The scope of investigation into the activities of Hedge Fund Securities, which was allegedly used by Delta State government to siphon billions of naira commission from the Paris Club Refund has expanded to other agencies, including the Federal Inland Revenue Service Forensic Investigations, for possible tax evasion.
Other areas of interest of investigation of the company by security agencies, include criminal breach of trust, fraud, abuse of public trust and contract splitting, among others.
The investigation of the company followed a petition to the Economic and Finance Crimes Commission (EFCC), by a consultancy firm, Mauritz Walton Ltd, that consulted for Delta State government on the Paris Club Refund.
Sources within the EFCC said: “We have reached an advance stage in our investigation, we would soon make our findings known.”
Maurits Walton had petitioned the EFCC last year over what the company describes as “payment of its fees to Hedge Fund Securities, a known front to people close to Delta State Government.”
Hedge Fund Securities was allegedly paid a substantial amount of money as consultants to Delta State on Paris Club Refund, after Mauritz Walton had successfully executed an agreed contract with the Delta State government.
In the petition, Mauritz Walton wanted the EFCC to probe a company, Hedge Securities, and other individuals named in the petition which according to it, were engaged as an after- thought to siphon consultancy fees due to the company. “Hedge Securities and other persons fronted for the government of Delta state to siphon the commission which would have been paid to Mauritz Walton for a job duly executed”, the petition said.
Titled: “Petition for the Recovery of Our Consultancy Fees Fraudulently Paid to Hedge Fund Securities and Others on the Reconciliation and Recovery of Over Deduction of Foreign Loans (1995 – 2006) Paris Club Refund on the Account of Delta State Government”, the petition calls on the anti-graft commission to dig deep into those behind formation of Hedge Securities and use its good offices “in recovering our full consultancy fees which is been paid to Hedge Securities, and other persons as consultants.”
The consulting firm accused Hedge Securities of reaping where it did not sow, adding “Hedge fund was primarily fronted by the governor’s brother in-law, and another friend of the governor, for the sole purpose of laundering and illegally collecting Consultancy fees on Delta State Paris Club Refund. This was done to avoid paying the legitimate consultant, Mauritz Walton Nig. Ltd, and to siphon the refund through 3rd parties and award of phony contracts.”
In a background information, the firm said it was engaged by Delta State government in November 2014 to reconcile and recover the state’s over deductions on foreign loans by the federal government.
“We immediately commenced work on the project and by December 8, 2014, we had fully reconciled the debt profile of Delta state and filed a demand with the federal government seeking a refund of $365,655, 143.86”, said the petition.
To back the claim, a letter of engagement signed by Kenneth Okpara, then state commissioner of finance, is attached..
The letter, dated November 19, 2014 with reference number: F.7/2/22, and addressed to the company, reads: “With reference to your proposal for recovery of excess deductions in respect of foreign loans, we are pleased to offer you consultancy appointment under the following terms and conditions”
One of the conditions was to review all foreign loans contracted by Delta state for the purpose of recovery excess deductions on behalf of the state government, and that all recoveries made in respect of the assignment will be paid into an account designated by the Accountant General, and 30% community charge on reconciled and recovered amount will be paid to the firm after deducting taxes.
In another letter, signed by the then Delta State Governor, Emmanuel Uduaghan, and addressed to then. Minister of Finance and Coordinating Minister for the Economy, Dr.Ngozi Okonjo-Iweala intimating her of appointment of Mauritz Wanton as its consultant.
Dated November 26, and referenced F.7/2/23, said in part: “I wish to inform you that the Delta State Government has appointed Messrs Mauritz Walton Nigeria Limited as the state’s consultants for the purpose of Back Duty Reconciliation and Recovery of Excess Deductions on foreign Loans on behalf of Delta State”
However, according to Mauritz Walton, the present Governor of the state, Ifeanyi Okowa, has refused the request for payment of the commission.
The company alleged that after spending time, money, traveling both within and outside the country to make sure the reconciled amount was paid to the Delta State government, its submissions to the state government for payment of its commission, were passed on to “the governor’s brother in-law and close friend and associate for the purpose of engaging a new consultant.”
“Within weeks we received a termination letter from the state government on a project that had already been completed and a new consultant by name of Hedge Fund Securities was appointed”, the petition stated.
However, it was learnt that attempts by the former Commissioner of Financ in the state, David Edebvie, to make the issue go away by offering Mauritz Walton $100, 000, was vehemently rebuffed by the company.
At present the sum of N98,317,680,420.50 has been paid to Delta State, and the government has paid billions of Naira to Hedge Securities in several tranches.