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The Independent Corrupt Practices and Other Related Offences (ICPC) has uncovered N1.37 billion allegedly diverted from the money Kaduna State Government released for the now-abandoned light rail project in the state.
ICPC said the money was diverted into a private account during the administration of former Governor Nasir El-Rufai, who governed the state between 2015 and 2023.
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The anti-corruption agency detailed the discovery in an application filed at the Federal High Court in Abuja seeking the forfeiture of the funds.
“The diversion of these funds has deprived Kaduna State residents of the much-needed rail transportation system,” an affidavit filed in support of the forfeiture application stated.
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The alleged fraud was allegedly perpetrated under the pretext of a “purported joint venture agreement,” which the Governor El-Rufai-led Kaduna State Government signed with Indo Kaduna Mrts JV Nigeria Limited in October 2016.
Before Mrts JV Nigeria was incorporated by the Corporate Affairs Commission (CAC), ICPC said, Mr El-Rufai began approving payments to the entity in December 2016.
In the end, between December 2016 and January 2017, the then-governor approved the payment of N11.1 billion to the entity, which was not formally incorporated by the CAC until 10 May 2017.
From the N11.1 billion paid to Mrts JV Nigeria’s account domiciled with Sterling Bank, N1.373 billion was allegedly diverted into a private account tracked down by ICPC.
ICPC‘s ex parte application filed in court on 14 February sought an interim forfeiture of the discovered money.
It also sought the court’s order for a notice to be published in two national newspapers, inviting any individual, corporate entity, or legal representative with claims to the funds to show cause why the money should not be permanently forfeited to the government.
Justifying the forfeiture request, ICPC argued in the application signed by its chairman, Musa Aliyu, that redirecting the money into public-use projects aligns with the broader public interest.
The commission also said granting the forfeiture order would not infringe on constitutional rights but would serve the greater public interest in governance and accountability.
How entity received payments from Kaduna govt
ICPC launched an investigation into the matter after receiving a petition from M. Yahaya, a lawyer from NUS’ AB Chambers, Abuja.
The petition, dated 27 June 2024 and received by the commission on 1 July 2024, alleged a disturbing level of criminal misappropriation of Kaduna State’s funds by officials of the past administration of Governor El-Rufai.
Its analysis of documents gathered during preliminary investigation revealed that the Kaduna State Government signed a “purported joint venture agreement” with Indo Kaduna Mrts JV Nigeria Limited on 18 October 2016 for the construction of light rail in the state.
Before the incorporation of the entity by the CAC, its promoters opened a bank account for it at Sterling Bank on the 15 December 2016, which within less than a month received N11.1 billion (N11,099,579,455.14) from various accounts of the Kaduna State Government in tranches. The payments were approved by Mr El-Rufai, ICPC said.
The account received its initial deposit of N890.3 million from the Kaduna State Single Treasury Account on the 23 December 2016.
It received N2.3billion from the Accountant General of the state on 10 January 2017.
Again, the Accountant General paid the last two tranches of N3 billion and N4.9 billion (N4,909,279,455.14) into the entity’s account on 17 January 2017.
“The N11,099,579,455.14 was meant for the provision of light rail services for the use of the people of Kaduna and Nigerians in general.
“There was no such project executed by the Kaduna State Government as revealed in the course of investigation,” read the affidavit sworn to by Idris Abubakar of ICPC’s legal department.
‘Project money fixed in interest-yielding account’
From ICPC’s findings, Mrts JV Nigeria turned out to be an entity with a layered ownership structure.
The signatories to its account were officials of Kaduna State Government and the Indian representative of the Skipper Nigeria Limited.
Meanwhile, Skipper Nigeria has a subsidiary – GTA Engineering Nigeria Limited – which the ICPC claimed received funds diverted from Mrts JV Nigeria’s account.
On 17 January 2017, the day Mrts JV Nigeria received the N11.1 billion in full, with the last two tranches from the state’s accountant general, the Group President of Skipper Nigeria Limited, Jitender Sachdeva, wrote to Sterling Bank, instructing the bank to fix the money in an interest-yielding account.
ICPC’s investigations revealed that for months, nothing was done about the project for which the state government made N11 billion down payment.
On 10 July 2019, Indo Kaduna Marts JV Nigeria Limited returned N10 billion from its Sterling Bank account to Kaduna State Government.
By that time, the interest on the fixed deposit had hit N326.8 million (N326,823,818.68).
“Investigation also revealed that the interest on the fixed deposit was diverted to different accounts of Skipper Nigeria Limited domiciled with Sterling Bank Nigeria Limited,” ICPC’s affidavit stated.
It was not just the interest that was diverted. ICPC said the balance of N1.046billion (N1,046,300,000) was diverted in two tranches of N890.3 million and N156 million into the account of GTA Engineering Nigeria Limited domiciled with Sterling Bank Limited and Access Bank Plc.
No official of Kaduna State Government was a signatory to the bank accounts of Skipper Nigeria Limited and GTA Engineering Nigeria Limited except Indo Kaduna Marts JV Nigeria Limited, ICPC said.
“The alleged N1,046,300,000.00 transferred into accounts of GTA Engineering was tagged “payment for feasibility study” but investigation revealed that no such feasibility study was carried out.”
ICPC said it recovered both the N1,046,300,000 transferred to GTA Engineering Limited accounts of Sterling Bank Limited and Access Bank Plc for the alleged feasibility study and the N326.8 million interest on the N11.1 billion fixed deposit.
The recovered amount totalling N1.373 billion is what ICPC approached the Federal High Court to seek its forfeiture.
ICPC litigation officer, Mr Abubakar, said in the supporting affidavit that “the application will not affect the rights of any interested person to own property” as guaranteed by the Nigerian constitution.
He added that the commission is seeking to “repatriate the recovered sums back to Kaduna State Government to enable the government channel the money to more people-oriented projects.”
No wrong committed – El Rufai’s ex-appointees
Mr El-Rufai’s former appointees have reacted to the allegations by the ICPC, denying any wrongdoing.
The former governor shared a statement by the group of unnamed members of his then-cabinet via his X handle.
The allegation is the latest indictment of members of his outgone administration by the ICPC. In January this year, ICPC arraigned three of his former appointees on N64 million money laundering charges.
Mr El-Rufai and the group of his former appointees have consistently maintained their innocence.
They said the move to confiscate the light rail project funds, which they described as private assets, “is sheer oppression and abuse of power”. They added that the move could discourage foreign direct investments.
They said the Indian company, Skipper, secured the award of the light rail project, estimated to cost between US$600-700 million, following a competitive tender process.
According to them, under a Build, Own, Operate and Transfer agreement, the company was to be responsible for securing a loan of about 85 per cent of the project cost from the Indian Export Import Bank, whilst Kaduna State Government was to pay 15 per cent as equity. The agreement led to the setting up of a joint venture.
They argued that opening an account in the name of the joint venture pre-incorporation is not a crime under the Nigerian laws. “It only means that the signatories to the account are personally liable for pre-incorporation activities”.
They also explained that the joint venture company, Indo Kaduna MRTS-JV Nigeria Limited, had been registered in India, which was why “the Indian NEXIM Bank agreed to transact with the Kaduna State Government.”
They said unfortunately, , could not be funded through the anticipated loan from Indian NEXIM Bank, because the state government could not secure the Sovereign Guarantee by the Federal Government of Nigeria, “which we initially understood would be made available to Kaduna State”.
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“Meanwhile, during the intervening period, we had increased our down payment to N12 billion as part of Kaduna State’s 15 per cent equity contribution. When it became obvious that the Sovereign Guarantee would not be granted, we recalled the money from Sterling Bank,” their statement added.
They said the bank refunded all the funds except for the N890 million “cost of the feasibility study” that had been paid which remains the property of the Kaduna State Government.
They said but for the Sovereign Guarantee that could not be secured from the federal government, “the Kaduna Light Rail Project would have been completed or be nearing completion.”
“We challenge the purveyors of lies and falsehood to come forward with genuine documents to contradict any of the foregoing facts and we will respond accordingly!”
