Police Indict Capital Oil, Ubah for Subsidy Fraud

An interim investigative police report on the involvement of Capital Oil and Gas Limited in the fuel subsidy scheme has established that the company and its Managing Director/Chief Executive Officer, Mr. Ifeanyi Ubah, and four of the company’s staff, colluded with others to defraud the Federal Government of Nigeria of billions of naira.

The four indicted staff of Capital Oil are its Executive Director, Operations, Mr. Orji Joseph; General Manager, Operations, Mr. Ogbuokiri Chibuzor; Depot Manager, Mr. Okorie Onuabuchi; and Head of Training, Mr. Nsikan Usoro.

The report showed that Capital Oil was involved in 26 transactions covering the importation of 538,740,000,000 litres of petrol and was paid N43.291 billion as subsidy claims in 2011. The report detailed the arrest and interrogation of Ubah and four others by the SFU between September and October, during which it was discovered that the alleged irregular claims were made based on fraudulent fabrication and forged documents in which about N43.291 billion was paid to Capital Oil as subsidy claims. The report noted the irregularities were in the form of alterations, wrong reference numbers and duplication of vessels, coupled with cargo quantity inflation.

Subsidy Scam: Uba, 6 Others to Remain in Custody

The Special Fraud Unit (SFU) arrested six managers of Capital Oil and Gas for their alleged involvement in the fuel subsidy fraud in addition to Mr. Ifeanyi Uba who was earlier picked up by the unit.  

Uba is expected to remain in custody pending the conclusion of the investigation and interrogation over his role.

The five managers arrested with Uba include, Executive Directors, Operations and Special Duties, Mr. Joseph Orji and Mr. Afam Azubuike respectively. Others are, General Manager Operations, Mr. Chibuzor Ogbuokiri; Depot Manager, Mr. Godfrey Okorie and Head, Training Unit, Mr. Nsikan Usoro.

Capital Oil and Gas was indicted by the Aigboje Aig-Imoukhuede led Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments. According to the panel, out of the sum of N62,501,511,789.24 obtained fraudulently through the fuel subsidy structure, Uba’s company alone was allegedly involved to the tune of N22.4 billion.

Capital Oil Faults Indictment over subsidy fraud

One of the indicted oil marketing companies, Capital Oil & Gas Industries Ltd, by the Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments headed by Mr. Aigboje Aig-Imoukhede, has described as “very shoddy”, the report, which recommended it for criminal investigation.

Capital Oil & Gas in a statement said the committee erred by accusing it of infractions by making claims of subsidy payments without proof of existence of the mother vessel bill of lading or daughter vessel bill of lading, in spite of indisputable documents evidencing the purchase, payment, sailing and discharge of the cargo in question.

The company also argued the committee was wrong to have recommended that it collected subsidy payments for which proof of mother-vessels were not found in locations claimed at the time of transshipments. This, it said, was notwithstanding that all the relevant documents regarding the importation of the cargo, including mother and daughter vessels documents and the bill of lading was made available to the committee.

In addition, Capital Oil & Gas said it had provided to the committee, letters from Vitol S.A and Delany both internationally-recognized oil trading companies confirming the transshipment and vessel positions, transshipment from International Cargo Surveyor Inspectors (SGS), one of the key inspection companies worldwide.

FG indicts Conoil, MRS, Capital Oil, 18 others

The Federal Government has indicted Conoil Plc, MRS Oil and Gas Ltd., Capital Oil and Gas Industry Ltd., and 18 other firms in the fuel subsidy imbroglio. It said that these companies were being investigated based on the evidence that they might have engaged in fraudulent activities under the fuel subsidy regime.

The Ministry of Finance, in a statement gave the names of the other companies as Aluminnur Resources Ltd., Brilla Energy Ltd., Caades Oil and Gas Ltd., Downstream Energy Source Ltd., Eterna Plc and Eurafric Oil and Gas Ltd. Others are Lumen Skies Ltd., Majope Investment Ltd., Matrix Energy Ltd., Menon Oil and Gas Ltd., MOB International Services, Nasaman Oil Services Ltd., Natacel Petroleum Ltd., Ocean Energy Trading and Services, Pinnacle Contractors Ltd., Sifax Oil and Gas Company, Tonique Oil Services Ltd. and Top Oil and Gas Development Company Ltd.

According to the statement, a report by the Presidential Committee on Fuel Subsidy Payments led by Aig Aig-Imoukhuede, had recommended that the firms refund various amounts to the national treasury. The statement said, “There is a second group of companies with infractions which are relatively minor. They are in discussion with the government for a quick resolution of their issues. The government is prepared to settle their claims under the following circumstances. “For oil marketers under investigation for possible refunds to the government, their 2012 outstanding claims will be netted out against their expected refunds to the government and those with a positive net balance, i.e. outstanding claims greater than expected refunds, will be processed and paid. “For marketers with a negative balance with the government, i.e they owe the government more in refunds than the government owes them, the Aig-Imoukhuede committee will accelerate the review of their documents after the Sallah break so that their claims can be processed and settled, if cleared, without further delay.