EXCLUSIVE: Malami faces probe over five suspicious mega deals under his watch

Abubakar Malami, former attorney-general of the federation (AGF), will be questioned over at least five suspicious transactions during his time in office, TheCable understands.

Five of the transactions under investigation, TheCable learnt, are:

• The mysterious payment of $496 million to Global Steel Holdings Ltd (GSHL) as settlement for the termination of the Ajaokuta Steel concession nine years after the Indian company had waved all claims for compensation
• His handling of the sale of assets worth billions of naira forfeited to the Economic and Financial Crimes Commission (EFCC) by politically exposed persons
• His role in the $419 million judgment debt awarded to consultants who claimed to have facilitated the Paris Club refunds to the states
• The strange agreement to pay Sunrise Power $200 million compensation in its dispute with the federal government over the Mambilla power project
• The duplicated legal fees in the transfer of $321 million Abacha loot from Switzerland to Nigeria.

TheCable understands that his name has cropped up in a number of questionable deals under the last administration.

A security agency will handle his interrogation, sources said.

AJAOKUTA DEAL: THE SETTLEMENT AFTER ‘SETTLEMENT’

In September 2022, Malami announced that the federal government had finally resolved the “long-standing contractual dispute” with Global Steel over the Ajaokuta Steel Company Limited (ASCL) and the National Iron Ore Mining Company (NIOMCO), Itakpe, concessions. He said instead of paying the original claim of $5.258 billion by GSHL over the termination of the concessions by the Olusegun Obasanjo administration, Nigeria had secured a 91 percent reduction and would pay $496 million only.

In 2013, Smart Adeyemi, then senator from Kogi state, had said the Goodluck Jonathan administration — which was in power at the time — had recovered the Ajaokuta mill “without any attendant financial obligation whatsoever”.

Malami’s settlement also came five years after Kayode Fayemi, then minister of mines and steel development, announced that Nigeria had resolved all the issues around Ajaokuta and recovered ownership.

Global Steel had entered the Nigerian steel industry in 2004 after securing five major concessions and entering share purchase agreements by the Obasanjo administration. Things went sour when the new administration of the late President Umaru Musa Yar’Adua came to power.

The government, in June 2008, revoked Global Steel’s 10-year Ajaokuta concession on the ground that the company was involved in asset stripping. It also terminated Global Steel’s concession for NIOMCO. This prompted Global Steel to opt for arbitration against Nigeria.

In 2010, a committee headed by Abdullahi Yola, then solicitor-general of the federation, recommended that the Jonathan administration should pay a compensation of $525 million to Global Steel for the revocations. Jonathan opted for mediation, with the Indian-owned company agreeing to mediation reportedly after its “underbelly” was exposed.

It was alleged that Global Steel had violated the terms of the concessions by not bringing in any foreign investment but rather leveraging on the assets of the companies to raise loans from Nigerian banks. It was also alleged that Global Steel had engaged in asset stripping — that is, selling the assets without regard for the company’s fortune. The company was accused of tax evasion and its promoters were to be prosecuted in a Nigerian court.

Faced with possible criminal charges, the promoters gave up their claims to Ajaokuta without any payment by the Nigerian government. In return, Itakpe was to be restored to them because the process of termination was considered faulty, unlike in the Ajaokuta case.

In 2016, the Buhari administration approved the execution of the modified concession agreement with Global Steel which allowed the firm to retain Itakpe. In September 2017, Fayemi announced that all agreements had been signed and Nigeria had now retrieved full ownership of the mills . Yemi Osinbajo, who was then vice-president, executed the agreement on behalf of Nigeria.

“With this development, both NIOMCO and Ajaokuta Steel Company Limited have now reverted to the Federal Government Nigeria, and we can now proceed to engage a new core investor with the financial and technical capacity to run the steel complex,” Fayemi said.

In May 2020, Global Steel curiously threatened to return to arbitration at the ICC sitting in Paris, France, in respect of all the contracts cancelled by the Yar’Adua administration. This was kept out of public knowledge by both the federal government and the company, with some insiders suggesting that the new threat was made in connivance with some senior government officials. The company’s lawyers threatened to claim up to $14 billion in damages but later reduced it to $5.258 billion.

On September 3, 2022, Nigeria announced that it had reached a settlement of $496 million with Global Steel, that it had rescued the Nigerian steel, iron ore and rail industries “from a variety of interminable and complex disputes”. Meanwhile, the legacy allegations of asset stripping, tax evasion and violation of the terms of agreement remain unresolved.

SELLING RECOVERED ASSETS IN THE DARK

In August 2022, Ladidi Mohammed, head of asset recovery and management unit, ministry of justice, was grilled by the EFCC over allegations of fraud but no charges were brought against her.

Mohammed, who is very close to Malami, was grilled over allegations of fraudulent sale of recovered assets worth billions. She was granted administrative bail with strident conditions which she could not meet immediately, and was later invited for further questioning.

She reportedly told EFCC that she acted under Malami’s instructions in disposing of some assets which were forfeited to the federal government by persons undergoing corruption trials. She was unable to produce any documented evidence to back her claims but said instructions were given to her verbally.

Malami had reportedly secretly granted a company and its attorneys a multibillion-naira assets recovery contract. The AGF gave the firm, Gerry Ikputu & Partners, an estate valuer, the task of recovering significant tracts of lands and structures believed to belong to the federal government in 10 states and the federal capital territory (FCT), Abuja. The firm also hired a legal firm, M. E. Sheriff & Co, to act as its agent.

With a confidentiality agreement prohibiting them from disclosing the specifics of the job, Malami’s letter granting them the contract said that they would be entitled to three percent of the value of each successful recovery. The award letter’s “confidentiality” clause forbids contractors from making public “any issue from this engagement without prior consent of the attorney-general of the federation and minister of justice”.

The letter dated October 5, 2021 gave the contractors six months period to lapse in April 2022. In the contract with M.E Sherrif & Co, Malami said the law firm had the duty of handing over the recovered assets to the AGF “for further necessary action and directives”.

He also asked the law firm “to work as a project team in collaboration with the Asset Recovery and Management Unit (ARMU) under the Office of the honourable attorney-general of the federation and minister of justice in carrying out this instruction”.

As many as 74 properties listed in the letter are located in high brow areas in Lagos, Rivers, Akwa Ibom, Cross River, Abia, Anambra, Edo, Enugu, Imo and Delta states and the FCT.

The AGF and the justice ministry came under the spotlight for their role in the recovery and sale of assets which was supposed to be the duty of the EFCC. Itse Sagay, then chairman of the presidential advisory committee against corruption (PACAC), had said there was no justification for engaging private firms to execute the recovery the anti-graft agencies were competent to do.

“The EFCC and the ICPC are authorised to recover stolen public assets. So, there is absolutely no justification for hiring a third party to do what government agencies have powers and experience to do,” he said. “So, it is strange for an outside agency, who does not have that record, and will have to be paid to recover the property. That shouldn’t be; it’s wrong. That doesn’t make sense.”

PARIS CLUB: CLUBBING WITH ‘CONSULTANTS’

In one of the most controversial cases under Malami’s tenure, some consultants, who claimed to have helped the states calculate their share of the Paris Club refunds, sued the federal government to court demanding to be paid their fees.

Malami, in what the governors described as a case of collusion but which he denies, opted for an out-of-court settlement. He agreed that the states — which were still vigorously disputing the claims — would pay $418 million to the consultants and the monies would be deducted from their federation allocations over time.

Ned Nwoko, the senator representing Delta north, was to get $68,658,192.83, while Ted Isighohi Edwards would receive $159,000,000. Others are: Riok Nig. Limited, $142,028,941.95; Orji Orizu, $1,219,440.45; Olaitan Bello, $215,195.36; and Panic Alert Security Systems Limited, $47.821,920.

This generated a public spat between Malami and the governors. While President Muhammadu Buhari initially withheld consent, he eventually approved and the consultants were given promissory notes. A federal high court sitting in Abuja has now restrained the consultants from transacting with the promissory notes.

In August 2022, the Nigeria Governors’ Forum (NGF) said the consultants were using Malami “to hustle” the states’ funds. Malami said that the NGF had no basis to reject the proposed deduction of $418 million, adding that the consultants’ claims were justified.

Abdulrazaque Bello-Barkindo, the forum’s head of media and public affairs, said there was no collective agreement between the consultants and the NGF, adding that the forum has requested the consultants to provide evidence of work done.

“There is no component that compels the governors’ forum to pay consultants anything, and there is no agreement between the consultants collectively and governors collectively,” he said. “The Paris fund money has been exhausted, and the consultants and the attorney general are expecting the money to be deducted from states’ accounts from sources over 52 or 58 months. That is unheard of. And what the NGF is saying is that there is no money to be paid and the monies that have been paid are gross errors. 

“Where they are asking the monies to be gotten from is the biggest sacrilege. This money belongs to the states, the masses of this country and because you’re powerful, you want money to be taken and given to you. That’s why they are using the attorney general of the federation to get the money at the source because the state does not have any reason [to pay]. What the attorney general is claiming that there is a consent judgement is what the NGF is saying did not exist. 

“What the NGF is saying is tasking is evidence of work done. Some of them said they have constructed primary health cares across the country, and other said they have provided boreholes, these are physical things that you can show. This matter is in court. The court is the only authority that can determine clearly whether there is a reason for payment or not, why are highly placed lawyers afraid of their own platform?”

In 2021, the governors obtained an order from a federal high court in Abuja restraining the federal government from deducting the money from states’ accounts for the purpose of paying the disputed debt.

MAMBILLA POWER: THE SUN SHINES ON SUNRISE

Early 2020, Malami committed the federal government to paying Sunrise Power and Transmission Company Limited (SPTCL) $200 million to as “final settlement” of the dispute over the Mambilla power project in Taraba state. He also agreed to pay a penalty of 10 per cent in case of a default in fulfilling the settlement agreement — in addition to restoring Sunrise as the local content partner for the  $5.8 billion hydroelectric project.

In documents seen by TheCable, Malami and Mamman signed on behalf of the federal government while Leno Adesanya signed as chairman and CEO of Sunrise.

Sources told TheCable at the time that Sunrise Power had previously asked for an $80 million settlement in order to withdraw its arbitration claim against Nigeria in France over an alleged breach of contract.

But Babatunde Fashola, who was minister of power, had contended in 2017 that there was no breach of contract as Sunrise had not done any work to warrant any demand or arbitration. Fashola also questioned the integrity of the contract. However, with Fashola’s exit from the ministry, a deal was put together by Mamman and Malami and facilitated by a female figure in Aso Rock.

The project, the biggest plant in the country, was conceived in the 1970s but has suffered severe delays. The 3,050-megawatt facility will be the second largest hydropower plant in Africa when completed.

In 2017, Sunrise Power, which claimed to have been awarded the build, operate and transfer (BOT) contract in 2003, had dragged the federal government and its Chinese partners before the International Chamber of Commerce (ICC) in Paris, France, over alleged breach of contract.

In a letter dated June 20, 2017 to the then Acting President Yemi Osinbajo requesting his intervention in the matter, Adesanya accused the late Abba Kyari, chief of staff to Buhari, of taking the unilateral decision of directing the ministry of power to sideline the company from the contract “against the advice of Malami”.

In the letter dated July 24, 2017 to Osinbajo, with a copy to the chief of staff, Malami had said SPTCL should be engaged as a local content partner to the project “as a means of accommodating its prior contractual interests on the project”.

He backtracked a few weeks later. In another letter dated August 17, 2017 to the company, Malami said he issued the previous opinion on the project based on the limited materials provided at the time. He added that there was no requisite federal executive council (FEC) approval for the project.

“The logical conclusion in the circumstances should be that there was no valid contract between Federal Government of Nigeria and SPTC in respect of the project or at all,” Malami wrote.

Not long after that, TheCable understands, Malami and Adesanya became very close, and the former AGF changed his legal opinion. In a memo to Buhari dated March 26, 2020, Malami asked him to approve the payment of $200 million to Sunrise Power as “full and final settlement” to discontinue the arbitration in Paris and set the government free from all liabilities in the dispute. However, Buhari, in his reply dated Monday, April 20, said: “FG does not have USD 200 million to pay SPTCL”.

The case is still in arbitration.

ABACHA LOOT: $17 MILLION BONANZA FOR LAWYERS

In 1999, federal government engaged the services of Enrico Monfrini, a Swiss lawyer, to help trace, identify, freeze and recover all looted funds traced to Sani Abacha, Nigeria’s military ruler, from 1993 to 1998. After seven years of work, including investigations and litigation across various countries, Monfrini traced and recovered $321 million from Luxemburg banks.

The funds were domiciled with the government of Switzerland in 2014 pending a final request for transfer from Nigeria. Monfrini and other lawyers involved had also been paid their fees, with the Swiss getting about $12 million.

However, Malami, rather than write directly to the Swiss authorities to seek the transfer of the funds to Nigeria, engaged Oladipo Okpeseyi and Temitope Adebayo, two Nigerian lawyers, to do the job again. Their involvement was basically to write to the Swiss authorities to return the funds to Nigeria as there was no asset tracing and recovery involved again.

They were paid $17 million as “professional fees” for writing the letter — more than the Swiss lawyer who traced and recovered the funds over a period of seven years. Okpeseyi and Adebayo were both members of the Congress for Progressive Change (CPC), the party founded by Buhari to contest in  the 2011 presidential election. Malami was the legal adviser to the party.

Okpeseyi’s name featured regularly in legal transactions while Malami was in office.