Our case with Chidi Duru over First Guarantee Pensions —PenCom

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By Victor Ahiuma-Young

NATIONAL Pension Commission, PenCoM, has dismissed allegations of non-compliance with the judgment of a Federal High Court, Abuja restraining the commission from interfering in the business of Nze Chidi Duru, and others and their consequent removal as directors of First Guarantee Pensions Limited, FGPL.

Nze Duru, a former Executive Vice Chairman of FGPL, alongside other directors allegedly resigned from the company in 2011 following alleged infractions.

Following the alleged infractions, PenCom appointed an Interim Management Committee, IMC, to run FGPL to safeguard both investors and contributors fund.

However, since then, both parties have been engulfed in a legal battle.

The situation climaxed when Nze Duru and others, were alleged to have invaded the FGPL headquarters at 68 Kudirat Abiola Way, Oregun, Lagos on January 11, and took away vital documents. The former Executive Vice Chairman was said to have gone to office to exercise ownership based on a court judgment.

Before the alleged invasion, the Director of Public Prosecution, DPP, of the Federation, Mohammed U. E, had on January 4, written to Director General of PenCom, drawing the commission’s attention to purported disobedience to the Federal High Court in Suit No. FHC\ABJ\709\2011 and alleged disregard of two letters from the office of the Attorney General of the Federation.

•Mrs Chinelo Anohu-Amazu

The letter titled “Malicious Prosecution: Appeal for restriction of our client’s right to judgment in suit no: FHC/ABJ/CS/709/2011 and charge no: ID/20396/2015″,said: “I am directed to write and refer you to the above petition submitted to the office of the Honourable Attoney-General of the federation and minister of justice by the law firm of A.A Umar & CO. wherein the petitioner complained of the failure of your Commission to comply with the judgment of the federal high court in suit no: FHC/ABJ/CS/709/2011 delivered by Honourable Justice D.U Okorowo on the 18th day of July 2012, restraining your commission from interfering in the business of the petitioners and consequent removal of directors.

“The attention of the Attorney-General of the Federation and Minister of Justice has also been drawn to the fact that the two letters referenced HAGF/PENCOM/VOL. 1 dated 17th August, 2011 and referenced as HAGF/PENCOM/2011/VOL.I dated 8th September, 2011 emanating from his office in relation to the above subject matters were also disregarded by your commission. I am to further draw your attention to a petition dated 28th November, 2016, and request you to brief the Hon. Attorney-General of the Federation and Minister of Justice on your level of compliance with the letters mentioned in paragraph 2 above.”

But in a response, PenCom through M.S. Muhammad, its Secretary/Legal Adviser, among others, declared that “the subject matter of the present letter relates to its regulatory intervention in FGPL, a licensed pension fund Administrator, PFA, on which the office of the Honourable Attorney General of the federation had severally been formally apprised of the development at every stage from the inception of the intervention on 12 August ,2011 to date .

The commission recalls its correspondence to the office of Attorney General vide letter ref. PenCom\DG/LS/11/365 of 17 August , 2011 informing him of the regulatory intervention and subsequent update letters dated 19 July , 2012 and 27 July, 2012 are also attached for ease of reference. The commission had also responded to inquiries on the subject from the Federal Ministry of Justice vide our letters of 15 February, 2013 and 4 August, 2016.Without prejudice to the previous correspondence however , the commission would like to comment on the issues raised in the instant letter.”

According to PenCom: “The Director of Public Prosecutions of the Federation, DPPF, may wish to note that contrary to the allegation made by the present petitioners, the commission had neither disobeyed any court orders nor frustrated the decision of the court, which was given in the civil suit, FAC/ABJ/709/2011.

An appeal against the judgment had been filed and an order of stay of execution issued by Hon. Justice G.O. Kolawole of the federal High Court Abuja, pending the appeal in CA/A/428/2012 . Indeed, the Honourable Attorney General had also filed a separate appeal challenging the same judgment of the Federal High Court in the case under reference through Mrs. Olabisi Soyebo SAN of Abdulahi Ibrahim and CO. The Appeals had been consolidated and adjourned to 5 April, 2017.

“The commission would like to note that the removed directors had made several petitions to different agencies and organs of government. Thus, following the petitioners of Edward Nathan Sonnenbergs, the South African law firm representing Novare Holdings, PTY, limited ,on the allegations that the interim Management committee (IMC) established by the commission had continued to act in breach of the order of court made in Suit No. FHC/ABJ/CS/709/2011, the immediate past Attorney General of the Federation, Mohammed Bello Adoke SAN, summoned an all parties meeting of 26 August, 2011.

“In the meeting of 26 August, 2011 held at the Hon. AGF’s Conference Room, it was clear that the action of the commission had been concluded prior to the service of the Court Order. In issuing the directives, the then Hon. AGF asserted as follows: A. That the commission was well within its powers to establish the IMC; B. That the affected Directors stood removed; C That the IMC should remain but should refrain from acts that might impinge the personal rights of Mr. Roper should the substantive application be in his favour; and d. That the findings of the Commission against the erstwhile Directors of FGPL were tainted with criminality. “

“The Commission was subsequently surprised to receive a letter ref. HAGF/PENCOM/2011/VOL.1 dated 8 September, 2011 signed by a Mr. P.C. Okorie purporting to act under the directive of the Honourable Attorney General alleging otherwise. We did not know the source of the purported directive of the Honourable Attorney General to have the Commission revert to the status as at 12 August, 2011 when the order of court in the matter was served on the Commission. We were even more alarmed that the Petitioners were obliged with an advance copy of the letter under reference prior to our receiving same.

“The Petitioners copiously circulated the letter to the clientele and service providers of FGPL e.g. their bankers, to cripple the operations of the PFA and put at serious jeopardy and risk the pension fund under their management, in a bid to discredit the regulatory stance of the Commission.

The commission noted that “surrounding circumstance of the letter signed by Mr. Okorie occasioned the direct intervention of the then Honourable Attorney General, Mohammed Adoke SAN, who wrote and directed the Economic & Financial Crimes Commission, EFFC, to investigate the criminal activities of the erstwhile directors. The outcome of this independent investigations was the arrest and subsequent arraignment of the erstwhile Vice Chairman of FGPL, Nze Duru by EFFC before the Lagos High Court.

“The removed directors applied to the Federal High Court, Lagos for a judicial review of their removal as directors and all other orders and actions connected therewith. They had also distributed the enrolled order granting leave to file application for judicial review and claimed same to be an order staying all questions of the IMC.

It is worthy to note that the enrolled order for leave was deliberately served on the Commission without the substantive or Originating process to frustrate the effort at filing an appropriate response within time. Subsequently, the application for judicial review was dismissed by Honourable Justice Okon Aban. Their appeal against the judgement was dismissed by the Court of Appeal and they have now filed an appeal to the Supreme Court.

“As a law abiding Government Institution, the Commission resisted the temptation to join issues with the petitioners on matters that are subject of pending litigation. In this regard, we feel obliged to bring to the notice of the DPP the continued mischief and unrelenting efforts of Nze Chidi Duru to subvert the regulatory functions of the Commission and also malign its management.

This posture was demonstrated in several past media campaigns depicted in the publications of The Leadership newspaper of 12 July, 2016 and the Nation newspaper of 12 and 13 July, 2016. The foregoing clearly indicate that the petitioners are merely instigating a continued campaign of calumny against the Commission by falsely alleging that it failed to comply with judgement of a court and disregarded the directives of the Attorney General of the Federation.

“It is a fact that the judgement of Justice Okorowo had been stayed and is a subject matter of a pending appeal (CA/A/428/2012) of which the Hon. Attorney General of the Federation is a party. The Appeal has been adjourned till 5th April 2017. The adjournment was informed by the inordinate conduct of the Respondent’s Counsel at the last hearing date of 28 June, 2016. The Commission therefore urges the DPPF and indeed the office of the Honourable Attorney General of the Federation to discountenance the petition by A. A. Umar & Co.”

The commission added that “in the light of the foregoing therefore, we would like to submit that based on the correct facts and sequence of events, the Commission was not in contempt of any order of court. Furthermore, the Commission has never disregarded any directive from the Hon. Attorney General of the Federation.

It is important to note the various cases relating to the dispute in FGPL which are still pending in various courts, the appeals and the order of stay of execution of Hon. Justice Okorowo’s judgement. The Commission’s regulatory intervention in FGPL was solely guided by its statutory mandate of protecting pension assets and ensuring that the assets are managed by only fit and proper persons.”

It will be recalled that PenCom, in a response to the petition by Hon George Ozodinobi against the regulatory intervention in FGPL in June 2016, submitted to the House of Representatives Committee on Public Petition, gave details of its investigations leading to its eventual intervention.

The commission recalled among others that, “under the leadership of pioneer Director General, DG, of the commission, Aihaji M.K. Ahmad, PenCom embarked on various routine and special examinations on FGPL spanning the years 2007, 2008, 2009, 2010 and 2011, all of which revealed persistent infractions and unsound corporate governance practices perpetrated by Nze Chidi Duru who was then Vice Chairman of the Board of FGPL. As the Chairman of ‘Board Executive Committee’, Nze Duru diverted part of equity contribution of Novare Holdings (Pty) for purchase of a personal property in Lagos. The purchase was handled by the PFA’s outsourced Company Secretaries. Spurious and additional entitlements were paid to Nze Chidi Duru.

There was payment of unapproved consultancy service charges to Novare Holdings whose representatives were also paid as employees of the PFA with benefits including 10 vacations to South Africa each year paid by the PFA. Pre-incorporation expenses in excess of N40mmillion claimed by Nze Duru and additional ‘sweat equities’ for his presumed efforts was converted as shares in the name of his companies, including BP Outsourcing Limited and Grand Towers Plc and without approvals.

The above findings had elicited different regulatory directives which were disregarded. The regulatory directive on the contract awards for software development and consultancy services were ignored.

The transactions were shrouded in secrecy and double invoiced payments were made for same. There were high volumes of Board related expenses in favour of Nze Chidi Duru, including payment of N10m executive allowances to him alone, payment of his hotel bills, security bills and refunds for ‘marketing expenses’. Fixed assets, including two 60KVA generating sets were purchased by the PFA for Nze Duru’s private business premises and private residence. There were series of contracts awarded without Board approvals to his wife and to his companies, including Grand Towers Plc.

Indeed the Special Examination carried out in March 2011, indicted Nze Chidi Duru, Chief Orlando O. Ojo, the then Chairman of Board and Mr. Derrick Roper, representing the interest of Novare Holdings (Pty) Ltd of South Africa. Nze Duru effected instructions on staff and service providers of the PFA through these allies and terminated the employment of any employee who queried or did not effect instructions. Specifically, the PFA had four (4) Managing Directors within a six-year time span.

The PFA retained management staff whose appointments had been declined by PenCom on grounds of non-qualifications, including the direct siblings of Nze Duru and representatives of the South African investors. In view of the grave implications of the above infractions and in order to protect the pension assets (which at that time was worth N42.2 billion being managed by the PFA on behalf of over 163,617 Retirement Savings Account (RSA) holders), PenCom summoned an all shareholders meeting where the infractions were revealed to the shock and annoyance of even the present Petitioner.

After the stakeholders’ meeting in May, 2011, Nze Duru pleaded with the Commission for soft landing and it was agreed he would resign his position with immediate effect. Consequently, he tendered his resignation Shortly after, Nze Duru reneged and as typical, argued that the resignation did not hold water as he had no intention resigning and sued the Commission.

The above formed the basis of the regulatory actions on the PFA and the three indicted directors were removed from the Board of the PFA pursuant to the provision of Section 88(2) of the PRA 2004. Furthermore, pursuant to Sections 20(i) and 21(j) of the PRA 2004 and Framework for the Resolution of Failing Operators, PenCom set-up an Interim Management Committee (IMC) to superintend over the affairs of the PFA until the shareholders convene an Emergency General Meeting (EGM) and re-constitute the PFA’s Board.

“Nze Chidi Duru sponsored the institution of legal actions for judicial review of their removal at the Federal High Court, Lagos through Chief Ojo. The first suit (FHC/L/CS/1035/2011) being in their personal names and the second (FHC/L/CS/1036/2011) in the name of FGPL. Both suits were struck out at the lower court and at the Court of Appeal.

Nze Duru instigated another suit to be filed in the name of Mr. Derrick Roper at the Federal High Court Abuja (FHC/ABJ/CS/709/2011) for the enforcement of his fundamental right. As at today, several cases instituted following the intervention in FGPL are still pending before law courts. The shareholders of FGPL have not been able to reconstitute the PFA’s Board. There appears to be a deadlock regarding the resolution of the disputes among the shareholders and between a category of the shareholders and the Commission.”

According to it, “the Commission is surprised at the sudden turnaround by the present Petitioner who had stood firm against the conduct of Nze Chidi Duru in the affairs of FGPL to now join Nze Duru to thwart efforts that would aid resolution of the impasse in FGPL. We recall that the Petitioner had endorsed the letter of 13 June, 2011 rejecting the explanation of the Board of FGPL to the noted infractions preceding the intervention. He had also sponsored the suit (FHC/ABJ/CS/784/2011) to compel PenCom to enforce the recommendations of the report.

The Petitioner was the one who drew the attention of PenCom to the forgery of their signatures by Nze Duru on the resolution purportedly authorizing Nze Duru to execute the ‘Shareholders Agreement’ with Novare for and on behalf of FGPL The Petitioner had also endorsed the petition to the Minister of Interior dated 15 August, 2011 challenging Nze Duru’s use of the PFA’s Expatriate Quota for employees of his private companies. The petitioner had remained aware of all legal challenges, constraints and issues on the intervention in FGPL.

“The petition currently before the Honourable House Committee, which was jointly endorsed by Hon. George Ozodinobi (a shareholder of FGPL) and one Chijioke Chuku, is one of the very many instances of conflict situations that had engulfed FGPL since the regulatory intervention in the PFA.

The present petition has arisen only for the refusal of PenCom to approve the appointment of Hon. Ozodinobi and others, including employees of Nze Chidi Duru’s Grand Towers Plc,as Chairman and directors respectively, of the Board of FGPL. The intervention has caused the different stakeholders, at every time instigated by Nze Chidi Duru, to drag PenCom before different fora only for representations to reveal the circumstances that PenCom had had to contend.

“It may interest the Honourable members of the Committee to note that Nze Duru had instigated petitions against PenCom to the office of the Secretary to the Government of the Federation, the office of the Attorney General of the Federation, the Federal Ministry of Trade and now before the distinguished House of Representatives. These are in addition to constant media war and campaign of calumny.”

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