Reps Accused Of Political 'Victimisation'PART of the updated recommendations of the House of Representatives Ad Hoc Committee on monitoring subsidy regime is that indicted oil marketers and government auditors, including the accounting firms of Akintola William, Deloitte and Olusola Adekanola & Partners be sanctioned.While some of the indicted fuel importers and marketers (some of whom were re-invited and are billed to appear before the Committee) should individually refund specified amounts, the services of the accounting firms should discontinued.The House Committee on Petroleum Resources (Downstream) should also conduct an extensive and thorough investigation into the operations of the petroleum Equalisation Fund Management Board in order to ascertain the management of the bridging fund under the subsidy regime.But the 'accused' are not taking some of these indictments lightly. They are fighting back with 'facts and figures.'A Season Of AdvertorialsFrom 'The Accused''AS advertorials poured in last week with threat of an impending litigation, the House of Representatives was forced to soften its position; it gave some of the indicted firms and individuals additional two weeks within which to present their case. The House was also said to have cleared Zenon oil and Gas from the 'subsidy scandal.'Zenon, Friday night, stated that it 'accepts the clearance by the House of Representatives.' For the avoidance of doubt, Zenonnever participated in the subsidy regime or PSF scheme and shouldnever have been grouped among companies that participated.Zenon accepts the explanation by the House that it was done in error and the subsequentclearance on the floor of the House by the Chairman of the Ad-hoc committee, Hon. Lawan Farouk, during the televiseddebate ofthe probe report on Tuesday April 24,2012.'Also at the weekend, a constitutional lawyer and human rights activist, Chief Mike Ozekhome (SAN), restated the accusation that the House was trying the marketers without fair hearing.Ozekhome, who is a counsel to some of the affected oil marketers, had said he would file a case after being properly briefed by his clients.In a telephone interview, the lawyer said he could not disclose whether he would still file the case before the end of the two-week 'grace' or thereafter, as that would amount to disclosing his strategy. His clients, he said, would also need to direct him on when he should make the move.Ozekhome said: 'Such indictment that is devoid of fair hearing cannot stand the test of fairness even before God who gave Adams and Eve fair hearing in the Garden of Eden. I do not support corruption; I am one of those who have been clamouring for the removal of oil subsidy on the ground that we cannot continue to subsidise corruption, inefficiency and leakage in the oil and gas.'But the facts must be clear that in penalising a group or company or individual, there must be fair hearing' The House of Representatives put their report without reaching out to the indicted marketers to make their case.Asked whether he believed some of his clients were culpable, he said: 'I cannot believe or disbelieve. I am a lawyer; I work with cold, hard facts. I have never believed a situation where people play to the gallery. I have always tried to be different by scrutinising and analysing issues before jumping into conclusion.'It is hearing that will afford the public the opportunity of knowing who has committed malfeasance and those who are innocent and separate the guilty from the innocent.'There are arguments that the call on marketers who had dealings with the subsidy fund to come forward for presentation is sufficient invitation supposing the indicted firms have nothing to hide.It's All About Politics' IheanachoHowever, Chairman/Chief Executive Officer, Integrated Oil and Gas Ltd, Emmanuel Iheanacho, said there is a political angle to the allegations raised against the oil marketers.'I feel very sad about what people are feeding the public with. We absolutely have nothing to do with the issue. I am surprised and I expected that they should have done their job thoroughly and get all clarifications.'The masses have the right to agree with the report if anybody steals their money but it is worse when you eventually find out that those who are accused are innocent. We have a contract with the Petroleum Products Pricing Regulatory Agency (PPPRA). Assuming the Agency does not have any problem with regards to the subsidy fund we have drawn, how can a third party that does not understand the substance of that contract start making allegations'The former Interior Affairs Minister alleged that some lawmakers might have started taking advantage of the probe to witch-hunt their political rivals.The probe committee recommended that Integrated Oil and Gas Limited refund N13, 252,055,429.00 in the belief that the company might have drawn funds in essence of what it is entitled to.But in a press release, the company stated: 'There is no evidence that we owe any refunds to the government, nor do we owe the 'imaginary' N13 billion so glibly reproduced in the context of the offending House of Representatives Committee report. 'We remain unequivocal in our assertion that we have not drawn any benefits from the subsidy regime other than the payment refunds, which are legitimately due to us. And such payments were invariably made on account of monies, which we have spent upfront on account of gasoline imports procured under the PPPRA's PSF programme.'In giving evidence before your Ad Hoc Committees Public hearing, our company attended to your enquiries with full co-operation, openly and publicly addressing any issue of interest to the Committee including a rendition of the full accounting for the volume and value of gasoline cargoes imported as well as the related cost reimbursements received from the PPPRA.'At no time during the course of the company's testimony or thereafter was the impression given that there was any discrepancy nor contradiction in relation to the presentation made, or in relation to a requirement to reconcile the figures, which we had presented. We still have records, which are open to review at any time by any interested and or competent authority.It states:All gasoline imports by Integrated Oil and Gas under the PPPRA's PSF scheme are subject to prior approval and documentation by the PPPRA.All gasoline imports by the company are subject to forex approval and documentation by the Central Bank of Nigeria (CBN).All gasoline imports by the company are subject to quantity validation by the sponsoring banks.All gasoline imports by the company are subject to quantity validation by the PPPRA, DPR and several inspection agencies on arrival and delivery into tank.The PSF refund payable in respect of any gasoline cargo imported by the company is calculated and approved payable by the PPPRA.All PSF refunds are approved by the Office of the Accountant General/Honorable Minister of Finance.The PSF refund due in respect of any gasoline cargo imported by Integrated Oil and Gas is documented and payable from the CBN.The PSF refunds payable in respect of any gasoline import by the company is payable directly to the sponsoring bank.Head of Corporate Affairs of Techno Oil Limited, Peterson Babalola, wondered why its company would be linked to the scandal when it just started participating in the importation last October. He admitted that many companies might have breached the rules but frowned at a situation where some innocent entities are being soiled by the scam.Mobil: We are Transparent, Ready To Appear Before The House CommitteeMOBIL OIL NIGERIA PLC, in absolving itself of corrupt practices, said: 'Mobil stands ready to appear before the committee or any other agency of government should it be invited. Our company has fully co-operated with the investigation into operations of the fuel subsidy scheme conducted by the Nigerian Senate and the Economic and Financial Crimes Commission (EFCC). The company also co-operated with the Federal Inland Revenue Service's (FIRS) review of the fuel subsidy scheme.'To the Senate, EFCC and FIRS, we submitted the required documentation to support our participation in the scheme as requested. In addition, as recently as November 2011, Mobil was invited and appeared before the House of Representatives Committee on Petroleum Resources (Downstream) for an interactive forum.'Mobil Oil Nigeria has strictly complied with the guidelines of the Petroleum Subsidy Fund as issued by the PPPRA and is not indebted to the Federal Government in any amount under the scheme.'Acorn: AllegationsAgainst Us Not TrueA source in Acorn Oil disclosed that the company had submitted all necessary documents required by the lawmakers, wondering why the company would be implicated in the scam.'We were present at the first hearing. Thereafter, we presented all the documents they requested. Whatever they said about us were not true, and we had to deny everything.'NNPC :We Did Not Receive N1.329trillion From CBN ''The management of the Nigerian National Petroleum Corporation wishes to state categorically that it did not receive the total sum of N1.329 trillion as subsidy payments over three years (2009-2011) from the Central Bank of Nigeria (CBN) as alleged by the Ad-hoc Committee of the House of Representatives on Subsidy Regime.'The committee established that NNPC deducted directed the sum of N408.255 billion (in addition to the payment of N81.648 billion by CBN in 2009, the sum of N407.801 billion (in addition to the payment of N402.423 billion by the CBN) in 2010, and the sum of N847.942 billion (in addition to the payment of N844.944 billion by CBN) for 2011 contrary to section 162 of the 1999 Constitution.This claim is totally false and without foundation.We wish to reiterate that subsidy payments to NNPC are not based on cash remittance and therefore CBN could not have remitted any cash to NNPC for the purpose of subsidy. The mechanics of subsidy recovery by NNPC is non-cash based, but by way of credit to NNPC against domestic crude cost due. When approval certificates are received from Petroleum Product Pricing Regulatory Agency (PPPRA) their values are deducted from domestic crude oil cost due in a given month after due consideration of what is approved.In addition, all such approvals and deductions are regularly copied to other relevant agencies of government such as Federal Ministry of Finance, Office of the Accountant General of the Federation, Budget Office of the Federation, Federation Accounts Allocation Committee (FAAC) and Revenue Mobilisation and Fiscal Allocation Commission.In the advice on subsidy deductions forwarded to FMF, NNPC always state 'in line with Government directives, the FMF should authorize the Accountant General of the Federation to source for the approved subsidy amount and transfer some to the Federation Account for onward distribution by FAAC.'It is therefore grossly inaccurate and misleading for the Ad-hoc Committee to claim that NNPC made 'double deduction' by deducting subsidy at source and simultaneously receiving payment for the same purpose from CBN. The conclusion by the Committee of double payments to NNPC obviously accounts for the erroneous and outrageous sum of 'N2,587.087 trillion' (N2.587 quadrillion) as total subsidy payment for 2011 as stated on page 83 of the Report.NNPC believes that this was a very serious and important assignment for the Nation for the purpose of 'verifying and determining actual subsidy requirement'and put to rest the issue of subsidy once and for all. It is unfortunate that the wide allegations, suppositions and conjectures, which form the basis of their conclusion, actually did more damage to the objectives than verify subsidy requirement. Furthermore, such reckless allegation is capable of inciting the public against the Corporation and its personnel.NNPC therefore calls on Federal Government of Nigeria, the security agencies and all well meaning Nigerians to demand full disclosure on this allegation in order to set the records straight. In this context, the Ad-hoc Committee should disclose the source of this data, and such source must disclose to the Nation the demand not for the payment, the account to which the amount was paid and the purpose for which the money was expended and by whom. If this not done, the story of subsidy in Nigeria would never be closed.We Release Funds On Finance Minister's Approval'Accountant General'The OAGF believes that it is not fair to hold it accountable for accounts it never operated or managed. It is equally wrong to hold it accountable for making payments of equal installments of N999 million for a record of 128 times within 24 hours on the 12th and 13th of January, 2009, totaling N127.87 billion when the payments instruments were not issued by it. It is also considered inappropriate to accuse the OAGF of not disclosing the beneficiaries of the oil subsidy as it did not relate or deal with any of them. All these are the responsibilities of the PPPRA and not the OAGF.'It is also completely a gross error to ask OAGF to refund the sum of N213.678 as it did not make payment to oil subsidy beneficiaries but the PPPRA as well as asking it to explain overpayment of N146.746 billion (2009), N421.197 billion (2010) and N1, 025.353 billion (2011) as it did not make any payment to the NNPC. The OAGF also considers it absolutely unjustifiable to ask it to explain the refund of overpayments by oil marketers to the tune of N2.766 billion and N5.76 billion as it is not its responsibility to collect any refund from them but that of the PPPRA.'How the Committee Goofed, By Accounting Firm'The attention of Olusola Adekanola & Co, Chartered Accountants and Tax Practitioners has been drawn to items 36 and 37 of the General Recommendations of the Ad hoc Committee of the Federal House of Representatives on oil subsidy probe report where our firm was allegedly indicted for 'professional incompetence' and purportedly 'blacklisted from being engaged by any Federal, Department or Agency (MDAs) for a period of three years.''We are at a loss as to the circumstance that gave rise to such a recommendation and would like to state here the facts of our involvement in the oil subsidy claim process. Our firm was appointed on April 29, 2011 by the Ministry of Finance to verify and re-compute claims submitted by independent oil marketing companies on the Petroleum Subsidy Fund (PSF) for a 12-month period starting from the date of validly signed assignment. We commenced the assignment on June 10, 2011 following the signing of an agreement on June 2, 2011.'The PPPRA usually notifies us of identities of vessels carrying PMS to be verified in batches and reports of our verification/inspection and recomputed subsidies (under-recovery or over-recovery) are submitted under the same batch numbering system to the Budget Office of the Federation for action. The verification/inspection of every batched vessel is usually carried out jointly with representatives of PPPRA, DPR, Nigeria Navy, NPA surveyors (GMO) and marketer's surveyor all of whom must sign the inspection reports for it to be acceptable for further processing.Highlights of the periodic reports submitted during the ten (10) months of our engagement are as follows:' We reported several cases of excess claims, which could result in over payment to some, identified marketers.' Consistently reported the exclusion of NNPC PMS laden vessels from inspection by independent auditors and even their subsidy claims from verification.' Reported on non-compliance of some identified marketers and their consignments with the prescribed pre-importation requirements.' All discrepancies, processes, and practices that are non-compliant with statutory requirements for importation as well as international best practices were duly reported.Knightsbridge: We Don't Import Fuel Without Forex From CBN ' Solicitor, Olasupo Ati-John'THE House of Representatives Ad-hoc Committee on Monitoring of Fuel Subsidy Regime as reported in some national newspapers.Our Client is deeply pained, embarrassed and disparaged by the grievous allegation made against it by the report relating to importation of fuel without obtaining FOREX from the CBN as contained in several newspapers.Based on the damaging embarrassment this unfounded allegation has done to our client's enviable business integrity and hard earned reputation built over about 20 years, we have the instructions of our Client to respond to the allegation as follows:' That is every transaction involving PMS importation, Knightsbridge Limited has always and consistently adhered religiously to due diligence and observed proper compliance with the guidelines, regulations and procedures prescribed by PPPRA, DPR and CBN.' That all the transactions of importation of fuel carried on by Knightsbridge between 2010 and 2011 were lawfully carried out and same can be validly established vide financial documentary evidence including but not limited to Approved Valid for FOREX FORM 'M,' LC, Proforma Invoices, Notification of Vessels Arrival, letters of Shipment Notification etc. All these Import documents were submitted at the Committee hearing.' That all the foreign exchange used in all Knightsbridge Limited transactions involving importation of fuel between 2010 and 2011 were properly bid and financed for by their bankers.' That Knightsbridge Limited has been operating successfully in the oil and manufacturing sectors of the economy with impeccable service and untainted records.' That all the facts relating to our Client's transactions involving importation of fuel between 2010 and 2011 as herein provided are verifiable facts which can be confirmed with their bankers on request.A-Z Petroleum: Case Against Us Is Misleading'Our attention has been drawn to a publication in the media to the effect that A-Z Petroleum Products Limited was purportedly indicted and ordered to refund the sum of N8.06B as a result of the fuel subsidy regime.'We wish to unequivocally state that the said publication, particularly as it concerns A-Z Petroleum is totally false, grossly misleading and a malicious attempt to embarrass and portray our company in bad light. We hereby emphatically state that we have over the years conducted our business in the most ethical manner and have never participated in any unwholesome practices.'We have decided to bring this clarification to the notice of the Nigerian public because we believe they have the right to know the truth. In the course of the probe on fuel subsidy we made available all necessary documents and information requested and we substantiated all our transactions. We also submitted all relevant documents in respect of our transactions to the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) as well as other agencies of government and they have not faulted them.'We further state that neither the Ad-hoc Committee nor the House of Representatives itself has ordered our company to refund the sum of N8.06B or any amount whatsoever as erroneously reported.'Techno Oil: We Did Not Receive Illegal Subsidies' Solicitor'As Solicitors, we have been instructed by Techno Oil Limited to respond to damaging reports making rounds in the newspapers linking the Company amongst other petroleum products dealers indicted by the House of Representatives Ad-Hoc Committee on Petroleum Subsidy Administration, for collecting illegal fuel subsidies from the government of Nigeria.Ordinarily, our Client would have dismissed these allegations as mere distractions warranting no answer, but in the circumstance, it is difficult to ignore a determined and calculated effort to tarnish and ultimately, destroy the hard-earned reputation and goodwill of both our Client and its principal officers.In the first place, the Company maintains that it was never at any time before, during or after the House Ad-Hoc Committee hearings, invited to answer for any matters related to the subsidy investigations. Techno Oil is therefore utterly surprised to learn that the Committee reported that the Company refused to honour an invitation to attend the proceedings.Again, we strongly deny any allegation that we collected subsidy refunds for petroleum products the Company did not import. In fact, Techno Oil states for the records that by the time the Ad Hoc Committee concluded proceedings the Company had not yet received any refunds at all from the Petroleum Products Pricing and Regulatory Agency (PPPRA). The question then is how could the Committee have arrived at the position that the Company collected the said illegal sum when indeed there was no information relating to Techno Oil before it
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