26 November 2012

Nigeria: Confusion As Labour Minister Is Cited in Subsidy Deal Gone Awry

Controversy continues to swirl over the ownership of Pinnacle Contractors Limited, one of the companies indicted by the Aig-Imoukhuede Committee on subsidy claims, as fresh facts have shown that the company was sold to Masters Energy Oil and Gas Limited two years ago by the family of the Minister of Labour and Productivity, Mr. Emeka Wogu, contrary to reports linking the company to the minister.

There were reports in some national dailies (not THISDAY) during the weekend, linking the minister to the company, which was indicted for subsidy fraud amounting to N2,755,646,744. 04.

But THISDAY investigations revealed that the company was sold in 2010 by the Wogu family before the alleged subsidy fraud, for which the company was indicted.

However, when contacted Wogu said he has no links with Pinnacle Contractors.

Sources told THISDAY that the company was sold to Masters Energy Oil and Gas Limited "lock stock and barrel," that is, without retaining any interest.

The sources however disclosed that after acquiring the company, Masters Energy continued to use the name of the family to get import allocations, which were transferred to the parent company (Masters Energy).

With the change of ownership, the new directors of Pinnacle Contractors include the Chief Operating Officer (COO), Mr. Femi Sotunde, Uju Obi, Onu Ogbonna and Felix Eribo.

These directors, it was learnt, are also signatories to the company's (Pinnacle Contractors) accounts with Enterprise Bank Limited.

THISDAY gathered that for Pinnacle Contractors to qualify for import allocation, and in accordance with the Petroleum Support Fund (PSF) guidelines, the company, which has no storage facilities, entered into throughput agreement with Masters Energy, which has large storage facilities in Lagos.

It was learnt that in the controversial transaction, in which the Letters of Credit (LC) were opened through First Bank Plc, Masters Energy used Pinnacle's allocation to buy petrol from two international traders, Vitol and Sapil Energy.

MT Songa Ruby Ex Haruna Express and MT AOG Alexandra Ex Louisiana Getty (MT Favor) were the two Mother Vessels used to import the products, according to sources familiar with the transactions.

It was learnt that in one of the transactions, Masters Energy imported the products, using the same Mother Vessel with Heyden Petroleum and Capital Oil and Gas Limited.

Masters Energy's allocation in the vessel was 10,000 metric tonnes (MT) while Heyden Petroleum's allocation was 5,000MT. The volume of products belonging to Capital Oil in the said vessel could not be ascertained.

However, the Aig-Imoukhuede Committee faulted these transactions and indicted Pinnacle Contractors Limited for N2,755,646,744.04 subsidy fraud.

Pinnacle Contractors Limited was one of the 25 oil-marketing and trading companies (OM&Ts) that were recommended for criminal investigations by the Presidential Committee on Verification and Reconciliation of Subsidy Payments headed by the Managing Director/Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig-Imoukhuede.

President Goodluck Jonathan had set up the committee in July to verify and reconcile the report of the technical committee, also headed by Aig-Imoukhuede, which was set up by the Federal Ministry of Finance last May to verify all claims and payments made to marketers in 2011.

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