A $35 million payment, with 40% ownership, was allegedly made to a business with a 10 million naira registration value. The House of Representatives Committee on Local Content, headed by Chairman Boma Goodhead, has begun an investigation into the matter.
Allegedly investing a total of N14 billion naira for shares to a company one year after its registration in 2020, the former management team of the Nigerian Content and Development Monitoring Board, NCDMB, headed by erstwhile Executive Secretary, Simbi Wabote, displayed symptoms of financial recklessness, according to the Committee.
During a dinner in Lagos, Heineken Lokpobiri, the minister of state for petroleum resources (oil), accused the former NCDMB executive of squandering $500 million on dubious projects and loans, including a $35 million investment in the Brass modular refinery in Bayelsa State that has yet to yield any results.
In addition, he mentioned the Brass Fertilizer and the $20 million empty field that NCDMB issued. It follows that NCDMB has invested poorly.
With the exception of the Waltersmith modular refinery, none of the approximately $19 million in equity investments made by NCDMB have been deemed worthwhile. Under my leadership, however, the NCDMB will not engage in such behavior.
A $35 million contract was awarded to a business that was registered in 2020, less than a year after its registration, according to Hon. Boma Goodhead, who was questioning the process during the Committee meeting with NCDMB board representatives.
With a capital of 10,000,000 Naira and a share price of 1 Naira each, the firm was officially established as a family business.
How can the board approve a payment of 14 billion naira, which is 40% of the total, to this company? The corporation has just cashed out on us, plain and simple. Would you put your own money into such investments if it were yours? Taxpayers are already being utilized anyway. Without equity, how do you get your hands on that kind of money?
“Why haven’t you recovered those funds after the contract expired if you are claiming they are backed by the CBN guarantee? They were just disbursed without due diligence.”
“The initial set of terms for loans domiciled with Bank of Industries is 2018/2019, and the duration for the remaining terms is 5 years. Although you expressed pride in the partnership between the board and the bank, the recovery after the expiration tenure is only 45 million dollars, leading to a bad business loan of 30 percent, and our document covers 160 million out of 320 million dollars, meaning that the board is disbursing half of that amount.
In response, Mr. Isaac Iyalla, the former director of finance and personnel and chairman of the NCDMB investment review committee, and Mr. Abayomi, his secretary, emphasized that the council had approved all contracts and disbursed all funds in accordance with all procedure.
Regarding the matter of the $35 million contract being given to a company with a 10 million naira valuation but the project being shelved, Iyalla stated that the project is behind schedule because of the difficulties faced in the post-COVID period, which altered the project dynamics and had an impact on many things.
He pleaded with the committee to request all supporting papers for their transactions and mentioned that COVID had caused the extension of the tenure of several contracts.