Exposed: How Dozzy Oil uses EFCC to divert attention from their oil subsidy fraud

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Category: GENERAL

Published on Tuesday, 21 August 2012 11:44

Written by Elombah.com

[elombah.com] On August 8, 2012 EFCC arraigned three management staff of Keystone Bank Ltd namely Anayo Nwosu, Olajide Oshodi, Sunny Obazee and the bank together with Mr. Ashok Israni, the Chairman of Nulec Industries Plc and his company on a two count charge of conspiracy to obtain money by false pretence and obtaining

money by false pretense. 

It was alleged that the accused between June and July 2008 had obtained the sum of N855 million from Sir Daniel Chukwudozie of  Dozzy Oil & Gas Ltd under false pretence and that the said amount represented payment for preference shares of Nulec Industries Plc.

The accused persons were granted bail same day by the presiding Judge, Justice Habeeb Abiru of Lagos High Court Ikeja.

However, analysts are baffled that all these are happening now that Sir Daniel Chukwudozie and his company Dozzy Oil & Gas Limited were implicated in fraudulently collecting about N2 billion Oil Subsidy Payments and are being investigated by federal government. 

“It is worrisome that Efcc is involving itself in this well planned diversionary tactics by Sir Daniel Chukwudozie to shift public attention from his impending arraignment for oil subsidy fraud”, Elombah.com was told.

Elombah.com investigative reporter below reveals the facts in respect of the transaction.

BACKGROUND

Nulec Industries Limited (Nulec) is a customer of Bank PHB (now Keystone Bank). The company enjoyed a working capital facility with the bank which was at a time increased to N450 million. The company is engaged in importation, assembly, manufacturing, sales and distribution of household electronic products. Nulec Fans, Stabilizers, Fridges, Magnetic Tapes (also known as cassettes) etc. were known names in Nigeria market. Its factory is located in Shagamu, Ogun State.

In the first quarter of 2008, the company had planned to raise capital to expand its business through Private Placement and had invited interested issuing houses for presentation. Bank PHB won the Issuing House deal. The company also selected the following parties to the offer:

1.Horwath Dafinone- Financial Accountants

2.Lilian Esiri & Co- Solicitors to the offer

3.Jide Taiwo & Co- Estate Valuers and

4.APT Stock Brokers

As the issuing house, Bank PHB was not only required  to market the offer but also to assemble and bind the Information Memorandum which should contain all the historical financial performance of Nulec and future projections , and valuation of the company as provided by Horwath Dafinone, Jide Taiwo, Lilian Esiri and the directors of Nulec. 

The caveats as contained in the memorandum are follows:

a.the indemnity by Nulec claiming responsibility for the correctness or otherwise of the information provided in the booklet; and

b.A warning to intending investors to consult their lawyers and financial advisers before investing.

Amongst other information contained in the memorandum is the company’s commitment to commence the process of listing of the shares on the floor of Nigeria Stock Exchange immediately after the conclusion of the offer. 

Also contained is an attested letter of going concern status of Nulec issued by the financial accountants to the offer, Horwath Dafinone who has now been influenced to be a prosecution witness to suit filed by Efcc at a Lagos High Court, after receiving in full its professional fees for work done in the packaging of this offer and having not in any way disclaimed those information so provided. It is instructive to note that the financial accountants’ inputs, declarations, and certifications are actually the information that investors rely upon to take any investment decisions.

The offer opened on July 1 and closed on July 31 2008. 

500 million shares were on offer at N2.85/share. Staffs of the bank were encouraged to buy and to market the shares to high net worth individuals.

Below is the list of some of the staff of Bank PHB that bought the shares:

Other investors also purchased the shares.

At the end of the offer, the money raised was transferred to Nulec Industries Ltd’s account. This marked the end of the job of the issuing house.

ENCOUNTER WITH SIR DANIEL CHUKWUDOZIE OF DOZZY OIL & GAS LTD

Sir Dan Chukwudozie (the owner/ Managing director/CEO of Dozzy Oil & Gas Ltd) has been a family friend to Mr. Anayo Nwosu, a banker with Bank PHB (now Keystone Bank). Sir Chukwudozie is a renowned entrepreneur, trader, Oil & Gas Marketer and experienced investor in property and stocks.  He has eyes for an investment of future value. He was one of the few Nigerians that invested in the private placement of MTN, banks, telecoms and insurance companies. He was one of the first oil marketers who took the risk of investing in the construction of oil storage facilities in Calabar Free Trade Zone. He built three tank farms when others were in slumber and later sold one the tanks to Addax Petroleum and another at a later date to an indigenous Oil Marketing Company. 

Awash with cash realized from the sale of one his tank farms in Calabar, Sir Chukwudozie had told Mr. Nwosu that he would like to massively invest in stocks given their huge returns. He pleaded with him to facilitate his purchase of Bank PHB own IPO shares valued N500 million, which he did. He also assisted him to buy the private placement of Dufil Prima Industries Plc worth N207 million which he also did. He charged Anayo to always let him know of any investment opportunity in stocks especially private placement since from his experience, it yielded better returns.

So when Bank PHB packaged Nulec shares in 2008, and Mr. Nwosu and his boss, Mr. Olajide Oshodi, informed Sir Chukwudozie of the opportunity, he promptly requested that copies of the Offer Information Memorandum be sent to him.  He promised not only to invest but to also get his associates to invest. Below is the list of the investment made by Sir Chukwudozie and his associates:

In a show of classic capitalistic desperation and greed to ensure that he and his associates corned the shares of this Nulec, Sir. Daniel Chukwudozie was willing to pay an additional N1.10 per share for a total of 110 million shares. An agent, who had earlier firmly secured 100 millions of Nulec Shares, brokered a preferential allotment of 100 million units of shares in favour of Sir Chukwudozie and 5 of his associates also included in the schedule above.  

Events of recent times have revealed that most of the names who Sir Chukwudozie claimed to be his associates were fictitious as some of them could not be located at the addresses supplied. Sir Chukwudozie collected the share certificates for and on behalf of all his associates just as he submitted the application forms. He was later to consolidate all the shares in his name without the knowledge and involvement of the bank or any of its staff. To affect these shares crossing, he only could deal with Nulec’s registrars and the board of directors of Nulec being that the duties of the Bank as an issuing house had terminated once Nulec issued the primary share certificates and received funds raised. Upon the conclusion of the offer, the shares were allotted and the investors received their share certificates.

 As in other offers before September 2008, Nulec planned to list its shares at a price between N5 and N7 per share. If this had happened, Sir Chukwudozie and his associates would have made a profit of between N645million and N1.25 billion.  This was Sir Chukwudozie’s actual driving force in investing the huge sum of money in this offer.

 THINGS FALL APART

Before September 2008, companies were allowed to list at prices above the private placement offer prices. Nulec had indicated their intention to list above its P.P Offer Price. 

Immediately after the end of the Nulec’s P.P Offer, the Stock Market began to experience crisis and NSE changed its guideline insisting that PP must be listed at original offer price. Sir Chukwudozie got the broker to refund a premium of N1.10 per share he and his so called associates paid, totaling N100 million in Sept 2009 as stated in his petition to EFCC. 

As the world economic recession ensued, the value erosion in the capital market had continued and Sir Chukwudozie was getting jittery. He confirmed the suspicion that he was same as his associates by causing an entire 300 million shares to be transferred to his name. He then demanded a refund of his money from Nulec or be allowed to take over the company. His written request to be made a director of Nulec was rejected and a big fight began. Sir Chukwudozie promised to let the owners of Nulec know that he was connected to the high and mighty in Nigeria and that he would deal with anybody that caused him to lose money.

Nulec Industries called Sir Chukwudozie’s bluff and continued its efforts to list the shares on the stock exchange for the benefit of all stake holders. Having secured the Nigerian Stock Exchange’s approval to list, the company also needed the approval of SEC before listing. Initially, Nulec’s application docket at SEC got missing. With a threat of law suit, SEC accepted to work with acknowledged copies of missing documents earlier submitted to it but however issued another set of requirements which Nulec had to fulfill before approval is given.

Accordingly, SEC requested an updated financials of the company which have to be approved at an advertised annual general meeting. Instead of attending the shareholder’s meeting at Lokoja, Kogi State, for which he was invited, Sir. Daniel Chukwudozie chose to approach a federal high court and obtained an ex parte order preventing the conduct of the annual general meeting claiming that he was not invited.  He swore an affidavit that he is a major shareholder with interest in the company. Though the court later struck out the suit for lack of merit, the meeting could not hold. Sir Chukwudozie followed up with a petition to SEC to withhold its approval for Nulec to list.

EFCC INVOLMENT

Following Sir Daniel Chukwudozie’s inability to forcefully takeover Nulec Industries Plc, he wrote a petition to the EFCC alleging that Bank PHB and its officers had conspired with Mr Ashok Israni, the Chairman of Nulec  to defraud him of N855 million under false pretence. In his petition dated March 1, 2011 addressed to the Executive Chairman, EFCC, Sir Daniel Chukwudozie pleaded with commission to help recover his investment which he now puts at N1.075 billion from Bank PHB (now Keystone Bank) and Nulec Industries; and to prosecute “the culprits involved in the huge economic crimes” against him. The matter was minuted to Head of Bank Fraud, EFcc Lagos on the 4th of April 2011.

Sir Daniel Chukwudozie’s lengthy petition written by his solicitors, Ikwueto, betrayed an invitation of EFCC to wade into a purely civil matter.  The complainant’s high connections to the “powers from above” was made very manifest when the leadership of the EFCC kept on reconstituting the teams investigating the matter until the last one set up on the 16 June 2012 headed by Mr. Gbenga Ogunsakin “did the job”. The earlier teams that investigated the matter  had seen through the trump up allegations and returned a “no case” conclusion to their bosses but the “motivation” readily offered by the complainant and the threat of the interest of the presidency in the matter spurred the later team to arrive at curious conclusion that the Nulec, the  bank and the staff  should be prosecuted while leaving other parties to the offer like the financial accountants and valuers whose inputs the investors relied upon to buy the shares.

Sir Daniel Chukwudozie’s boast of contacts in the presidency and the top echelon of the EFCC became evident in the way and manner the investigators refused to acknowledged the facts of the transactions. The irony of the entire investigation is characterized in the following: 

•Criminalizing a purely commercial transaction;

•It is also curious that someone who has sworn an affivadit at the Federal High, Ikoyi Lagos that he is a major shareholder of Nulec Industries and has made efforts to be involved in the running of the company would now turn around to criminalize the process of become a shareholder and then claim that he was defrauded. The evidence to this fact was contained even in the complainant’s petition to EFcc and other documents provided by Nulec.

•Prosecution of bank officials including Sunny Obazee, who also invested N5.7 million in the same Nulec Offer.

•How come that EFcc is holding the bank responsible for other shares Sir Chukwudozie bought from his associates under secondary transaction market which the bank or any of its officers were not parties to? It is on record that Sir Chukwudozie bought on N62.7 million worth of shares but EFcc is now poised to recover for him monies he paid his associated to acquire their shares.

•Using of the financial accountants, who provided and sanctioned the financial information which helped to shape investors’ decision to invest as a prosecution witness;

•Refusal of EFCC to verify the authenticity claims in Sir Chukwudozie petition especially the identities of his co-investing associates;

•Insistence of EFCC in wasting public funds in instituting yet another case it is prepared to lose;

•Dragging the bank’s and its officer’s image to the mud for doing their jobs;

•The fact that investors also included 2 former executive directors of the bank (they were still executive directors during the offer) and some staff including one of the accused does make sense to EFCC. Now it is a case of a wealthy shareholder harassing other shareholders and institutions using the instrument of government.

•The fact that the total investment of the bank staff members in the Nulec Offer was in excess of N186 million did make sense to Efcc since they already have a mandate to recover funds for Sir Chukwudozie by arm-twisting a more liquid bank and Nulec.

•It is interesting to note that the EFCC Head of Operation Lagos, Mr. Kwarba Iliyasu insisted that Sir Chukwudozie must be refunded his investment or the transaction will be criminalized and he has carried out his threats and here we are in court. 

•Is it possible that Sir Daniel Chukwudozie given his status in the country can convert the EFCC to a recovery agent?

What is the EFCC’s motivation in pursuing, advertising and prosecuting this case if not incompetence or graft? Who is funding the media blitz against the Nulec, Keystone Bank and its staff and for what end in spite of the fact that the case is in court?

It is curious that all these are happening now when Sir Daniel Chukwudozie and his company Dozzy Oil & Gas Limited who were implicated in fraudulently collecting about N2 billion Oil Subsidy Payments are being investigated by federal government. 

It is worrisome that EFCC is involving itself in this well planned diversionary tactics by Sir Daniel Chukwudozie to shift public attention from his impending arraignment for oil subsidy fraud.

It is up to the individuals whose character and integrity are being assassinated by the media oiled by Sir Daniel Chukwudozie and EFCC to take appropriate legal actions for a redress.

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