Investigation: AFREXIM Participated In Defrauding EMIS Telecoms Of $5m - EFCC





*FCMB admits  opening accounts for EMIS following a $5m facility 






A leaked memo from the Economic and Financial Crimes Commission (EFCC), has revealed how the AFREXIM Bank actively participated in defrauding Em-international System Nig. LTD (EMIS) of five million Dollars.




The leaked memo, dated April 28, 2017, also fingered FCMB and COM-DEV and seven others as suspects in the alleged criminal conspiracy.




The memo, signed by the then  EFCC Head, Bank Fraud Section, Lagos, Bawa Usman Katungo, said that AFREXIM and FCMB  were active participants in the fraud.




"AFREXIM Bank participated actively to defraud an investor of a member country (Nigeria) EMIS the sum of $5million.


"Investigation revealed that FCMB & AFREXIM Bank, with intend to defraud RMIS, refused, neglected or did not exercise due diligence and refused to adhere to the condition precedent to disbursement of funds as stipulated in the tripartite agreement in the discharge of its obligation of payment of the sum of $5million to COMDEV International," the EFCC report said.


It said that investigations further revealed that FCMB, AFREXIM and COM-DEV all benefited in the transaction while EMIS became their victim.


"Investigation also revealed that AFREXIM acted in bad faith by making full payments on the 22/12/2000 (a day after the signing of the agreement) in obvious.deliberate violation of the tripartite agreement.




" Investigation revealed that COMDEV Wireless till date is yet to supply the telecoms equipment despite full payment by AREXIM Bank," findings from the EFCC report said.




The EFCC memo, which was titled,  "INVESTIGATION REPORT RE ALLEGATION OF FRAUD AGAINST FIRST CITY MONUMENT BANK PLC, COM-DEV & AFREXIM BANK BY EM- INTERNATIONAL SYSTEM NIGERIA LIMITED


COMPLAINANT: EM-INTERNATIONAL SYSTEM NIG. LTD (EMIS)" explained that EMIS Telecoms failed to get value for its money.




"In view of the above findings, it is a fact that EMIS was systematically defrauded by the trio of FCMB, AFREXIM & COM-DEV. EMIS did not get value for the money AFREXIM paid to COM-DEV for telecom equipment on its behalf. It can be concluded that FCMB and AFREXIM Bank and COM-DEV conspired and defrauded EMIS. 




"They were negligent and did not apply professional diligence by discounting the promissory notes upfront on the two invoices totaling approximately $5million to Phase Atlantic/COMDEV of Canada without following the letters and spirit of their tripartite agreement. 




"This deliberate negligence and lack of one diligence had crippled EMIS as a company, and greatly facilitated the non-performance of the equipment supply contract between COMDEV and EMIS. FCMB should be held liable for conspiracy and cooperate negligence and should refund EMIS all monies illegally deducted from EMIS account," it said.


The EFCC therefore, said that, "AFREXIM Bank Cairo is to reimburse FCMB of all the monies it had repaid her servicing the loan, including calculated interest.


"AFREXIM Bank was party to the tripartite agreement, she can use the legal nexus created by the tripartite agreement to press claims of recovery on COMDEV of Canada or through international Court/Arbitration," EFCC advised.


It added that, "EMIS cannot do this since she was not a party to the tripartite agreement".




The memo said that investigation   established a strong nexus of criminal conspiracy between, AFREXIM, FCMB & COM-DEV with  intend to defraud the complainant by hurriedly discounting the promissory notes, A-DAY after the tripartite agreement was signed even when they knew that the equipment were not supplied.


"That AFREXIM Bank paid out the two separate sums on two separate invoices (one for equipment supply and the other for equipment installation and commissioning) on the same date," the memo said.


The memo said that in its response, FCMB admitted that it opened accounts for EMIS following a $5million facility it secured for EMIS from AFREXIM Bank, Cairo. 




"The Bank stated however, that EMIS, over the years became indebted and could not service the facility that was granted: In the circumstance, the bank had to create Commercial Papers and Bankers, Acceptance to enable it manage the account," the memo revealed. 




Others indicted by EFCC in the memo are, Ladi Balogun, Mr. Obaseki,  Biodun Oyapero, Mr. B.O. Oramah, Keith Ainsworth and  Anita Davis.

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