For a Lagos High Court sitting in Ikeja, it would be a herculean task deciding the case instituted against Mahmud Tukur, Managing Director of Eterna Oil Plc and son of the national chairman of the Peoples Democratic Party (PDP), Alhaji Bamanga Tukur, and some of his associates, Alex Ochonogor and their company, Eterna Oil and Gas Plc by the Economic and Financial Crimes Commission (EFCC).
The three defendants were arraigned alongside Abdullahi Alao, son of prominent businessman, Alhaji Arisekola-Alao, and managing director of AxEnergy, an oil company, by the anti-graft commission last August before Justice Adeniyi Onigbanjo over an alleged N1.8 billion fuel subsidy fraud.
The evidence the EFCC parades against Tukur and Ochonogor seems to have been hastily put together in the desire to prosecute a high profile corruption case and in so doing earn itself some plaudits and generally swing the court of public opinion against them.
One cannot but wonder how possible it is to effectively prosecute them in a country where criminal trials are based on the proof of evidence which by law is prepared by the prosecution.
For many observers who understand the tangled tale that roped the duo and their company into the fuel subsidy fraud, how the anti-graft commission will prove its case against them and secure their conviction is left to be seen and imagined. This is essentially predicated on the less than impressive investigation of the case by the crime-busting agency. For instance, a careful study of the charge sheet and the proof of evidence the commission made available to the defendants reveal that there is barely any shred of evidence linking or establishing a nexus between the first and second defendants with the alleged crimes.
The genesis of Eterna's travail began in the third quarter of 2010 when the firm obtained import licence to import 30,000 metric tonnes of PMS and entered into a joint venture agreement with Sahara Energy whereby it (Sahara Energy) carried out the importation to wit: product purchase, nominating vessel, freight, insurance and loading and offloading of the products while Eterna Plc made available its import permit.
The source also added that under the period in question, Eterna made available its import permit while the actual importation was conducted by Ontario Oil & Gas Ltd.
According the information obtained by THISDAY investigation, the oil marketing firm's earnings was limited to upfront fee for the use of its licence while all subsidy payments were paid to Sahara. In other words, Sahara Energy was totally in charge of the logistics of this importation. The Certificate of Quantity, Bill of Lading, Certificate of Origin, Certificate of Transfer, Cargo Manifest and Certificate of Quality were obtained by Sahara Energy, delivered to Eterna who placed absolute reliance on the documents and forwarded same to the PPPRA.
Furthermore, in the fourth quarter of 2010, Eterna and Ontario Oil & Gas Ltd entered a JV for the importation of 15,000 metric tonnes of PMS. In the first quarter of 2011, it also entered into a joint venture agreement with AxEnergy for the importation of 30,000 metric tonnes of PMS. Following the agreement, AxEnergy was responsible for the credit financing, importation and sale of product, while Eterna made available its allocation licence and earned a marginal fee upfront for the use of its licence.
AxEnergy contracted Mercuria Trading NV and the vessels MT Fulmar and MT Panther were chartered by AxEnergy to freight 11,861.509 and 12,952.782 metric tonnes of PMS respectively. The vessels received their products from a mother vessel called MT Emirates Star.
Checks also reveal that, in the third quarter of 2011, Eterna entered into a second Joint venture with AxEnergy for the importation of 10,000 metric tonnes of PMS. As was the case with the first transaction, AxEnergy contracted Napa Petroleum for the purchase of the product. AxEnergy also chartered a shuttle vessel, MT Deepwater, for two voyages to load 5,000 MT of PMS each from the mother vessel MT Valle Di Castglia. "In all the situations above, AxEnergy carried out the actual importation of PMS while the allocation licenses were in favour of Eterna."
According to a source with knowledge of the investigation, the firm disclosed that during the investigations, EFCC claimed in some of the documents it said it obtained via the internet from Lloyd's Registers of Ships' website in the United Kingdom that some of the vessels were not at the points of discharge as at the dates indicated.
The anti-graft commission alleged that the vessel, MT Valle Di Castiglia that conducted ship-to-ship transfer between October 6-8, 2011 was at Turkey within that same time. The implication of EFCC's allegation is that the documents presented to obtain subsidy under recovery were contrived as the vessels either discharged fewer quantity of PMS than indicated in the ship manifests or no importation was carried out, placing absolute reliance on the unverified and unconfirmed documents purportedly from Lloyd's, in spite of having received written affirmation of the transaction by the shipper, the tank farm owner and all the other statutory agencies present at the point of discharge.
To many analysts, one issue EFCC has yet to grasp is the degree of reliance it can place on documents obtained online via internet from a website purported to belong to Lloyds.
When Eterna was confronted with these revelations, its managing director and head of financial controls volunteered statements that the documents supplied by it to the PPPRA were obtained from its JV Partners. The JV Partners were equally grilled by the anti-graft commission.
Perhaps, one question that is agitating the minds of many observers following the case is: when has criminal liability become vicarious or collective as EFCC has made it to be especially given the allegation that AxEnergy had admitted that the purportedly fraudulent documents were generated by it without any knowledge or assistance by or from Eterna? This is against the backdrop of the allegation by a legal analyst familiar with the case that the EFCC refused to arrest those responsible for the fraud and instead chose to go after the innocent.
From the proof of evidence, EFCC investigations of bank accounts show conclusively that all subsidy monies were paid into a nominated JV account and all the sums received transferred to AxEnergy in accordance with the terms of the JV agreement. Eterna did not retain any sum from the subsidy payments and there is documented proof of this.
From the statements made by the managing director of AxEnergy who is the third defendant in the present criminal trial, he admitted voluntarily under caution as follows: AxEnergy was in a JV Agreement with Eterna. Eterna obtained import allocations from the PPPRA on the strength that it met all the stipulated requirements. AxEnergy was solely in charge of arranging credit financing, importation, freight, insurance, loading, offloading and sale of the imported PMS.
Specifically, AxEnergy obtained the Pro Forma Invoice from the supplier, opened the letters of credit using its credit line with Sterling Bank Plc, chartered the vessels, appointed the shipping agents and surveyors, insured the cargo, paid all statutory duties and levies and obtained requisite evidence of payment there-from, sold the cargo and received payment directly into its own accounts, and obtained the following documents which it submitted to Eterna. They include certificate of quantity and bill of lading, certificate of origin; certificate of transfer; cargo manifest and certificate of quality as proof of actual importation.
The federal government agencies set up to ensure the integrity of the PSF and had the means, mandate and powers to verify the actual importation equally certified as genuine all the documents presented by AxEnergy. For instance, in order to prove its innocence, Eterna Oil and Gas Plc was said to have told EFCC that there was no way the company and its directors could be involved in the subsidy fraud because in the course of importing fuel into the country under the subsidy regime, at every occasion it was importing cargoes and lodging application for claims. It was required to submit its application accompanied by 38 critical import documents from different organisations ranging from civil, paramilitary to military for verifications.
Also, the inventory of import documentation required to be submitted with a marketer's claims for reimbursement includes, financing banks records, DPR, Nigerian Navy and the Nigerian Customs clearances and reports.
The requirements to assemble and display this exhaustive and copious information in respect of the gasoline import transaction is to ensure that every aspect of the importation process relating to an application for a PSF refund is fully captured in the records for the benefit of the PPPRA who retain responsibility for approving payments to marketers.
Also, the participating marketers under the PSF scheme do not pay the refund to themselves neither is the remittance of payments automatic after the submission of import documents to the PPPRA. All PSF payments are still subject to the approval of the PPPRA, which ultimately make the recommendation through the CBN for the settlement of the marketer's claims.
Little wonder the chairman of the Presidential Task Force on Petroleum Revenue and former chairman of the Economic and Financial Crimes Commission (EFCC), Mallam Nuhu Ribadu, recently blamed the immediate past management of the Petroleum Products Pricing Regulatory Agency (PPPRA) for the leakages in the fuel subsidy scheme.
Ribadu, in his assessment of the administration of funds earmarked for subsidy on petrol under the Petroleum Support Fund (PSF), which is statutorily managed by PPPRA, stated that the agency could not have claimed ignorance of the underhand dealings in the scheme.
He stated that officials of PPPRA could not lay claims to being innocent of the sustained corruption in the administration of funds under the PSF scheme, adding that the agency should be held responsible for the high-profile financial mess within its domain.
Speaking at the July edition of the Nigerian Electricity Regulatory Commission (NERC) 'Distinguished Guest Conference' in Abuja, Ribadu said: "Nobody can take a penny from the government unless the government allows it.
"If I were to head the panel on fuel subsidy, I will catch everybody in PPPRA because nobody can steal such amounts of money if the PPPRA did not allow it. They have all the documents to detect any form of anomalies; bills of laden and what have you, but they never made use of these and they expect to be declared innocent of such dealings within their domain."