Published On: Fri, Sep 20th, 2019

$9.6bn judgment debt: P&ID UK, Nigeria affiliate guilty of fraud, court rules

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  • Orders assets forfeited to FG
  • Conviction vindicates Nigeria’s stand-AGF

By Vivian Okejeme, Abuja

Justice Inyang Ekwo of the Federal High Court, Abuja, yesterday, convicted and ordered the winding up of Process and Industrial Development Limited and its Nigerian affiliate, P&ID Nigeria Limited.
In the judgement, justice Ekwo, also ordered the forfeiture of “the assets and properties” of the two firms to the Nigerian government.
The order is sequel to guilty plea of the defendants, for charges of fraud and tax evasion in respect of the contract leading to the recent controversial judgment of a British court empowering the firm to seize about $9.6bn worth of Nigerian assets.
The two firms, through their representatives, pleaded guilty to the 11 counts instituted against them by the Economic and Financial Crimes Commission(EFCC).
The Commercial Director, Mohammad Kuchazi, represented by P-ID Limited incorporated in British Virgin Island while P&ID Nigeria Limited was represented by Adamu Usman, who is also a lawyer.
Kuchazi was represented by his lawyer, Dandison Akurunwua, while Usman represented himself.
The prosecution agency said the accused, among others things fraudulently claimed to have acquired land from the Cross River State Government in 2010 for the gas supply project agreement which led to the $9.6bn judgment.
The contract for gas supply and processing (GSPA) was signed by the administration of late President Umaru Yar’Adua and P&ID.
The company was to build gas processing facilities around Calabar, Cross River State, and the government was to supply wet gas up to 400 million standard cubic feet per day.
The agreement, defined wet gas as “associated gas removed, during oil production, having a propane content of not less than 3.5 mol per cent and a butane content of not less than 1.8 mol content, compressed and delivered via pipeline to the site.”
In turn, the company “shall operate and maintain the GPFs (gas processing facilities) on a professional basis to ensure a regular supply of Lean Gas (approximately 340 MMSCuFD) for power generation.”
Lean gas, defined as “pipeline quality gas having a composition of not less than 95 mol per cent of methane and ethane,” was what the government was to take after supplying wet gas for processing by the company.
After the defendants pleaded guilty to the 11 counts, an EFCC investigator, Usman Babangida, was called to the witness box for review of facts which was not opposed by the defence.
Documents relating to the controversial 2010 gas supply contract and EFCC’s investigation activities were tendered and admitted by the judge as exhibits without objection from the defence.
The judge then went on to pronounce the two firms represented by the two men guilty.
Making an allocutus, plea for mercy, P&ID’s lawyer Akurunwua, urged the judge to consider “the forthrightness and candour” of P&ID by pleading guilty and not wasting the time of the court in the trial.
In a swift reaction yesterday, the Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN), said with Thursday’s conviction of Process and Industrial Developments Limited for fraud by the Federal High Court in Abuja, the liability of $9.16bn awarded in its favour by a British court can no longer be enforced.
The British court in August 2019 affirmed the arbitral award of $9.6bn against Nigeria for alleged breach of a Gas Supply Project Contract reached between the Federal Government and P&ID in 2010.
The Federal Government alleged that the contract was rooted in fraud and subsequently instituted charges against the company, which was incorporated in British Virgin Island, and its Nigerian affiliate, P&ID Nigeria Limited.
According to the AGF, “The implication of today’s conviction is that Nigeria has a judicial proof of fraud and corruption as a foundation of the relationship that gave rise to a purported liability in the arbitral award.
“A liability that is rooted in fraud and corruption cannot stand judicial enforceablity Nigeria now has a cogent ground for setting aside the liability. Where Nigeria is expected to review its strategy in view of unfolding developments as it relates to conviction of some of the suspects that have admitted fraud and corrupt practices in the transaction that gave rise to purported award.”
He said, “Nigeria is meeting with is legal consortium early next week in UK in preparation for the case listed for 26th September.”

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