An interim investigative police report on the involvement of Capital Oil and Gas Limited in the fuel subsidy scheme has established that the company and its Managing Director/Chief Executive Officer, Mr. Ifeanyi Ubah, and four of the company's staff, colluded with others to defraud the Federal Government of Nigeria of billions of naira.
The four indicted staff of Capital Oil are its Executive Director, Operations, Mr. Orji Joseph; General Manager, Operations, Mr. Ogbuokiri Chibuzor; Depot Manager, Mr. Okorie Onuabuchi; and Head of Training, Mr. Nsikan Usoro.
The report, which was obtained exclusively by THISDAY, was written and signed by the Commissioner of Police, Special Fraud Unit (SFU), Ikoyi, Lagos, Mr. Ayotunde Ogunsakin, on November 5, 2012, and addressed to the Chairman, Presidential Committee on the Verification and Reconciliation of Fuel Subsidy Payments, Mr. Aigboje Aig-Imoukhuede.
It showed that Capital Oil was involved in 26 transactions covering the importation of 538,740,000,000 litres of petrol and was paid N43.291 billion as subsidy claims in 2011.
The report detailed the arrest and interrogation of Ubah and four others by the SFU between September and October, during which it was discovered that the alleged irregular claims were made based on fraudulent fabrication and forged documents in which about N43.291 billion was paid to Capital Oil as subsidy claims.
The report noted the irregularities were in the form of alterations, wrong reference numbers and duplication of vessels, coupled with cargo quantity inflation.
It was the purported suspicious nature of the transactions and claims noted by the presidential committee's auditors that compelled the committee to request the police for a thorough investigation into the activities of Capital Oil and Ubah.
According to the report, "Import duty certifications, bill of ladings, Letters of Credits (LCs)/Form Ms and other documents were perfected with the active connivance of the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA), bank officials, Nigerian Ports Authority (NPA), the Nigerian Maritime Administration and Safety Agency (NIMASA) and other port authorities clearing agencies.
"These fraudulent practices were formatted from the point of ship to ship transactions involving mother vessel and daughter vessel documentations, cargo quantity inflation and other underhand practices perfected to undermine transparency in the petroleum subsidy payment process."
The police, in the report, alleged that Capital Oil, its management and proxies, forged documents, made fraudulent representations, obtained under false pretence, and stole Federal Government money by claiming monies paid on the transactions.
The report showed that Ubah was invited on September 9 and interrogated on the queries and inconsistencies reported in the complaint by the presidential committee against Capital Oil.
It indicated that the list of existing and noted infractions compiled by the auditors was used by the police as their guide for interrogation.
It went further to allege that the "response of the suspect (Ubah) confirmed the concern of the presidential committee and investigation team," adding that it was on this note that it became necessary to detain the suspect for further interrogation.
"An affidavit was sworn to request the Lagos State judiciary to grant an order for the remand of the suspects. This order was granted by the Magistrates Court 5, Tinubu, Lagos, on October 11, 2012," the report said.
During interrogation, Ubah was purported to have stated that Capital Oil was incorporated in 2009 and commenced operations in 2010.
"He stated further that the company commenced full activity in subsidy scheme in 2011 and that Oil Force Limited, is a sister company of Capital Oil and Gas.
"He confirmed that the two companies trade on the approval of DPR and maintain different assets. He averred that the operational/transactional difficulties necessitated the formation and use of Oil Force to format transactions.
"This was due to the heavy indebtedness of Capital Oil and Gas to the banks and that the decision was taken to gain customer confidence.
"He insisted that Access Bank Plc financed the infrastructural development of the two companies and 70 per cent of the their import transactions are done through Access Bank," the report stated.
Ubah was also said to have insisted that it was the duty of the DPR to check quality and the quantity of cargo, maintaining that Capital Oil used open credit facilities in all the transactions.
He informed the police that the firm always notified NPA, DPR, PPPRA and other authorities to witness the discharge and facilitate
port/harbour reception and storage at the tank farm, and the details of these transactions were submitted to the presidential committee.
Irrespective of its findings, the police concluded that to establish a prima facie case against the suspects, it would be necessary to obtain details of all the transactions from the Federal Ministry of Finance from the Office of the Accountant General of the Federation to obtain the financial instruments, as the original documents that were forged would be needed to establish forgery.
The police added that all the documents, including certified copies of the financial instruments from Access Bank, LCs and bills of lading covering the petrol cargoes brought in by Capital Oil, would be needed to consolidate their proof of evidence.
"At the conclusion of these ongoing actions, a consolidated report will be submitted on a prima facie case of conspiracy to commit felony, money laundering, forgery, stealing, obtaining by false pretence and economic sabotage against Capital Oil and Gas, Ifeanyi Ubah and those found to has conspired, colluded, or aided the culprits," the police informed the presidential committee's chairman.