#ParadisePapers: Nigeria’s central bank chief, Emefiele, Zenith Bank’s chair, Jim Ovia, in tax avoidance scandal

Godwin Emefiele and Jim Ovia
Godwin Emefiele and Jim Ovia

The Governor of the Central Bank of Nigeria, Godwin Emefiele, and the Chairman of Zenith Bank Plc, Jim Ovia, have descended into a major tax avoidance scandal in Europe following revelations that they most likely skipped the payment of about £11million value added tax while importing luxury jets into the European Union.

The two men are among a number of personalities around the world believed to have used artificial leasing schemes to avoid VAT on jets imported into the EU, PREMIUM TIMES can report.

The revelations came to the fore as more than 380 journalists from 96 media organisations in 67 countries scrutinized leaked data obtained by German newspaper, Suddeutsche Zeitung, and the International Consortium of International Journalists (ICIJ) from two offshore secrecy providers (Appleby and Asiaciti Trust) and 19 secrecy jurisdictions around the world.

The leaked 1.4 terabyte data, now dubbed Paradise Papers, contains 13.4 million records and is no doubt one of the biggest leaks in history.

For several months, ICIJ partner media from 67 countries pored over the gigantic data, which cover a period of nearly 70 years, from 1950 to 2016. PREMIUM TIMES is the only Nigerian media organization involved in the investigation.

More than 120 politicians and country leaders, in nearly 50 countries as well as hundreds of business people across the world were identified in the record as users of offshore entities.

According to records seeing by this newspaper and other ICIJ partners, Messrs Emefiele and Ovia, between 2007 and 2012, incorporated three offshore entities in tax havens, which were then used to acquire luxury jets and move funds around in cyclical manners that suggested tax avoidance schemes.

The shell companies are Vitesse Asset Management SA (incorporated in Switzerland in 2007); Oviation Asset Management Limited (a Bermuda company established in 2009); and Oviation Limited (an Isle of Man company incorporated in 2012).

Records show that in January 2013, the two bankers acquired a Gulfstream 450 for $33million and imported it into the Isle of Man, a European territory, where one of their shell companies – Oviation Limited – is domiciled. Oviation Limited then leased it to another of their companies, which in turn leased it to Zenith Bank.

Helped by Ernst and Young, a multinational professional services firm headquartered in London, Oviation Limited then registered for VAT in the Isle of Man, and used a deferment account to pay and demand refund of £4,239,178.13 VAT.

Messrs Emefiele and Ovia used a similar scheme when they acquired a $51million G550 jet in November 2015, and similarly ended up pocketing £6,652,988.36 in VAT refund.

Tax experts and journalists believe that the leasing schemes adopted for these transactions were structured to avoid tax – £10,892,166 in total – and that tax authorities should demand repayment of the amount.

They said Oviation Limited, not serving any genuine economic purpose, is not a real business and that the transactions it engaged in were artificial. The company does not have an office or fixed address, staff, telephone lines or computers in its Isle of Man location and is not known to offer any service. The company, the experts contend, therefore does not meet the fixed establishment test (HMRC VAT Notice 741A: place of supply of services).

The experts also explained that under EU and UK tax laws, the two jets imported by the bankers cannot be considered as qualifying aircraft, and that VAT cannot be refunded to private individuals, or exempt companies such as banks. Zenith Bank was an end user of the aircraft.

Emefiele, Ovia react

Responding to an enquiry sent to him by The Guardian UK on behalf of PREMIUM TIMES and other ICIJ partners, Mr. Emefiele explained why he and his partner adopted the suspicious leasing scheme in the acquisition of their aircraft

“During the relevant period, our client and other senior executives utilized aircraft for business purposes,” the CBN governor said through London-based law firm, New Media LLP. “Our client understands that the leasing structures adopted were commonly and widely used in the aviation sector.

“Independent professional advice was sought at the relevant time, both on selection of appropriate aircraft register and, with respect to tax and importation issues, from Ernst & Young, a world leading audit and tax advisory service provider. Our client understands that all importations were carried out in accordance with that advice and the rules and laws applicable to the relevant jurisdictions at the time.”

Mr. Ovia also rejected the allegation that he may have been involved in “aggressive tax avoidance” or “financial crime”.

“Independent professional advice was taken from the international firm of Ernst & Young LLC with respect to all relevant tax issues,” he told a Guardian UK journalist who contacted him on behalf of PREMIUM TIMES and other ICIJ team members working on the investigation.

We did nothing wrong

Ernst and Young also rejected allegations it facilitated tax avoidance schemes resulting in the creation of artificial leasing businesses.

“All our advice, whether in planning or compliance, is based on our knowledge of tax law and providing transparency to tax authorities,” the company said. “Ernst and Young does not offer mass-market tax planning schemes.

“We support efforts to ensure that tax systems remain robust and relevant to today’s ever changing business world.

“We support improving certainty in, and compliance with tax systems globally, and transparency in dealings with tax administrations. We will continue our work with international bodies and national governments in that direction.”

Isle of Man launches enquiry

Even as Messrs Emefiele and Ovia as well as the other individuals caught in the web of the alleged tax avoidance scheme are pushing back, the Isle of Man Government announced on October 23 that it has invited Her Majesty Treasury to conduct an assessment of the practice for the importation of business jets into the EU through the Isle of Man, with a focus on the VAT treatment of aircraft leasing arrangements.

The government said it had to take that preemptive step following consistent and coordinated enquiries on the matter by media organisations associated with the ICIJ.

Chief Minister Howard Quayle MHK said, “We are taking a pre-emptive action to demonstrate that the Isle of Man is a well-regulated, open and transparent member of the international community. Consequently when such matters are raised with us or our integrity is challenged we will not be complacent.

“The VAT treatment of the importation of aircraft into the EU is a highly technical and complex area, in which the Isle of Man follows the same policy, laws and rules as the United Kingdom. We believe there is scope for the ICIJ to misunderstand the position.

“However, we take allegations of this nature extremely seriously and by announcing that an assessment has taken place we will demonstrate that the Isle of Man is prepared to take appropriate action.

“Officers from the department of economic development will be briefing members of the island’s business community- we are proud of our diversifying economy and reserve the right to defend ourselves against any allegations that would damage the trust and credibility we have worked hard to build within the international community.

“I should also add that the internal review which started in October 2016 is aimed at testing the accuracy and efficacy of declarations made to it by those businesses.”


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  • Maria

    Imagine such a thief managing the country’s central bank!

    • So oju abe niko

      Maria, there is no theft here. This is a kind tax avoidance/reduction scheme that many reputable businesses use world-wide. It’s ok that it is not your moral cup of tea, but it is usually legally sound.

      • niran ade

        So the media is just portraying the good men of God as thieves. Continue…

        • Biodun

          Other questions that need answers- what is the source of this money, hopefully it is not ZB money that have been used to buy asset for a privately owned company of the bank chairman. Was there any competitive bidding from which Oviation emerge the winner to lease the asset to ZB, is there any contravention corporate governance law here?

          • niran ade

            I was playing with words there. I’m never on the defense, the irony is funny

          • TAWANDA INCOMMUNICADO

            The jet was bought while he was boss of a commercial bank and it belonged to the bank.

          • persona

            It belongs to the bank you say and yet, the directors are individuals?
            Where is the document indicating that the Bank elected them as directors?
            The truth is, we need to know if CBN governor declared his interest in those companies abroad with the CCB?
            We also deserve to know if the company that he presided over as a director also had forex domiciled therein while in office?
            Let us state clearly, corruption is what elites do to keep the nation undeveloped: It knows no tribe and don’t try to cut anyone any slack. The truth is, Zenith was end user and not owner. The trace to zenith simply showed how execs, used personal assets to rob depositors of their monies simply to make a buck or more. Its corruption plain and simple and the laws of the land were broken.

          • TAWANDA INCOMMUNICADO

            I am more interested in Maina-gate corruption scandal orchestrated by ASO-ROCK CREW OF CORRUPT MEN

        • marcos avelino

          Yea good men of jesus indeed since they donate billions of criminal money to yr church

      • government

        There is a tax risk to the extent that ZB’s income tax liability would have beeen affected by artificial transactions and capital allowances adjustment.The FIRS needs to do a back -duty investigation on the bank from 2008 assessment year.

      • Mayo

        You’re right. Apple did the same thing. The same leaked papers covered Apple. In fact the article published by NYTimes says -….. The documents reveal how big law firms help clients weave their way through the gaps between different countries’ tax rules. Appleby clients have transferred trademarks, patent rights and other valuable intangible assets into offshore shell companies, avoiding billions of dollars in taxes. The rights to Nike’s Swoosh trademark, Uber’s taxi-hailing app, Allergan’s Botox patents and Facebook’s social media technology have all resided in shell companies that listed as their headquarters Appleby offices in Bermuda and Grand Cayman, the records show….

        I also don’t see why Premium Times is calling it a scandal. Tax avoidance is not a crime. Tax evasion is what is considered a crime. Tax avoidance only becomes a ‘scandal’ if it’s being perpetuated by someone who openly preaches a different philosophy. For example if you openly say all companies should be registered in country X and pay taxes in that country but behind the scene you register your own companies in country Y so you don’t pay taxes, then it becomes a scandal even though it is not a crime.

      • Moss Malone

        I presume you don’t pay tax, that is, maybe you are not in employment. Why should someone earning 21k per month pay tax and someone earning 20x that amount does not pay his/her fair share of cost to society? It’s criminal whichever way you dress it. When thieves are in power, they make laws to legalise their criminal tendencies. It’s not tax avoidance/reduction scheme; we should call it what it is, “financial crime”, and it must not be condoned by all right-thinking people. That was why the paradise papers were leaked.

        Heaven forbid someone like you running the country; only the poor will be forced to pay tax. The rick will not pay tax and then hide 11bln dollars in a house and you would say it is legally sound. “Legally sound” my foot!!!

        You are just bandying about what people are saying (to legitimise their illicit shenanigans) without really understanding the implications. The laws of the country say you must pay tax – the cost to society. If you work around it in order not to pay tax you have a criminal tendency and are morally bankrupt like the ana-expulsive politicians. If allowed to continue unabated, individuals involved become so powerful that they start promulgating law inimical to society, such as gentrification of the poor, land grab, child abuse etc. Rich individuals and corporations will even start telling the government what laws to put in place as it is happening in the UK.

        Those engaged in such practice in the UK will be getting a visit from the HMRC.

        • So oju abe niko

          Wow! Anyone reading your diatribe would think I was responsible for killing JC. Heads up – Judas was already implicated on that about 2 millennia back. Why couldn’t you simply address the issue instead of offering unsolicited hypocritical moral outrage. Almost everybody or entity in big business worldwide find creative ways to pay less taxes, and there are legal/financial experts with the know-how everywhere who provide guidance on how to do it legally. The politicians and big business are typically in tune on these morally objectionable tax shelters, but as long as no law is being broken, it is not a crime.

    • javscong javscong

      I do not support what is alleged to have been done by both men. However, tax avoidance does not make them thieves. Let us not forget that Emefiele was at the material time a staff of Zenith Bank which is owned by Jim Ovia. I am almost certain that Emefiele simply carried on with Ovia’s plans. Jim needed a trusted ally and definitely his kinsman was available to be “used”. Check out the name of the company, “Oviation Ltd”. It has Jim Ovia written all over it. The question I will want addressed is: were those aircraft imported into Nigeria and do they carry registrations prefixed 5N……….? If they were, let the nation be told how much duty and VAT was paid to the Nigerian government. Our concern ought to be what comes into our nation’s purse not what some rich western countries lose.

      • government

        For me,there could be a case of artificial transaction involving ZB.The FIRS should revisit the bank’s audited accounts to see if what it claimed as leasing expenses ( on aircraft ) was measured at fair value,otherwise those expenses should be disallowed and added back to profits for tax purposes.

      • MilitaryPolice01 [Joint Chief]

        The jets were not imported into Nigeria, most if not all Gulfstream Business class jets are registered outside Nigeria

        • javscong javscong

          I get your point. The extant laws require that if the aircraft is owned and operated by a Nigerian ( individual or company) it is only exempted from registration for 6 months. The exception is if the aircraft is on a lease. From all indications, the offshore company was used in the initial transaction but the end beneficiary was Zenith Bank. Unless details of that transaction i.e. between Oviation and Zenith are known, I will not want to speculate further. The fall out I see from this expose ought to be for the FIRS to go after all the private aircraft owners, personal or corporate, scrutinise their papers and make sure that revenue due to government by way of taxes are duly recovered. There must be no exceptions and I hope no statute of limitation with regard to prosecution, where necessary.

      • okpada

        Nothing was paid to Nigeria because they were already registered in Tax free havens so as to beat the Nigeria system thereby avoiding the tax that would have gone to FGN

    • Dammy

      @disqus_jP0WOa3O7f:disqus:Those praying in the mosques and in the

      churches should open their eyes, to think and ask, “Who will make Nigeria a
      less horrible country than it is, if the Senate president Bukola Saraki wallows
      in what looks like money-laundering career, and, if the national president of the
      country himself, Muhamadu Buhari, has no school certificate to show anyone –
      meaning that the heads of both the executive and the legislative branches in
      Nigeria are tainted and unfit for purpose?”

    • persona

      Sis, the bigger question is, did the CBN governor state his interest in such a company in his form at CCB?
      The other issue is, did CBN governor run an account in forex while he was elected governor?
      The greatest questions is: Should the above be false, would Buhari also look the other way and will those that claim he pampers the northern and party members cry for the removal of the CBN governor?
      Without fear or favor should be the responsibility of every single public official.

  • Hum

    They can avoid tax but they cannot avoid death and the ultimate judgement that awaits every man/woman.

  • Tommy Soto

    E-rat gatehouse boys. Someone step up to the pitch and tell us how Messrs Emefiele and Ovia acquired $84 million/₦3 billion to purchase these planes. Why are they operating non-functional off-shore shell companies with no phone numbers or physical addresses?
    I’ll answer for you, they ate well from the looting feast table of GEJ and the looting class.
    Shame on you for trying to defend this high class fraud and thievery of the national treasury.

    • government

      GEJ was not the president in 2007

  • Ukpaka

    I give up on this country!. last post of the year………………..let the suffering continue. Convinced we need foreigners running this country to have any semblance of hope. Even the saints can’t turn this country around with crooks everywhere. Sad!

    • Kareem’s Pick

      Please I beg you in the name of God, don’t give up because doing it now is belated. millions have long ago given up on Nigeria because Corruption has become the main fulcrum of its pillars, it is now institutionalised.
      So lets keep talking and discussing not for a solution that twill not come, but to keep us busy so that boredom and trauma will not quicken our days to death.
      #DontGiveUpOnTalkingAboutNigeria

      • Ukpaka

        My brother…this is a bit too much. One day it’s Saraki and nothing happens. Then it’s the CBN governor. Then you read the comments and the victims are the first to defend these guys. It’s just a hopeless case. We have an election coming this month in my home state and you hear people already talking about who’s giving 3-cups of rice and who gives 200 naira for standing for hours in the sun.
        Complex country, complex problems and complex people!.

  • Dr Pat Kolawole Awosan

    This quite shocking that our CBN-governor,Dr Godwin Emefiele -S84m dollars and also chairman of Zenith bank -S3billion dollars incorporation both maintain huge saving in an off-shore destination without tax-payment and such looted public funds were converted to purchasing private jets and importing other essential commodity without paying a single required tax to the Federal Government custom and excise department.
    Why should the Federal Government, be so lukewarm to so much abnormality openly being inept at all these corruption crimes and money-laundering crimes?

  • Jon

    No crime committed as Tax avoidance is legal but Tax evasion is illegal. Since, they engaged in tax avoidance, they have not committed any crime.

    • DanJ

      Sometimes, they may be a thin line between avoidance and evasion.

      If all things were “equal”, the intention to do a lot of merry-go-round to avoid tax should flip the tag to evasion. It seems there is a different set for rules for those with 4 legs. The tax man who comes knocking on the door of the SME does not give him chance to claim tax avoidance. The Small business man has no lawyer or tax adviser to “show” him the ways to avoid tax for a fee.

      With IT, the way we get information is fast changing and so will the rules.

  • Konkolo

    Denial,denial always our yard stick in tackling cases of corruption or corrupt tendencies. Our country looks like one with more crooks than honest ones. What a shame. Just last week, in Walmart Store,a Caucasian male asked me of my Country of birth. When I told him Nigeria, he bluntly told me to my face, “your people are all f…..crooks” That’s the stigma and shame most Nigerians in the diaspora face everyday.

    • kaydutch

      Same thing happened to me at Lowes Home Improvement,when I ran into a British woman that had some friends working in Nigeria. She was telling me how corrupt our country was,I really couldn’t dispute any of the things she was saying.
      There is also corruption in UK,but not at the expense of providing good roads,hospital and electricity.

  • Yomi

    Buhari, what’s on the cards for CBN governor and others in government linked to the Paradise papers? Any sack letter in the pipeline?

    • Oladele

      Buhari does not know how to sack anyone. He wouldn’t do it. If he did, I will buy you lunch!

  • Peter Ajewole

    Tax avoidance is not a crime. By avoiding tax, these two men have done nothing wrong except different standards are being used for them

  • Gaskiyatruth

    They may argue that they simply carried out an effective tax management and did not break any law in doing this. While it is important to investigate if any law was broken, one other concern is the sources of financing these purchases. This is even more important in the case of a public servant as it will then be necessary to establish if the purchase is within his legitimate income and if his conditions of service permit him to engage in personal business. Even if the transaction was done on behalf of his organization, it would still be Important to establish if necessary approvals were sought and granted by the appropriate bodies.

  • Timothy

    I was hoping to hear they diverted govt funds while in office or used their business names to collect contracts never executed…this is not something we should worry ahead and it was not done here

  • Toughie Man

    Has all these investigations and reports in any way help to curtail corruption in any way? TI, Wikileaks and so many others have not been able to impact the world in any way. It only help to kill more people through heartbreaks and more symptomatic diseases. When people read these stories and see the sorrowful state of infrastructure, poverty and decay in their communities and regions, you won’t believe these brigands come from such decrepit places where the locals leave in abject poverty and squalor. Nigerian thieves especially have no mercy or sympathy.

  • objective

    I don’t have a single bad word to speak against these gentlemen. These are men who have through the employment of God giving intellects and outstanding determination created in our country an institution that we can be all proud of. They have employed directly and indirectly hundreds of thousands of Nigerians and as well better the lots of the families of their direct and indirect employees.

    These are not political and Civil service looters who have left every department they found themselves in Financial Wheelchairs. But these gentlemen are people who built something out of nothing and helped others to be part beneficiaries of their blessings.

    I am from North Central, but I say with all sense of honesty and responsibility that, if Nigeria has just 100 Jim Ovias, Nigeria would have been better than what she is today.

    It is now the responsibility of our government to ensure that he is protected as our own, by not allowing any foreign authorities to make a scapegoat of any of our own men of achievement. They paid taxes into Nigerian government’s coffers and that is what we should concern ourselves with.

    I salute these two gentlemen!