The
Presidential Committee on Audit of Defence Equipment Procurement
(CADEP) has traced about N2billion, meant for the purchase of vehicles
for the Nigerian Army, to the accounts of five children of a former
Chief of Army Staff.
The accounts were said to have been frozen as at the time of filing this report.
Also, the panel discovered that about 42
units of Armoured Personnel Carrier (APC) rejected by Iraq were resold
to Nigeria to fight Boko Haram insurgents.
It said the poor equipment accounted for the loss of lives and soldiers in the North-East.
The panel’s findings are contained in a brief which was obtained by The Nation.
The outcome of the panel’s investigation
suggested that the children of the ex-Chief of Army Staff allegedly
used two companies for the deal.
The panel said: “The committee reviewed
the procurement carried out by Chok Ventures Ltd and Integrated
Equipment Services Ltd, two companies that shared the same registered
office, had one name as common controlling shareholder and sole or
mandatory signatory to the various banks accounts of the companies.
“The committee further established that
between March 2011 and December 2013, the two companies exclusively
procured various types of Toyota and Mitsubishi vehicles worth over N2,
000,000,000.00 for the Nigerian Army without any competitive bidding.
“Most of the contracts awarded to the
companies were also split, awarded on the same date or within a short
space of time at costs and mobilization higher than the prescribed
thresholds.
“For instance, on February 13 and 15,
the two companies were awarded contracts worth N260, 000.000.00 and
N315, 000,000.00 respectively for supplies of various vehicles. The
Nigerian Army could not justify the exclusive selection of these vendors
against other renowned distributors of same brands of vehicles
procured.
“More seriously, the committee found no
credible evidence of delivery of the vehicles by the two companies as
there were no receipt vouchers, but only unauthenticated delivery notes,
invoices and waybills that were purportedly used for the deliveries.
“Nevertheless, the vendors were fully
paid based on job completion certificate authenticated by the then Chief
of Logistics, Maj Gen D.D. Kitchener (rtd). The payments were also made
without deduction of Withholding Tax (WHT). Furthermore, analyses of
the various bank accounts of the two companies showed transfers to
individuals , some of who are believed to be children of the army chief.
“Thus, the committee recommends further
investigation to determine delivery of the vehicles and relationship of
funds beneficiaries with the former COAS and the two companies.
Furthermore, the panel said that Lt Gen O. A. Ihejirika (rtd), Maj Gen
D. D. Kitchener (rtd), Col A. M. Inuwa and Mr Chinedu Onyekwere should
be held accountable for the issues arising out of the contracts.”
The panel observed that the award of contracts in the Nigerian Army was fraught with irregularities.
It said a company was registered on November 17, 2014 and awarded $125,179,299.10 on the same day.
It said: “The Nigerian Army, between
April and August 2014, entered into four contract agreements with
Societe D’Equipmenteux Internationale (SEI Nig Ltd) for procurement of
Cobra Armoured Personnel Carriers, Shilka Self-Propelled Artillery
Guns, Armoured Fighting Vehicles (AFVs) as well as various ammunition
and spares funded by the ONSA.
“The contracts for the Cobra APCs and
Shilka Guns were not executed as they were not funded. However, the
costs for procurement of the AFVs; ammunition and spares were
$398,550,000.00 and $484,765,000.00 respectively totalling
$883,315,000.00.
“In November 2014, the ONSA awarded
contract to Conella Services Limited for procurement of 72 various arms
and ammunition that included MRAP vehicles, Mi-17 helicopter at the cost
of $125,179,299.10.
“The committee observed that the company
was registered in Nigeria on 17 November, 2014 and awarded the contract
on the same date, while the EUC for the procurement was issued a day
later on 18 November, 2014. Furthermore, the ONSA paid $36,996,530.00
and N2,209,582,296.00 to the vendor between November 2014 and 15 April,
2015.
However, the Nigerian Army denied receipt of any procurement from Conella Services Ltd.
“Similarly, the committee tried in vain
to reach officials of the company to confirm execution of the contract.
There is, therefore, the need for further investigation of Conella
Services Ltd.
“The committee observed that SEI and its
two associated companies, APC Axial Ltd and HK-Sawki Nig Ltd, were
incorporated in May 2014 with two Nigerien brothers, Hima Aboubakar and
Ousmane Hima Massy as the only directors.
“ Between May 2014 and March 2015, the
ONSA mandated CBN to release various sums totaling $386,954,000.00 to
SEI and the two associated companies for ‘procurement of technical
equipment’, without tying the money to particular items of procurement.
“Thus, the allotment of the funds was
left at the discretion of the vendor without input or consultation with
ONSA or the Nigerian Army.
“Furthermore, some of the funds
transferred preceded the formalization of SEI contracts with the
Nigerian Army. There was also no evidence of any contract to justify the
payments made by ONSA to the SEI associate companies. Consequently, it
had been difficult for the ONSA, the Nigerian Army and SEI to reconcile
the accounts vis-a-vis the equipment delivered.”
The panel also uncovered that 42 units
of Armoured Personnel Carrier(APC) which were rejected by Iraq were
later sold to Nigeria to fight Boko Haram insurgents.
It claimed that some of the APCs were either expired or unsuitable leading to loss of lives.
It added: “The committee observed that one of the new equipment SEI procured for the Nigerian Army from Ukraine was BTR-4E APC.”
However, according to the Ukraine’s
state enterprise, Lviv Armour Repair Plant, the designers of the
equipment, “some of the products sold to Nigeria in 2014 were actually
among 42 units designed for Iraq which subsequently rejected them due to
poor performance rating”.
“The Nigerian Army did not also
undertake the mandatory pre-shipment inspections provided for in the
contract agreements. Instead, the NA deployed an infantry officer, who
lacked the technical knowledge to assess the capabilities and
shortcomings of the equipment, to oversee the shipment of the items for
the Nigerian Army from Ukraine.
“Additionally, the two-week training
availed the technicians and operators was inadequate for them to
comprehend the technical workings of the newly introduced equipment.
“The committee’s interactions with the
field operators revealed that although the platforms and ammunition
procured by SEI were deployed for the NE operations, some of them were
aged or expired, lacked spares and prone to breakdown without immediate
recovery equipment.
“Therefore, failure to carry out
pre-shipment inspection and inadequate training resulted in procurement
of some unreliable equipment that reduced the capacity of the Nigerian
Army in the North East operations and resulted in the loss of lives and
equipment.”
On some payments to SEI on T-72 Tanks,
the panel said the company made about $93,000,000.00 profit without
paying the mandatory 5 per cent Withholding Tax(WHT).
It said: “SEI submitted a document to
the committee reconciling the items it delivered to the Nigerian Army
vis-a-vis the payments made to it by ONSA.”
According to SEI, the total value of the
contracts it executed amounted to $909,065,824.00 and not the
$883,315,000.00 reflected in the two contract agreements it signed with
Nigerian Army.
Furthermore, SEI claimed that it delivered goods worth $697,718,168.00 whereas only $198,289,672.00 was paid to it by ONSA.
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