Wednesday, April 23, 2014

How football officials steal millions from cash-strapped Nigeria Premier League

Published:

Davidson Owumi, former chairman of NPL board.

While the federal football league struggled through years of crises, officials fed fat on its available funds

While the Nigeria Premier League suffered from constant bickering and perennial lack of funds to run its operations, officials made sure they steal as much as possible of the little funds available to the league while owing clubs and offering shambolic organisation for Nigeria’s local league, a recently released audit report of the NPL has revealed.

Officials routinely lament that the league is grossly underfunded, but as they do so, they also made it a point to allocate to themselves huge sums of money despite claims of the league’s insolvency, the external audit of the league’s management for year ended June 30, 2012, says..

To hold an annual congress, the NPL’s board solicited and got financial assistance. Critical projects are suspended due to paucity of funds while staff are owed bonuses. Yet officials live large, paying themselves outrageous emoluments and retaining large, expensive apartments in our capital city,

After exhausting the goodwill of the league’s bankers with unresolved loans, the board’s directors went obtaining credit wherever one was available. A huge chunk of the loan are spent on frivolous, unaccountable purposes, the document revealed.

Once, the league officials took loans from an unregistered microcredit firm, auditors say, and at another time, they borrowed up up to N5.4 million from an individual under questionable terms.

The audit report’s verdict was damning: As officials hypocritically complained of frustrating shortage of funds to run the league well, they made sure there was more than enough funds to service their lavish lifestyles, even as the league snake through one crisis to another.

The audit

The review, carried out by Olaniyi Wale Odunaiya and Co., and submitted to the Premier League in September 2012, documents abuses that unfolded at the NPL within one financial year up to June 2012, but provides a portrait of a trend that seems to have lasted years.

The report accuses the NPL officials of pocketing millions of naira belonging to the league, and cornering some through fronts while subverting regulatory procedures, and doing nothing to block excesses.

For seasons, the report says, the NPL officials operated a board that consistently returned losses and indebtedness, and failed to move beyond insolvency.

Yet, defying economic sense, and stipulated regulations limiting perks to only moments of robust financial standing, the board members, as they wished, paid millions to themselves as allowances, took and repaid loans records and maintained luxury accommodation in Abuja.

Former chairman of the board, Davidson Owumi, who was removed in controversial circumstances in December 2010, repeatedly got loans whose deployments could not be justified, the auditors said. Once he got a N15 million donation from the Bayelsa State Government, but remitted only N10 million.

Besides enjoying self-allocated monthly imprest (an advance or a loan of funds) of N300 thousand, Mr. Owumi paid “financial assistance” to himself totaling at least N1.7 million.

The amount, accumulated in tranches of N200 thousands, N300 thousands, was no loan. It was not meant to be repaid, it was just to “assist” the chairman, the report says.

His vice chairman, Shehu Gusau, at the time, paid N1.2 million to himself as car maintenance allowance in less than one year.

“The risk is that the chairman uses his position on the board to selfishly use the company’s funds to run private life without considering the financial health of the company,” the report noted on the “financial assistance’ to the chairman.

An expensive NPL board

The audit notes that while the crises festered, financial recklessness mounted within the league’s board.

For the period under review, the report said, the board spent 23 per cent of the total revenue received by the NPL on themselves. The sum, totaling N63.46 million, was deployed to servicing the board’s meetings, the members’ allowances for monitoring matches, and payment to their aides.

“Considering the fact that the board of Nigeria Football League Limited/Nigeria Premier League is a supervisory board, this board seems the most expensive in the whole world,” the report said.

While the organization complained of cash, the chairman and the secretary were on a monthly imprest of N300 thousand and N250 thousand respectively.

Similar to the “security vote” collected monthly by Nigerian governors without reconciliation, the imprest was founded on a curious provision in the NPL financial regulations allowing for such grants for top officials, and sparing them the burden of accounting how the funds were spent.

“The imprest shall cover petty expenses for telecommunication, entertainment, fuelling of vehicle, petty office and public relations and hospitality etc,” the stipulation says.

It affirms that “this vote is attached to the office and the officer has the right to expend it as he so wishes for effective running of his office and is not under any compulsion to retire such funds.”

Still, the policy cautioned that the funds could only be accommodated “when the offices is liquid enough.” But in reality, despite the often crushing lack of funding, at least as the league officials claim, imprests were among the first paid to the board chairman and other beneficiaries monthly.

Even more, board members maintained six units of three bed room apartments in Abuja at an annual rate of N12 million with an extra N4 million used for maintenance, a decision the auditors said reflected poor financial judgment.

The Lawyer’s fees

The report also found the board to have paid questionable a N150 million to its lawyer for the preparation of a contractual agreement with telephone company and league sponsor, Globacom limited.

From start, the auditors say, it was clear to the board members the agreement was defective as it failed to protect the NPL sufficiently from losing due revenues from Globacom in future. Yet, instead of seeking remedial actions, or even a legal sanctions against the company for negligence, the legal firm was rewarded with extra N44 million.

“There is a risk that the law firms had been care free in their professional duties to the company because they are been used as an avenue to defraud the league,” the audit said.

The incriminating details prompted a query from the NFF, seeking specific and “unambiguous” explanations “within a week”. Suspension orders from the NFF, on the board members, were rebuffed by the board which has for years resisted the federation’s supervisory powers over it.

NPL responds

But in the response to the audit queries, the NPL, then headed by another Chairman later removed in controversial circumstances, Victor Baribote, defended the payments to its lawyers claiming the amount paid covered a period of four years-between 2006 and 2010- being the duration of the Globacom contract-the lawyers prepared.

The board cited how the phone company defaulted and the same lawyer instituted a case against it and obtained judgment in favour of NPL.

But it directors would not muster such explanations, even if untrue, to the allegation that the former chairman, Mr. Owumi, received N15 million as sponsorship donation for the NPL congress in Yenagoa, and pocketed N5 million. Even so, the board posted N28 million as expenditure for the meeting.

In its reaction to the query, the former board did not contest that fact, but merely denied the amount was meant for sponsorship. The amount was “in support” of the congress, not sponsorship, the board said.

In all the deals suspected to have been fraudulent, and many more, records were rarely kept, and transactions were carried out in physical cash, not cheque-strong pointers of willful intention to obliterate traces to ease fraud, the auditors argued.

An example was a N5.4 million paid by the board to a certain Ben Agary as a purported loan repayment. The NPL officials claim the sum was received in cash and immediately utilized to prosecute week 35 matches for the 2010/2011 season.

But auditors said there were no records showing same and suggested the recipient was a front for defrauding the NPL.

The use of cash for questionable deals replicated elsewhere with what seemed the biggest relating to television rights charges paid by Total Promotion limited, a marketing firm for telephone company, MTN.

Auditors only traced N115.36 million leaving a balance of N38.14 million. When questioned, officials of the NPL claimed the amount was cleared in cash, leaving no traces how it was disbursed or preserved.

While the irregularities flourished, officials manifestly received gifts from business partners they were supposed to maintain fair relationship with. Often times, the favours came from parties taking part in bid for rights.

“Acceptance of gift from business partners started when the first chairman of the company accepted a Range Rover jeep from the chairman of Globacom Limited, subsequently the company has had problems in collecting title sponsorship revenue from Globacom Limited,” the report said.

The chairman referred to is Oyuiki Obaseki, the former boisterous chairman of the board who was also removed in controversial circumstances.

Mr. Owumi, and his then vice chairman, Mr. Gusau, were also found to have accepted a Mercedes Benz R class and Mercedes Benz C Class from Total Promotion Limited, the MTN front that has been embroiled in fierce legal confrontation over title rights against Globacom.

The audit suspects the cars, alongside other freebies, influenced the NPL board members’ decision to choose Total Promotion over Globacom.

Their responses

Mr. Owumi told PREMIUM TIMES he was later vindicated by the same auditors who purportedly acknowledged their computations were flawed in a subsequent report. He would therefore not comment, he said, claiming the report had been overtaken by events.

He also declined to make available a copy of the purported new report.

Olaniyi Wale Odunaiya and Co, the audit firm, also declined to comment on the alleged contradictions between the initial indicting details and the supposed disclaimer.

Head of the audit firm, Wale Odunaiya, said information related to the NPL audit, can only be released with the authorization of the league.

“We are on a contract and we’ll only release answers or information to the questions asked if we get a directive from the NPL,” he said. He, however, did not deny the details documented in the first report, available to PREMIUM TIMES.

Spokesperson for the Nigeria Football Federation, NFF, Demola Olajire, too, refused to comment on the findings first released late 2012.

For a league embedded in series of crises, many involving the NFF which should somewhat serve as a supervisory agency, Mr. Olajire cautiously backed away.

“I have nothing to say about any past NPL chairman, in fact, I am not interested in anything concerning the NPL, even though I work for the NFF,” he said.

The progress

The Nigerian Football Federation seems determined to ignore the damning report indicting various past officials of the league management, and instead proceed with the premier league, which is yet to commence its 2012/2013 season due to multiple crises.

After the controversies that led to the exit of the former board of the NPL, led by Mr. Baribote, the NFF have appointed an interim management for the league body, led by former lawmaker, Nduka Irabor.

Through the direct intervention of the Minister of Sports, Bolaji Abdullahi, the sponsorship of the league has also been settled with Globacom getting the nod over MTN in a deal that sees the former pay an undisclosed sum to the latter.

The 2012/2013 season of the league is expected to start in February.

Download the audit report here.

 

 

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