FCMB, NPA in $17m forex mess

First City Monument Bank (FCMB) may have struggled in vain to conceal news of the $17 million it allegedly stole from the Nigerian Ports Authority (NPA) through letters of credit.

The case has lingered since 2007, with FCMB all this while allegedly making efforts to cover its tracks and bribing NPA officials to keep sealed lips.

However, TheNiche stumbled on documents allegedly showing how the alleged fraud was committed in connivance with former NPA Managing Director, Abdulsalam Mohammed, and executive directors on the board.

Disagreement leads to exposure

Around June this year, other NPA officials who know about the fraud allegedly demanded their own share of FCMB “settlement” which the bank considered a blackmail.

This led to the formation of two camps. Disagreement between those seeking the recovery of the $17 million and others who favour taking bribe led to the exposure of FCMB.

Among other shenanigans in the bank, its Managing Director, Ladi Balogun, allegedly employed some of his females friends in sensitive positions at the headquarters who boss more qualified staff. All this, however, pales into insignificance against the NPA foreign account saga.

Discovery by consultant

In 2007, NPA engaged a consultant, Nobel Sholotan Nigeria Limited, to review and reconcile unutilised balance in its letters of credit.

Nobel Sholotan discovered $10.3 million in accounts with FCMB and a few other banks. FCMB owned up but admitted that part of the foreign exchange (forex) in its vault was missing.

It informed NPA in a letter dated October 29, 2007 that $2.5 million standing to its credit was unaccounted for and its whereabouts unknown. The letter explained that the amount represented only 15 per cent of NPA’s letters of credit managed by FCMB.

In the letter, FCMB apologised to NPA for the missing sum and promised to evolve a repayment plan.

But instead of demanding that the money be remitted to NPA’s account, Mohammed, then NPA boss, proposed a repayment plan of one year in a letter dated October 31, 2007 without demanding interest.

MoU on repayment

FCMB asked for a memorandum of understanding (MoU) between it and NPA to formalise the payment. This was contained in a letter it wrote to NPA dated November 1, 2007. NPA signed the MoU on December 31, 2007 but FCMB failed to sign.

The MoU states in part: “FCMB by its letter dated 29th October 2007 had stated that it was investigating an unaccounted amount of $2,594,460.09 standing to the credit of the authority representing 15 per cent of the value of the letter of credit and has remained unaccounted.

“FCMB had offered to enter into negotiations with the authority vide its letter dated 29th October 2007 on a repayment plan on terms agreeable between the parties.

“The authority by its letter reference no. HQ/EDF&A/WP/AD/B5/352 dated 31st October 2007 conveyed approval to FCMB on the proposed repayment plan. FCMB has by letter dated 1st November 2007 accepted the repayment schedule and plan of the authority.”

There were other agreements between NPA and FCMB in the MoU. But there is no evidence that FCMB has made payment to NPA since the MoU was made.

Sources in NPA and FCMB alleged that FCMB has spent millions of naira to bribe NPA officials in order not to pay the money, and that officials of the two organisations are determined to continue with the alleged bribery to avoid the repayment.

It was learnt that the bank allegedly paid an official of NPA to destroy the MoU and other documents relating to the letters of credit.

Two FCMB officials were allegedly sacked when they suggested that the repayment would enhance the integrity of the bank and boost its public image.

Letters of credit inherited

FCMB had acquired Cooperative Development Bank (CDB) where the letters of credit were domiciled. When it acquired CDB, it took over both the assets and liabilities. Part of such liabilities are the letters of credit opened on behalf of NPA.

NPA used the letters of credit to import spare parts for its dredging vessel, River Chalawa, between 1990 and 2004, which needed to be repaired.

The questions several NPA officials are asking about the $17 million still lying in the vaults of FCMB include: Did FCMB admit that it withheld NPA funds? Has the money been paid? Has the money yielded interest since 2004? Is FCMB supposed to repay in instalments as if it borrowed the sum? Do customers lend money to banks?

NPA Assistant General Manager (AGM) Public Affairs, Musa Iliya, could not be reached for comment. He did not answer calls to his telephone line or respond to a text message.

But one of his former aides quoted Mohammed as saying that his successors should bear the blame of failing to recover the money from FCMB.

On October 3, 2014 TheNiche sent an email to Balogun; FCMB Group Head (Marketing and Communication), Ikechukwu Kalu; and Head Corporate Communications and Corporate Social Responsibility (CSR), Uche Mojekwu.

Kalu asked TheNiche to give the bank more time, Mojekwu said the bank was assembling its team to investigate the matter.

“We are still working on your requests. We are assembling our team to look into your issues. You will hear from us very soon,” Mojekwu told TheNiche on the telephone.

Thereafter, both Mojekwu and Kalu did not respond to telephone calls.

A source in FCMB said part of the reasons Kalu and Mojewu failed to respond fully was the alleged acrimony among information managers in the bank.

Mojekwu is alleged to be a confidant of Balogun who employed her because of their closeness. But Mojekwu is said to be the one who takes decisions in the department even though junior to Kalu.

Later, FCMB Head of Corporate Affairs sent a text message that “we are reviewing records on your enquiry and wish to invite you for an update meeting very shortly. We seriously appreciate your patience and thank you very much for your usual support.”

Alleged contract to build ship

On October 21, some FCMB staff, led by Company Secretary, Funmi Adedibu, held a meeting with TheNiche and denied that the bank entered into an MoU with NPA.

Adedibu argued that contrary to the establishment of NPA’s letters of credit at CDB between 1999 and 2004 to procure spare parts for River Chalawa, FCMB entered into a contract with NPA in 2005 to build a ship abroad for NPA.

She said payment for the ship was made in four tranches, which ended in 2012, the year the ship arrived Lagos and was received and celebrated by NPA.

Adedibu disclosed that at a later date after 2012, the ship manufacturer, whose name she said she did not know, complained to NPA that FCMB did not pay the full amount for the ship. She said she did not know the cost of the ship.

Contention between NPA and FCMB, Adedibu told TheNiche, arose when the bank told NPA it would not pay the balance demanded by the manufacturer.

“FCMB had a contract with NPA for building a ship abroad for the authority. The payment was in four tranches and we made necessary remittances to the manufacturer and the money was paid completely.

“The ship arrived Nigeria and was celebrated. The manufacturer later wrote to say the money was not complete, but NPA wanted us to pay him and we said no because in 2012 we thought this transaction was over,” she recounted.

Adedibu admitted that FCMB had an encounter with Noble Sholotan, the NPA consultant that discovered the letters of credit, but said “there was no maintenance contract between FCMB and NPA. Noble Sholotan came to blackmail and harass us.”

Throughout her presentation, Adedibu could not mention specific amounts, specific dates, produce documents or photographs of the ship celebration in 2012 to back up her claims.

“If there were any issues, it should come from either NPA or the ship manufacturer, what is your own interest?” she asked.

However, another employee in FCMB, who did not want to be named, confirmed that the bank agreed to pay NPA $2.6 million because as one of the collecting banks to NPA, there were some documents it could not provide when account was reconciled.

The source could not confirm if the money was paid.

Back in NPA, Iliya said he is still consulting with the finance department for clarification but added that he had no knowledge of any ship building financing contract between FCMB and NPA in 2005 or the celebration of a new ship in 2012.

TheNiche forwarded some questions to NPA Managing Director, Habib Abdullahi, who directed the Executive Director (Maritime and Operations), David Omonibeke, to respond.

Later, Omonibeke said on the telephone: “I have gone through your request concerning the FCMB matter but I don’t have anything to tell you about it for now.”

A source in the NPA disclosed that everyone, including Abdullahi, is being careful about what they say to the media on the issue because it is a serious one.

“Do you think it is a small matter? he asked rhetorically.

TheNiche is still studying other documents that relate to suspicious activities at both NPA and FCMB. These will be made public in subsequent reports.