…Vice Chair denies allegations, says he nurtured firm from infancy
From Isaac Anumihe, Abuja
National Pensions Commission (PenCom) yesterday stepped into the controversy that has since wrestled the management of First Guarantee Pension Limited (FGPL) to the ground, indicting the Vice President of the Pension Fund Administration (PFA), Mr. Nze Chidi Duru, of financial recklessness.
Duru had earlier denied the allegation, saying he nurtured FGPL to good financial health until it paid dividends to shareholders in 2011 for which he got commendation from PenCom.
In a statement entitled, “Executive Summary of Facts: In Re Nze Chidi Duru and FGPL,” the commission said the target examination conducted on the PFA revealed that between August 2008 and December 2010, a proposed investor from South Africa, Novare Holdings (Proprietary) Limited, had transferred $1.64 million in 10 tranches as its equity contributions to the PFA.
It said that the 8th tranche of $107,706.39 (N16.12 million) was diverted to BP Outsourcing Services Limited and GT Retail Limited, a property development company owned by the Vice Chairman of the PFA.
The commission also stated that Novare increased its initial share capital without registering same at the Corporate Affairs Commission (CAC) and without updating individual shareholding in its register, adding that Mr. Derrick Roper, a representative of Novare Holdings, had been attending board meetings without prior approval from the commission.
“Top management staff whose appointments were not approved continued with their position. The board imposed on the PFA an undocumented consulting contract of $168,000 with Novare Limited with same forming its proposed acquired 24.35 per cent shares. The three non-executive directors also unilaterally constituted an “Executive Committee”, which undertook day to day running of the business of the PFA,” the statement said.
The statement revealed by the Legal Department of PenCom further noted that the directors of the PFA, including Duru, continued to engage in unacceptable business arrangements including constitution of another board by Nze Duru and Chief O. O. Ojo, maintaining that most contracts were unilaterally approved by Duru.
Specifically, the statement said Duru approved a media campaign contract of N14.07 million without formal contract documentation. He also approved a N4.07 million renovation works contract at the PFA’s head office to his company, Grand Towers Limited.
“There were incidences of approvals made by Duru for jumbo allowances for himself as a Director, a privilege not extended to other Directors and some of which he took in advance. He collects the sum of N5 million annually as board executive allowance. Records revealed that he collected N10 million for two years enbloc when the official annual entitlement for directors was N2.6 million.
“In 2010, the sum of N10.7 million purported to be pre-incorporation expenses incurred by his company was rejected by the commission but same was refunded to his company in two tranches. Approval for the refund was obtained five months after the refund was made. It was observed that the purported refunded amount was deposited with the PFA for purchase of shares by Duru’s two companies, BP Outsourcing Limited and Grand Towers.
“The instruction to divert the equity contribution of $107,706.39 (N16.12 million) was at the instance of Duru and was corroborated by Mr. Derrick Roper who represented the South African investors in the PFA. The beneficiary of the diverted funds were for the purchase of land from the Lagos State government in the name of GT Retail Ltd and another to BP Outsourcing Ltd. The cheques for the purchase of the land were collected by Legal Partnership Consult who had been engaged by the Directors of the PFA as the Company Secretaries,” the commission said.
Earlier, Duru had petitioned President Muhammadu Buhari, alleging persecution by some individuals who suggested in a report that he is on collision course with the Economic and Financial Crimes Commission (EFCC).
Reacting to a story syndicated in major newspapers by some persons, he also denied the allegation that he defrauded FGPL, a company he founded and nurtured to good financial health until it paid its first dividend to shareholders in 2011 and got commendation letter from the National Pensions Commission (PenCom) as the most improved PFA in 2010.
The report syndicated to some newspapers by “persons of interest” reads: “In order to protect over N100 billion worth of pension assets managed by First Guarantee Pension Limited (FGPL), the Economic and Financial Crimes Commission (EFCC) has invited a former member of the House of Representatives, Chidi Duru, one Chief O. O. Ojo, and a South African, Mr. Derrick Roper, representing Novare Holding Limited, for diverting millions of naira of FGPL, a licensed pension administrator.”
Duru was also accused of diverting N16 million being part of the equity contribution of Novare Holding, a South African firm, to another business without following due process and without board approval, collecting N20.5 million as “executive allowance” without board approval and diverting the company’s assets worth millions of naira for his personal use.
In a statement released to newsmen, Duru accused the “persons of interest” of circulating and sponsoring falsehood, which had been quashed by Justice Donatus Okorowo of the Federal High Court, Abuja, on August 11, 2011 and June 18, 2012, saying the move was part of efforts to hide some issues.
On the allegation that he shortchanged some of shareholders by withholding money given to him to buy the company’s shares, he said: “Before the First Guarantee Pension Limited, we operated under three names. Initially, we were First Provident Trust Limited but that name was rejected by PenCom. We now changed the name to First Pension, which again was rejected. Then we changed the name to First Guarantee Pension, which was now approved.
“Each and every investor, shareholder in First Guarantee Pension, issued his cheque or instrument to either of these three names. At first, it was First Provident Trust, then First Pension and finally First Guarantee Pension. None of these investors and shareholders invested in any other platform other than these three. It was this instrument that was now used as proof of evidence to National Pension Commission of the investment that was done by every shareholder.
“It could not have happened that any shareholder or investor in First Guarantee Pension would have either given money to me personally, or to any other person to invest in FGPL because the guidelines enunciated by PenCom is that every investment must be made in the name of the proposed, on the basis of which they now issued what they called Approval In Principle (AIP) to a PFA. After the AIP, we were now given a final license when we presented the final instrument that each shareholder invested.
“When other PFAs were raising N150 million, FGPL in the first tranche raised N235 million and then raised another N500 million and later to well over N800 million. All those investments were done in either of the three names I mentioned to you earlier.”
The persons of interest claimed to have indicted Duru and his collaborators of alleged forgery of some shareholders signatures on a document referred to as the “Shareholders Resolution,” which purportedly mandated him to negotiate with Novare Holding on behalf of other shareholders during the acquisition of FGPL’s shares by Novare Holding.
According to the story, some of the shareholders who alleged that their signatures were forged included former Speaker of House of Representatives, Ghali Umar Na-Abba; former Deputy Speaker, Austin Okpara; Senator Annie Okonkwo and Kashim Ibrahim Imam.
In his explanations, Duru said: “One of the charges they brought before the magistrate’s court in Abuja was the forgery of the signature of Alhaji Kashim Ibrahim Imam in the shareholders’ agreement to admit the investment of our partners from South Africa into FGPL. For me, that was surprising because, first, I am not the management, second, I have no role to play in it.
“However, I recall that on November 13, 2008 when the then Managing Director presented to the board indicating that the shareholders’ agreement permitting the investment of Novare into First Guarantee Pension had been signed by the shareholders (there are two ways to obtain the agreement of shareholders, either by all the shareholders signing by what we call round ribbon or at a general meeting of the shareholders) but this process was done through round ribbon.
“The Chairman in his considered wisdom at that meeting said that since an AGM of the company was coming up on January 19, 2009, he would prefer that the question of investment of Novare be discussed at the AGM. He said that why he agreed with the Managing Director and Company Secretary that Novare had met every condition necessary for a resolution of the shareholders to admit Novare into FGPL he pointed out that we had nothing to lose if we waited for two months to take the matter to a general meeting of the shareholders. And that was carried as a resolution of the board.
“In the January 19, 2009 shareholders meeting, the Chairman made a profound statement that he had been advised that with the shareholders’ agreement as signed, we had met the requirement to admit Novare but that he would like to keep the document aside because he wanted the shareholders to understand what they had signed, which would dilute their shareholding because when Novare invests into FGPL, if you own 18 per cent, for instance, it will now come down to 15 per cent.
“The matter was discussed extensively. In fact, if we spent 10 minutes at that AGM, eight minutes were devoted to the issue of Novare’s investment. But at the end of the day, unanimously, without any dissenting vote, Novare was admitted to invest in First Guarantee Pension. It was the resolution of that meeting that was filed with the CAC admitting the investment of Novare into FGPL.
So, this was a resolution of the shareholders at the general meeting. If anybody knew that his signature was forged or he didn’t agree with it, he could have raised it at the AGM.”
However, Duru said in the statement that court had since quashed the charge.
Duru also accused the persons of interest of bad faith, saying that Justice D. U. Okorowo of the Abuja High Court had dismissed the same charges on June 18, 2012 and upbraided PenCom for acting above the law and ordering that the interim management set up by the regulatory agency be removed.
Duru said he couldn’t have been on the run when he dutifully attends the court personally to answer to the fresh charges preferred against him in a Lagos High Court by the EFCC, describing the arrest of his sister, Mrs. Chinyere Ekweonu, who stood surety for him in 2012, as an act of impunity.
Duru accused PenCom and Kashim Imam of being the ones guilty of forgery.
“Following Justice Okorowo’s ex-parte order on August 11, 2011, insisting that PenCom should reverse the steps it has taken and allow the Directors to take back and run their business, in December 2011, a curious thing happened in the Corporate Affairs Commission, which was that a filing that didn’t have the directors’ approval nor the shareholders’ resolution was filed in CAC, restructuring the shareholding structure of First Guarantee Pension where the shares of our foreign partners, Novare, were removed as investors in FGPL and treated now as deposit for shares. And my shares were reduced by 50 per cent from N248 million to under N122 million. There was no shareholders’ resolution; there was no shareholders’ meeting, and there was no directors’ meeting where this was agreed upon.
“Also, Kashim Imam was purportedly elected as the Chairman of FGPL, even when there is an order of the court by Justice Okeke against that,” he said.
Duru said he had written a petition to President Muhammadu Buhari complaining of persecution.
“My and our appeal is that if it is found that there has been an infraction on our part, then let justice be done. But if it is found that we have not done anything wrong and some other people have misused their power and influence, let justice also be done.
“But more important is that there must be an immediate order that those who are managing the business of FGPL convene a shareholders’ meeting. It cannot happen that a business such as FGPL has not had a meeting in five years. It cannot happen that a business such as FGPL has not filed its annual returns and accounts with the CAC in five years and the CAC is keeping quiet. It cannot happen that FGPL has not paid dividends to the shareholders in five years and it cannot also happen that a business such as ours has not been paying tax to the regulatory authorities.
“Now that the states and Federal Government are broke and are looking for money to run the affairs of the country, it is the duty of all responsible corporate entities to pay their taxes. This is part of the corporate governance compliance we are urging the regulator who is managing the business to do immediately,” he noted.