By Adewale Sanyaolu with agency reports
Investigators from the US Department of Justice and the Securities and Exchange Commission (SEC) are investigating China Petroleum and Chemical Corporation (Sinopec) over a $100 million bribe allegedly paid to some Nigerian officials.
The deal, according to Bloomberg, was aimed at resolving a $4 billion business dispute between the company’s Addax Petroleum unit in Geneva and the Nigerian government.
US authorities are, however, interested in investigating the matter because an unidentified Nigerian lawyer who is a member of the California Bar Association was alleged to have been used to pay some of the alleged bribes.
The lawyer in question was reportedly hired to advise Addax executives on the terms of the settlement with the Nigerian government.
The dispute is said to be related to drilling and other capital costs, tax breaks and a division of royalties between Addax and the Nigerian National Petroleum Corporation (NNPC).
In 2009, Sinopec bought Addax for about $7.8 billion, which was dubbed as one of its biggest acquisitions in a bid to build a corporate presence in Geneva and to also expand its oil production in Africa.
However, the Nigerian government was said to have decided that the side letter agreement, which granted it tax breaks and reimbursements for the capital cost should no longer apply from 2014 during which the government also demanded that Addax repay about $3 billion of past benefits.
Addax, however, filed a lawsuit against the government to protest its decision, claiming the NNPC had taken more than its share of crude allotments – a practice known as ‘overlifting’, and subsequently seeking for the reimbursement of about $1 billion.
The bribery allegations followed the disagreement between the two parties after Deloitte, an auditing firm, resigned as Addax’s auditor, following claims that there were no satisfactory explanations given for the $80 million Addax paid to an engineering company for Nigerian construction projects in 2015.
But shortly after the said payment was made on May 25, 2015, Addax and the Nigerian government reached a settlement which was approved by a Nigerian high court.
“The agreement validated the original terms of the side letter, effectively nullifying Nigeria’s demand that Addax repay $3 billion,” a source said.
But on the assumption of office, President Muhammadu Buhari reportedly left the original terms of the letter intact having also planned to revoke its terms effective from January 1, 2016, which would deny Addax at least $1 billion in future benefits and end reimbursement claims.
Deloitte, on the other hand, had also revealed details of additional payments exceeding $20 million made by Addax to legal advisers in Nigeria beginning from 2015.
Deloitte said it had received a number of whistle-blowing allegations from within and outside Addax, some of which alleged that such payments have been made to bribe foreign government officials and that certain amounts have been embezzled by certain members of management within Addax Petroleum Group.”
Following Deloitte’s allegations, Yves Bertossa, a Geneva prosecutor, then began a probe into the matter which led to series of raids and arrests of Addax’s offices and officials respectively.
The case was, however, closed four months later, with neither the company nor its executives being charged following Bertossa’s claims that no criminal intent could be established.