a waiver for 250,000 metric tons of vegetable oil in December
and another 250,000 of the same commodity by Connotation Concept
Nigeria. As at February this year, the Vaswanis secured duty waiver for
another 250,000 tons of vegetable oil, enjoying similar concession. To
make a kill, ERM has continued to use the waivers all these years when
each could only last a year. Investigation shows that they have used the
500,000mt duty waiver which is 20,000; 20 feet containers to import and
clear double i.e 1,000,000mt or 40,000; 20 feet containers and most of
the cargo and containers are still lying in their various yards in
Lagos. Total duty waived was USD 220,500,000 (two hundred and twenty
million, five hundred thousand dollars) for the 500,000mt that is N
35.280 billion.
The London Meeting
In their
desperation to perpetuate themselves in the VON deal, the Vaswani
brothers split themselves to not only monitor but to also trail the
movements of some top government functionaries that are close to
President Jonathan.
They managed to trail two top Presidency
insiders first to Geneva, Switzerland and then London. It was in London
that they finally sealed the deal that robbed Shettima's Barbedos
Nigeria Ltd of his well deserved stake in VON.
With some other
close aides of Mr. President in their pockets, the brothers moved in on
full assault of Shettima's business, sealing off his warehouse premises
with containers in full glare of the public thus preventing him to take
delivery of his goods while they kept their own warehouses busy; loading
them with imported items such as rice, fish, iron rods and brand new
cars to mention a few.
To seal the fate of Shettima and to
prevent the expected backlash from the Senate committee on
Privatisation, as regard the VON matter, the brothers with the help of
the President's close associates sought the services of a two time
former Attorney General and minister of Justices. Kanu Agabi (SAN) to
seek relief from a Federal High Court in Abuja. Part of the relief was
to restrain the Senate Committee and the EFCC from hindering their
illegal operations in the country and also to foil any attempt to
rescind their ownership of VON in spite of their non-performance.
Hands in Gloves
These
businessmen have all the liberties because when they speak bakshish,
people listen. It will surprise few Nigerians that the Vaswanis are
being piggybacked into the country, after every deportation, by those
that ought to keep an eye on them. There have been allegations that
certain ministers, including a highly placed ex-NAFDAC official, are
sympathetic to the family. And Mohammed Adoke, attorney-general of the
federation, along with his predecessor, Michael Aondoakaa, isn't exactly
exonerated. The two kept the EFCC on a short leash anytime the
commission is after the Vaswanis. Adoke, for instance, ensured that the
EFCC looks to him for legal direction whenever taking a suspected
economic criminal to court. For instance, a summary, with a reference
number HAGF/SH/2010/Vol 1/32, was written to and received by the
presidency on May 25, 2010. There the Attorney General of the
Federation, AGF, recommended that the security agencies should respect
court judgement granting the Vaswanis relief against being deported or
arrested.
Adoke further counselled that the Federal Government
should also honour part of the court judgement which awarded a
compensation of N5billion to the Vaswanis. Adhering strictly to this
legal advice, President Jonathan reportedly released the said sum which
however found its way into the pockets of prominent Nigerians who are
business allies of the Vaswanis. National Standard investigation
revealed that between 75 and 80 percent of the hefty compensation was
shared among these highly respected Nigerians.
Also zealous about
shielding the Stallion Group and its owners are certain sources, mostly
chiefs of staff, within the presidency. Major General (rtd) A.
Mohammed, former chief of staff to Yar' Adua, used to play the
mother-hen whenever the EFCC hawk swooped on the Vaswanis. He nearly
pleaded for them in his letter entitled Re: Revocation of Deportation
Order to the EFCC, requesting the commission to review “these facts
(earlier listed) with a view to attaining justice to all parties”.
Similar letters, in an intercessory tone, were sent to the ministry of
interior and the office of the president to save their scalps. The
current chief of staff, Mike Oghiadomhe, as revealed in some documents
available to National Standard, equally watches out for the Vaswani
interest in Aso Rock. To pave way for their last return, the big shots
at the presidency argued that the return of the Vaswanis would assist
the EFCC conclude it's investigations into allegations of gross economic
crimes levelled against them. Checks by National Standard at the
anti-graft agency showed no sign of any investigation since their
return. "That is a no-go area," said a senior operative of the
commission who did not want his name in print. He however added that the
new leadership of the EFCC can only dare the Vaswanis if Mr. President
distances himself from the Indian-born businessmen. Going by some kind
of relationship tree, this magazine discovers it is just about six
degree, or less, separating Atiku from the Indians. They are familiar
strangers. Their path might have crossed when the former vice president
was a senior officer with the Nigeria Customs Service. And the
familiarity could only get better. Since their interests are always well
represented in Aso Villa, they drop in on any President any time. They
can flout their orders, too like they did NCP chairman, Vice President
Namadi Sambo's.
According to presidency sources, they cut the
second citizen of the country dead when he invited the warring VON
shareholders for negotiation. And Jonathan can't hammer them either.
He's morally bound to give their waivers proposal a favourable nod. The
Stallion business was said to be among the deep pockets that bank-rolled
Jonathan's campaign last year. That the BPE and CAC overlooked the
brazen forgery of seal, an allegation against the BVI in one of the
representations to the presidential committee of enquiry is more proof
the Vaswanis are omnipresent. It worries Industry watchers. “The report
was a confirmation of the earlier letter written to the CAC by the BPE
exonerating the Vaswani brothers and BPE of any wrong doing,” says one
of the concerned Nigerians watching the development closely.
Security Allies
The
biggest fan of the brothers is the Nigeria Customs Service, NCS. The
agency has never found any fault in the operations of the group over the
years. Even when the House Sub-Committee on Customs, headed by Hon.
Gummel Abdullahi, ordered the NCS to probe the company, following a
petition from the Automotive Marketers Association of Nigeria, the
result, as contained in a report marked NCS/INV/08/00/AB/HQ, gave The
Honda Place a clean bill of health. The Customs was also involved in the
Thailand importation scam where a shipload of rice yet to leave the
exporting country was already cleared in Nigeria. Although the Vaswanis
hoard their imported goods in an assembling plant, the NCS still
approved of it as a bonded terminal.
National Standard can reveal
that the Vaswanis in connivance with some Customs Officers imported
1,000,000mt (40,000 20ft containers) and the duty lost to the country on
this transactions amounts to N 70.56 Billion (seventy billion, fifty
six million naira). On the various criminal manipulation of the economy,
the Indians out of which carry British passports, will be carting out a
total income of N6.981 trillion (six trillion, nine hundred and eighty
one billion naira). The sales and import were in the name of Masco Agro
Allied Industries Ltd (Stallion wholly owned subsidiary).
One
can't just dismiss how much the chummy relationship between the NCS and
the Vaswanis has cost Nigeria. In 2007, former Finance Minister Esther
Nenadi Usman told Nigerians that the NCS was milking the country dry.
The
Nigeria Police, which often come under serious attack for their
corruption profile, appear not to be willing to miss out of the action.
While the case of shareholding dispute is in a Federal High Court in
Abuja, the BVI used its influence to purportedly seal-up the VON
premises, especially the part that belongs to their rival in the VON
ownership battle, with police officers.
The Vaswani controlled
warehouses, however, remain a beehive of loading and off-loading. As of
May 4, months after the Senate Committee mission, the police were on
guard as over 150 cars, out of the several thousand parked on the Apapa
bonded terminal were driven out to another of the Stallion Group
terminals in Lekki, beside Mercedes Benz, in Lagos. The security
agencies are believed to always be their friends.
The Vaswanis,
this magazine learnt, used them to cow the DANA Group and other
competitors when Tafa Balogun was Inspector General of Police, and also
due to overbearing influence by former VP. "So it would be music to the
ears if the cops didn't help the Indian business mafia cover their
track," another source wondered.
The Senate Committee would have to follow-up on its probe to rescue the economy from the Vaswanis.
Many
believe something, hopefully, may give at the end of ongoing
investigations as President Jonathan has reportedly warned that if there
is any established fact in the allegations of gross economic crimes
being perpetrated against the country by the Vaswanis, they may not be
third time lucky.
The Senate Committee is already asking for the
Share Purchase Agreement to be rescinded and re-advertised for
non-performance. The report also ordered the EFCC to examine the sleight
of hands used to cheat Nigeria out of its share, and the boardroom war
raging among the VON shareholders. While the tone of the committee
findings now may sound harsh, Sunil, Haresh, and Mahesh fear no evil.
They'll
get justice, and will be safer as soon as the EFCC is liquidated, going
by the recommendations of the Orosanye Committee on Public Service
Reforms. Or the panel report could also disappear -like thousands of
others before. For how long will those who have the responsibility to
protect and grow local content (including the Ibrahim Lamorde-led EFCC)
in Nigeria's efforts at becoming one of the top 20 industrialised
nations of the world by
the year 2020? The British, Indian and UAE
authorities and Nigeria's cannot claim ignorance of these economic
abracadabras being practiced by the Vaswanis; only time will tell
whether they would be brought to justice this time around.
Uncanny savvy
On
good authority, National Standard gathered that the brothers have
desisted from coordinating their operations from their registered
offices. The Indian staff in the Stallion Group, sources revealed, carry
the data for importation, supply and sales in their lap tops from where
they control the movement and delivery of these items.
The
reason behind this change of operation is none other than the need to
elude the officials of the EFCC who had a well structured raid on the
Vaswanis in 2002. To avoid a repeat performance of the well orchestrated
clampdown, the brothers resorted to keep every business detail and
operations mobile. The bank details are said to be also stored in these
laptops to the extent that no matter the invasion by security agencies
no incriminating information will be found. The strategy is also made
easy by the fact that they have their main operational bases in their
homes to which they hardly allow anybody access. They are again believed
to have a highly restricted office.
Sources within the banking
sector also disclosed to this magazine that about N130billion has been
borrowed by the Vaswanis from three banks (names withheld), using VON
premises as collateral while original title documents to the properties
are with Kashim Shettima, their rival, so how did they get the mortgage
and perfect it big? This may just be another case of high level forgery.
National Standard Intelligence will continue investigations to
establish the authenticity of these fresh allegations.
National Daily