NNPL spent N20 billion on ghost consultants, faces litigation, as Senate indicts Mele Kyari-led management of N102.6 billion crude oil scam

The Nigeria National Petroleum Limited, NNPL has once again come under spotlight of fraud as the agency was accused of paying N20 billion to ghost consultants. The lid was blown open by Ogun State government after which it dragged the Nigerian National Petroleum Company Limited to court over unpaid tax liabilities to the tune of N9 billion, which the documents have been made to various online news outlets last weekend.

Amid the scandal, Nigerian Senate adopted its Committee on Public Affairs Report on Wednesday, that the Nigerian National Petroleum Corporation was not transparent on crude oil lifts to warri and Kaduna refineries where it was discovered that over N102.6 billion could not be accounted, thus, confirming the query earlier raised by the Office of the Auditor-General for the Federation which focused on 2016.

In the report, queries raised against 37 Ministries , Departments and Agencies, MDAs, by the Office of the Auditor-General for the Federation were sustained while those against 43 others were vacated.

Top among the agencies indicted, was the Nigerian National Petroleum Company Limited over alleged failure to provide details of crude Oil delivered to Warri, Kaduna Refineries worth about $376, 655,589 (N102.6 billion) in the audited year.

The query reads: “From the review and examination of domestic Crude Oil Lifting sales profile presented for audit verification, it was noted that several deliveries were stated to be jointly lifted by or delivered to Warri Refinery and Petrochemical company, WRPC, and Kaduna refinery and Petrochemical Company without necessary details or breakdown of what was delivered to respective companies.

“From the examination carried out a total oil lifting of 8,399,017; bbls with a total sales values of $376, 655,589 (N102.6 billion) was stated to have been lifted jointly by these two companies.

“The failure to properly separate these deliveries and charge directly to each company makes it difficult to reconcile and account for each lifting.”

The Senate therefore upheld the recommendation of its Committee asking the Group Managing Director of NNPC, Mele Kyari to ensure specific details of crude delivered to the two refineries for audit.

Meanwhile, the Group Managing Director of NNPL, Mele Kyari was again fingered in a fresh multi-billion naira fraud that the corporation is battling hard to cover up which an insider said bothers on pipeline surveillance contract awarded to ex-militant, Oweizide Tompolo and despite moves by the National Assembly to probe him, nothing was heard further.

In another wave of financial malfeasance rocking the NNPL,Ogun State government further alleged that there was outright stealing by the staff of the defunct Petroleum Products Marketing Company (PPMC), who allegedly paid a total sum of N1 billion to its consultant, Messres Safaya, as part of the money she helped them to save on the tax refund demands by the Ogun State government. The fraud was made possible following the transition of the PPMC, which the NNPL takes over the retailing, filling stations, retailers and NNPC trucking, meant for vessels tank farms and others.

The development prompted Ogun State to approach the Court after discovering that NNPL made payment to itself to the tune of over N1 billion instead of making payments to it.

The Applicant (Ogun State government) therefore approached this court seeking the following relief:

“An Order authorizing Temidayo Sokunbi, an officer in the Legal Department of Ogun State Internal Revenue Service to levy a distress on the Respondent by its goods, other chattels, bonds or other securities or upon any land, premises or place of business of the Respondent situate at Mosimi, Sagamu, Ogun State for the sum of N8,500,000,000.00 (Eight Billion, Five Hundred Million Naira) being its tax liability for the year 1999-2020;

“AN ORDER authorizing Temidayo Sokunbi, an officer in the legal Department of Ogun State Internal Revenue Service to execute the said warrant of distress as may be issued by the 1st Applicant and if necessary to break open building or place in the daytime for the purpose of levying such distress and if required to enlist the aid or assistance of a Police Officer who shall assist in the execution of the warrant of distress issued pursuant to the Order of the Honourable Court.”

According to the court document obtained by journalists, the brief summary of facts, reads, “The application against the Respondent is in connection with its statutory responsibility to deduct and remit deductions from its Ogun State resident Employees to Ogun State Revenue Service and is predicated on an allegation of under deduction and under remittance of taxes for years 1999-2020.

“The Applicant relies on four notices of Assessment dated 4 of November, 2021 and 26 April,2022 for N1,042,142,147,804.80; N1,595,688,650.06; N872,753,586.09 and N15,116,469,168.34 were served on the Respondent in respect of its tax liability for 1999-2020.

“In all, a total of N18,857,497,691.62 was claimed by the Applicant vide its letter of 10th of August, 2022 which also gave 7 days notice of intention to apply to Court for an Order to levy a distress for non-payment.

“The Respondent duly objected to the additional assessment via a letter dated 15th August, 2022 following which parties made a futile appearance at the Tax Audit Reconciliation Committee (TARC) and subsequent to which the Applicant issued the Respondent with its Notice of Refusal to Amend the tax liability dated 12th October, 2022 insisting on the sum of N18,857,497,691.62.

“According to the Applicant, in its bid to finding an amicable settlement of the unresolved tax dispute, there was an offer by the Governor of Ogun State to accept the sum of N8.5 Billion in full and final settlement of the tax liability for 1999-2020 hence the current application is to levy a distress the Respondent for the sum of N8,500,000,000.00.”

A counter-affidavit in opposition to the motion on notice dated March 20, 2023, deposed to by Kolawole Ogundipe, said, “I am a Litigation Secretary in the office of Royal Heritage, Counsel to the Respondent herein and by virtue of which I am conversant with the facts therein. I have the consent and authority of my employer and the Respondent to depose to this affidavit.

“Whilst reviewing the facts of this suit in our office at No.7, Ikoyi Club, 1938 Road, Ikoyi on 24th of March, 2023, at about Noon, I was informed of the following facts by Chike Okoye of the Respondent’s Legal Department and I verily believe him as follows: (1) That a copy of the Applicant’s Motion on Notice dated 20th of March, 2023 was served on the Respondent on the 24th of March, 2023 together with a 16 paragraphs affidavit of Kayode Ogunkoya and written address filed in support of the application.

“Paragraphs 3,5,6,10,11 of the affidavit is true while the other paragraphs vis 4,7,8,9,12,13,14,15 and 16 are false and do not represent the true position of affairs between the parties.

“He has read the application and knows that the application is in connection with the Respondent/Applicant’s statutory responsibility to deduct and remit deductions from its Ogun State resident employees to Ogun State Revenue Service and is predicated on an allegation of under deduction and under remittance of taxes for years 1999-2020.

“On being served the four notices of Assessment dated 4th of November, 2021 and 26th April, 2022 for N1,042,142,147,804.80; N1,595,688,650.06; N872,753,586.09 and N15,116,469,168.34 in respect of its tax liability for 1999-2020, the Respondent duly objected to the additional assessment via a letter dated 15 August, 2022 following which parties made a futile appearance at the Tax Audit Reconciliation Committee (TARC) and subsequent to which the Applicant issued PPMC with its Notice of Refusal to Amend the tax liability dated 12 October, 2022 insisting on the sum of N18,857,497,691.62.

“From the deposition in the Affidavit of the Applicant, he saw that in its bid to finding an amicable settlement of the unresolved tax dispute, there was an offer by the Governor of Ogun State to accept the sum of N8.5 Billion in full and final settlement of the tax liability for 1999-2020 hence the current application is to levy a distress the Respondent for the sum of N8,500,000,000.00.

“He also saw a copy of the letter dated 14th November, 2022 with Ref No IRS/RM/ENGR/1172 on which the current application is predicated and know for a fact that the letter is addressed to the Group Executive Officer of Nigeria National Petroleum Corporation, and was never served on the Respondent.

“The Respondent/Applicant’s duly and validly raised an objection to the additional Notices of Assessment. The Applicant failed the assessment criteria by giving an arbitrary assessment without looking carefully at the books of the Respondent or carrying out proper enquiries relating to the Respondent’s PAYE transactions over the period in question.

“The Applicant acted improperly, vindictively, and capriciously and failed to make honest estimate of the proper figure of the assessment for which the provisions of PITA apply.”