Massive fraud stalls NLC, Kriston-Lally housing scheme, leaving thousands stranded

A blame game is now playing out at the Nigeria Labour Congress [NLC] headquarters in Abuja, but, that’s far from what thousands of workers who subscribed to the NLC-Kriston Lally Affordable Housing Scheme had envisaged.

When they responded to public advertisements by the NLC inviting prospective homeowners to buy into the scheme, their desire was a roof over their heads they could call their own. With NLC’s pedigree and assurance, thousands staked their fortunes.

Today, the hopes of thousands of subscribers have dissolved into despair. No appeal by the central labour leadership for their patience would assuage their pains. Their concern is one: how their investments, most of which came from their life-savings, could be recovered.

“My only attraction to subscribe to the project was the association with NLC,” a distraught Abiola Lukman, one of the subscribers to the housing scheme, told PREMIUM TIMES Wednesday.

According to Mr. Lukman, a private businessman, he saw the flier promoting the scheme in September 2013, and was instantly attracted to it.

“The offer was irresistible,” he said. “Contribute 10 per cent of the value of your choice house, by December 2014, you are handed the keys to your new house, while you settle in to pay off the outstanding balance over two to 10 years at an interest rate of 6 per cent per annum.

With that, Mr. Lukman mobilized his entire savings totalling about N900,000, to pay for a three-bedroom bungalow.

Now, for over a year and four months, neither the house, nor the money, is forthcoming.

“If Nigerians cannot rely on the credibility of NLC, who else would Nigerians turn to for hope?” Mr. Lukman, 37, lamented, almost in tears.

Like over 3,269 others, Udo Iloh, Country Head, Open Society Initiative for West Africa, OSIWA, Nigeria Office, could also not disguise his anger and disappointment over the turnout of events.

“This is the height of disappointment that the NLC could be involved in this kind of arrangement where helpless workers have been scammed,” Mr. Iloh told PREMIUM TIMES in an interview. “People signed on to the scheme because NLC’s name was attached. If nothing happens and my money is refunded by the end of January, I will definite go to court over the matter.”

The Labour mass housing project

The scheme was launched during the May 1, 2013 Labour Day celebrations to construct about 300,000 new housing units to cater for workers’ housing needs nationwide.

The memorandum of understanding by the partners stipulated that NLC would provide the land for the project as well as ensure there were off-takers to subscribe.

The real estate developer, Kriston Lally PLC, was to take care of funding through financiers identified abroad; build the houses by providing designs and building plans as well as secure development approvals from the relevant authorities.

The various house types attracted different price tags, ranging from N4.6million for one to two-bedroom detached and semi-detached bungalows to N6.5million for three-bedroom bungalows, and N18.5million for four bedroom fully detached bungalows.

Subscription for each of the house types, which also included supporting infrastructure – roads, electricity, water, and other ancillary facilities — was to follow a repayment plan spanning 5 to 15 years, at a fixed interest rate of two per cent per annum.

Phase 1 of the project was for 100,000 units of houses to be completed by June 2014, for owners to take possession by latest December 2014. Another 200,000 units to be delivered on or before June 30, 2015.

The subscription process was simple. Prospective subscribers were to pick up the application forms and collect a personal identification number, PIN, after the payment of a non-refundable fee of N5,000 into the NLC-Kriston Lally EPC Project Account No. 1013399671 at Zenith Bank branches nationwide.

The subscriber would use the PIN issued by the bank to log online and complete the subscription form. After the payment of 10 per cent of the total value of the interested house type into the designated account, subscribers were issued official receipts at the presentation of the bank teller.

Besides, an invoice was also issued for the balance of 90 per cent, with a repayment chart, endorsement form and offer letter as well as formal contract as a subscriber.

Scheme oversubscribed

The response by prospective subscribers was overwhelming. NLC General Secretary, Peter Ozo-Eson, said the Congress was compelled to issue a stop to further collection of application on October 4, 2013.

He said both Zenith Bank and Kriston-Lally were duly instructed to ensure strict compliance to allow the developer to deliver on the first phase on schedule.

Unknown to Congress, Mr. Ozon-Eson said, the developer was still collecting applications from desperate subscribers, including several workers’ associations and individuals eager to be signed on.

According to the NLC General Secretary, these groups of subscribers were said to have been directed by representatives of Kriston-Lally to make their initial payments into private accounts other than the one in Zenith Bank advertised by NLC.

While awaiting the take-off of the project, the General Secretary said the Congress came across a number of subscribers who had demanded the refund of their deposits.

The demand for refunds may have come after it emerged in June 2014 that the Department of Development Control in the Federal Capital Development Authority, FCDA, had not given approval to the land purportedly allocated for the project.

Media reports said at the time that the Karsana South District, Abuja, touted as one of the locations for the project, was actually not allotted to the Congress as claimed, but to another estate developer, which planned to develop the area for other purposes.

Mr. Ozo-Eson said it was in the course of processing the requests for refunds that some bank tellers were found bearing details of deposits made into an account different from the one advertised by the NLC.

Worried by the finding, Mr. Ozo-Eson said a decision was taken that the NLC President, Abdulwaheed Omar, would henceforth be a joint signatory to the account with the Managing Director of Kriston-Lally, Mustapha Madawaki, to guarantee the security of subscribers’ deposits.

A whiff of a scam

With concerns mounting following months of delay for construction to commence on the project, Mr. Ozo-Eson said Kriston-Lally kept pressuring for a bank guarantee to enable its financiers transfer the agreed funding for construction. For months, a request to Zenith Bank for the guarantee failed. A similar request to Access Bank was later approved.

To facilitate the issuance of the bank guarantee, Access Bank demanded adequate funding of the account. Consequently, he said the Congress was compelled to issue a cheque jointly signed by the two signatories to transfer N2.5billion from Zenith Bank to fund the Access Bank account.

Few weeks after the transfer, the NLC scribe said Access Bank contacted Mr. Omar’s office seeking confirmation to pay a cheque for N51million.

Alarmed, the NLC president, who was abroad then, promptly denied knowledge of any such transaction. He directed that the payment be withheld till he returned.

Back in Nigeria, Mr. Omar sent for his co-signatory in Kriston Lally to accompany him to Access Bank to demand explanations for the pending cheque.

At the end, Mr. Ozo-Eson said it became clear that the developer was, indeed, behind the illegal attempt to withdraw N51 million from the account using a forged signature of the NLC President.

To reassure himself that the Congress’ account at Zenith Bank at Area 8, Garki, Abuja was intact with the balance, the NLC President rushed to demand the statement of account on it.

Initially, the bank again refused to honour the request, till Kriston Lally consented to it as the second signatory to the account. A review of the document uncovered startling revelations.

According to Mr. Ozo-Eson, at least six different transactions, totalling about N103million, were found to have been conducted under suspicious circumstances without the knowledge of the NLC President.

On his insistence to confirm the instruments used in drawing the monies, the NLC president’s signatures on all the cheques were found to have been forged.

Mr. Ozo-Eson said after he was confronted, Kriston-Lally owned up to the forgery, offering a verbal defence that the withdrawals were to “facilitate the process.”

However, he was said to have pleaded that the monies were not for him, rather for various persons who executed one job or the other in connection with the project.

Investigators called in

To get to the bottom of the scandal, the NLC General Secretary said the attention of the Economic and Financial Crimes Commission, EFCC, was initially drawn to investigate the case.

When it appeared the anti-graft agency was not forthcoming, he said the Congress opted to approach the authorities of the Directorate of State Security, DSS, which promptly moved in, arrested and detained Kriston-Lally MD, Mr. Madawaki, for interrogation.

At the end of its investigations, Mr. Ozo-Eson said the DSS reported that clear cases of fraud were established against the company and its officials who agreed to pay back the monies within three weeks.

He said the DSS, however, advised against a court action, to avoid the workers having to wait for a long time before getting a refund of their monies.

On that basis, an agreement was signed by all parties, witnessed by two representatives of the subscribers, for a secretariat to be set up at the Labour House to coordinate the process of refunds.

Kriston-Lally at large

In spite of the agreement, Mr. Ozo-Eson said Mr. Madawaki, in whose custody were all instruments relating to the transaction, including the cheque books and details of all the dealings with the banks, failed to show up, stalling the entire refund process.

Processing subscribers’ documents had actually commenced as agreed, till when Mr. Madawaki was invited to sign the relevant instruments to the bank for the transfer of some money from Zenith Bank to Access Bank for payment to commence.

After more than three weeks, frustrated, the NLC, which was becoming inundated with protests by anxious subscribers, said it wrote to the DSS on December 19, 2014 to draw its attention to the sudden disappearance of Mr. Madawaki.

“We are anxious to have the refunds effected. But, we cannot do so, because we are not holding the money. Until we get Kriston Lally to cooperate with us, there is little we can do. That is why we are asking the DSS to intervene expeditiously,” Mr. Ozo-Eson said on Wednesday.

The Congress is still awaiting the response of the security agency to the letter on the way forward, he said.

On allegations that payments were made into illegal accounts, Mr. Ozo-Eson said the Congress was clear in its directive in the advertisements that payments be made into only the NLC-Kriston Kally Projects Accounts at Zenith Bank.

He said the NLC did not administer any forms. Rather, subscribers collected and filled the forms from the Kriston Lally’s office.

“We are also working with relevant agencies to explore ways of ensuring subscribers who may have been manipulated into paying into other accounts are protected,” he assured.

But, Mr. Iloh of OSIWA dismissed such claims as untenable. With the deposit teller and offer letters issued to subscribers, he said the issue of payment into a fake account did not arise.

Kriston-Lally trades accusations

No official was available at Kriston-Lally’s office at No, 46 Lobito Crescent, Off Adetokumbo Ademola Crescent, Wuse 2, Abuja when PREMIUM TIMES visited on Wednesday.

Calls to the company’s known telephone numbers, to clarify issues on allegations of forgery and fraud levelled against the company, equally did not go through.

But, recent media reports had quoted the Group Managing Director of the company, Mr. Madawaki, as accusing the NLC of failure to play its role in line with the terms of the MoU signed by both parties towards actualizing the project.

Mr. Madawaki accused the NLC of failing to provide land for the project as it committed to doing.

According to Mr. Madawaki, despite failing to provide the land for the project as agreed, the NLC also frustrated his company’s efforts to pay for land in Karsana, Apo and Gosa areas of Abuja for the project.

“NLC came out in strong terms to reject the Apo plots that they were “AMAC awarded.” The payments made were based upon a direct agreement between me and the NLC President, who later denied knowledge of and claimed I had forged his signature,” Mr. Madawaki was quoted by Daily Trust newspaper as saying.

He is said to have instituted a legal action against the NLC and the DSS seeking reimbursement for all costs, and monies invested by Kriston Lally in the project.

“The NLC basically scammed us either as part of one of their political games, or so that certain NLC leaders could benefit personally from the project,” Mr. Madawaki alleged.

But the NLC told PREMIUM TIMES that land claim cannot stand now as every aspect of the project was stalled after the congress established a clear case forgery and fraud. NLC therefore lost confidence in Kriston Lally, Mr. Ozo-Eson said.


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