Capital Oil crisis: My case against Ifeanyi Ubah, by Coscharis boss

By LOUIS UBA

President of Coscharis Group, Dr. Cosmas Maduka, returned to the country at the weekend to throw more light on the raging loan saga with Capital Oil and Gas Limited, vowing that he would use every legitimate means at his disposal to recover the debt owed him by Capital Oil boss Ifeanyi Ubah.

“I will collect my money to the very last kobo,” Maduka said on a breach of contract between his company and Capital Oil which he said culminated into a loss running into billions of naira. But in a swift reaction, Ubah told Daily Sun in a telephone chat that he would no longer join issues with anybody on the matter since he had taken both Maduka and Access Bank to court over the transaction, this is even as he alluded to a plot by the bank to use the Cosharis boss to take over his Capital Oil assets.

“The case is already a subject of litigation in court and I don’t want to comment on it,” Ubah said. “But I know that the target is my business; they want to take over my assets and they would stop at nothing, including lies to achieve their target,” Ubah added. According to Maduka, his company Coscharis Group had entered into a Joint Venture (JV) deal with Capital Oil for the purpose of importing and distributing Premium Motor Spirit (commonly called petrol).

Maduka said his foray into the fuel business with Capital Oil was necessitated more by compassion to bail the young Ubah out of a credit crunch crisis as most Nigerian creditor institutions had refused to advance him any form of loan for his business. Vibrant Venture Limited was subsequently appointed as a warehousing agent for the joint venture partnership.

Maduka claimed after the joint venture deal was sealed, both companies were able to secure a loan from Access Bank for the importation of Premium Motor Spirit, but he alleged that Ubah and his company breached the terms of the deal by engaging in the diversion of the imported products and other fraudulent activities which had marred the ability to execute the joint venture deal as a profitable establishment.

“Capital Oil’s diversion of these products in collusion with the Shippers has made the repayment of the facility schedules to come from sales proceeds impossible,” said Maduka. “Accordingly, the exposure to Access Bank Plc stands at about N21billion while interest rate accrues. Capital Oil has also refused to release the 56,568,587.11 litres of PMS in the designated tank farm for this transaction under the management of our warehousing agent in its tank farm, for disposal to facilitate payment of our financial obligation to Access Bank,” he added.

Maduka who hails from the same Nnewi, Anambra State, as Ubah said he had to report the younger businessman to the Special Fraud Unit (SFU) when every effort to get Uba to live up to his contractual obligations in respect of the petrol import deal (including a meeting called by the traditional ruler of their town) failed to get Uba to the round table to sort out the matter.

Maduka showed Daily Sun various documents sourced from regulatory agencies to back up his allegations that Capital Oil did breach its terms of contract by not executing the letters of credit it collected for importing and discharging products in Nigeria so it could make claims to be re-imbused by the government under the fuel subsidy scheme.

“These products did not arrive,” Maduka said of the breached contracts. “And when Capital Oil was asked for the whereabout of the products, no satisfactory answer was provided,” he added. Ubah acknowledged Access Bank as its creditor “financing over 70 per cent of its importation” deals. Ubah who honoured an invitation by the Special Fraud Unit of the Nigerian Police on October 9 was detained till October 19 due to allegations of corruption – collecting subsidy funds without importing products – brought against his company by the Presidential Committee.

Ubah’s Capital Oil however absolved itself of any form of corrupt act, noting however that the Access Bank chief lacked the moral credibility to probe an industry in which he was also an operator with equity stakes in some of the oil importation firms, just as it alleged that Access Bank stood the greater chance of taking over its assets if its CEO, now auditing the industry, was left to have his way of barring the government from settling fuel subsidy debts owed the firm over a long period of time.

Such delay translates to the accumulation of more debts as the oil firm is inhibited from timely settlements of its debts to the bank and with more interest default payment fines coming, in the company could go bust, thus paving the way for a creditor to take over.

According to records initially released by Ubah’s aides, the company is owed about N14 billion in subsidy refund (otherwise known as Sovereign Debt Notes, SDN) while the monthly interest on the N21 billion loan secured through Coscharis is put at about N380 million “The allegations are spurious, they border on the absurd and merely intended to pull us down in order to achieve Aig-Imoukhuede’s dream of aiding his company – Access Bank – to frustrate our business activities and take over our company,” said the oil firm. It noted that the bank checked every stage of the importation process to satisfy itself that the importation was actually carried out.

In effect, the investigation that Mr Aig-Imoukhuede is currently carrying out on Capital Oil is an indirect investigation of his bank. “ Given the present circumstances, we strongly believe that it is most unethical and contrary to natural justice, equity and good conscience for Aig-Imoukhuede to continue to chair any committee charged with the responsibility of verifying the subsidy refund claims. “Because his bank is part and parcel of the whole transactions having financed them and, therefore, stands to benefit from any prolonged delay in the payment of the subsidy refunds to us.” But all these do not seem to impress Maduka.

According to him Aig-Imoukhuede’s character and integrity can never be faulted. He insists Ubah is just throwing so many things into the fray to confuse the public and divert attention from what the questions really are. He should tell us: where is the consignment for which he drew on the letter of credit? We have evidence to show that the consignment was shipped, we have the bill of lading, but there is no record to show that the products ever got to Nigeria. If they did, let him show us the documentation”, Maduka maintained.

The Coscharis boss said the claim that the bank processed and received the SDN for the missing four shipments is a different kettle of fish and does not prove that the shipment ever got in. He said that of the 10 Letters of Credit opened for Capital Oil, Ubah only partly delivered on the first six while the last four simply vanished. What that means is that, of the 377,400,033 litres of petrol paid for, only 197,093,412 litres was delivered. The rest which left their country of origin for Nigeria since September 2011 have yet to arrive. To this development, Maduka says: “we have comprehensive insurance for the consignment. If it sank with the ship or got burnt on the way, let him provide the details so we can file for claim with the insurance company.

It is even more understandable if the shipment came and they said the product was contaminated or substandard, or even got caught up in the exchange rate somersault and he, therefore, sold at a loss. I can understand all that. What I can’t understand is this idea of the entire consignment disappearing into thin air”. Producing document after document on the details of the transaction that allegedly saw him borrowing money for Capital Oil and how the entire transaction was properly structured from the onset, Maduka lamented: What this means is that I am losing N21 billion and somebody says I should keep quite! I will get my money, even if it is the last thing I do. I am ready to die doing just that”.