FACTS: Nigeria Airways, The Big Scam?

While the Federal Government has concluded plans to spend N75 billion ($500 million) to procure 30 aircraft for airlines, none of those indicted, by a government White Paper ten years ago, for the fraud and misappropriations that led to the collapse of the Nigeria Airways has been prosecuted or made to return the money they stole.

A PREMIUM TIMES Investigation revealed that some of those indicted are still active players in the aviation industry and may directly benefit from the government’s intervention. Nobody has been prosecuted or convicted for his/ her role in the scam.

In 2002, outraged that the national carrier that had 32 airworthy aircraft in the early 1980s has only two functional airplanes, former President Olusegun Obasanjo set up a commission of inquiry to investigate the management of the Nigerian Airways. The commission was mandated, amongst other things, to “examine all books of account and records and determine whether there has been compliance with appropriate regulations.”

After a year’s work, the commission submitted a four-volume report that revealed mind-boggling fraud, misappropriations and wanton recklessness running into billions of naira involving several officials of the airline, administrators, travel agencies, financial institutions local and foreign companies, as well as one prominent development organisation.

On December 11, 2002, the Federal Executive Council, FEC, the country’s highest decision making body, met and approved a draft White Paper on the commission’s report and directed the Ministry of Justice and the police to prosecute and recover the stolen funds. It also directed the office of Secretary to the government to gazette the recommendations of the White Paper.

Nobody remembers what happened afterwards, but neither did the police, Justice Ministry or the Secretary to the Government of the Federation follow through the FEC’s directives.

If they know what happened, officials of the President Goodluck Jonathan administration are unwilling to tell Nigerians. Media aide to the president, Reuben Abati, did not respond to our questions about the status of the White Paper. Ambrose Momoh, the media aide to the Attorney General and Minister of Justice, could also not get his boss to respond.

Mr. Momoh did not respond to our enquiries several weeks after they were sent to him.

Just before he took ill and was taken to Saudi Arabia for treatment, the late President, Umaru Yar’Adua, had vowed, to those close to his government, to prosecute those indicted. That was the last that was heard of the report.

An orgy of fraud

Findings by the Justice Nwazota led Commission of Inquiry revealed that Nigerian Airways was run like a repulsive orgy of corruption.

In total disregard for all decency, huge sum of monies were stolen and misappropriated by the airline officials. Administrators arbitrarily signed shady contracts with agencies and companies without recourse to regulations, funds were dubiously deposited and lost in moribund financial institutions; and airworthy airplanes were sold as junks and the money embezzled. Also, huge loans were taken on behalf of the airways and pocketed by private individuals.

The report painted a bacchanal of fraud where every administration was jostling to out-steal the one before it.

Between 1997 and 1999 “every project and contract was conceived with fraudulent intent,” the report noted. The Managing Director of the airline during the period, Jani Ibrahim, was described as “fraudulent and highhanded.” It revealed that Mr. Ibrahim treated the airline’s account like his personal wallet and summarily sacked those “he thought were threats to his fraudulent practices.”

Between 1997 and 1999, Mr. Ibrahim spent $4,052,234.00 (N607.84 million) rental due to the airways without recourse to lay down regulations.

Also, he single-handedly paid $1.78 million (N267.8 million) without guarantee to a travel agency, Alpine Aviation, for the 1999 Hajj operation. Only $560, 000 (N84 million) was recovered. The balance of $1.22 million (N183.75 million) was never recovered.

From 1997 to 1999, Mr. Ibrahim appointed a third party company to collect revenue on behalf of Nigerian Airways even when the airline had the capacity to carry out the job. He subsequently paid a commission and handling charge of $928,895 (N139 million) to Hak Air, the agency he recruited for the purpose.

Mr. Ibrahim also presided over the overpayment of $1.45 million (N222 million) to Hak Air for the overhauling of two aircraft – DC10-30 and B737, the report stated.

Mr. Ibrahim also spent N607.84 million ($4,052,234.50) being rent due to the airline “without regard to laid down regulation.”

During the first C-Check of an Airbus in Nigeria by Revilo, Mr. Ibrahim made an over-payment of N92.4 million ($616,052.26). He also “single-handedly signed and disbursed N156 million ($1,039,439.00) without the signature of the airline’s financial director as regulation required.”

Between 1996 and 2001, he also unilaterally allotted 24 plots of land belonging to the airline in Ayobo, a suburb of Lagos to non-staff members.

In keeping faith with his authoritarian approach to leadership, the committee found that Mr. Ibrahim went into a Wet Lease agreement with Al-Mahfooz that was to last for a year, but the venture collapsed because Mr. Ibrahim excluded the airline’s technical department. The failure of the agreement cost the airline N247.28 million.

Mr. Ibrahim could not be reached for comment as his whereabouts remain unknown.

Banned from holding public office

Perhaps the biggest damage done to the Nigerian Airways by an individual was done by its former Managing Director of the company, Mohammed Joji.

Mr. Joji, a retired Air Force Captain and the current Secretary General of Airline Operators of Nigeria, AON, was so unabashedly corrupt as stated in the report, that the FEC banned him from holding public office in Nigeria.

The White Paper revealed that in March 1993, Mr. Joji, who is the owner of Sky Power Express Airways, “unlawfully approved” N2 million to one Grace Hembah as imprest account.

In the same year, Mr. Joji “collected and spent” N1.8 billion ($12 million) royalty from Swissair without approval.

Also in 1993, Mr. Joji claimed that he paid N1.62 billion ($10.8 million) to Sabena Airline but it was later discovered that he only paid N150 million ($1million), the panel discovered.

In 1992, Mr. Joji also paid NICON Insurance Plc, N361.7 million ($2,458,064) less premium due. This fraud was even made worse by the fact that N 33.5 million ($2,230,357) being discount on premium that accrued to the airline had vanished without a trace, the white paper stated.

It was also revealed that he would willingly choose foreign consultants for jobs that the airline staff could handle. The committee found “he would hire them in with all expenses paid.”

In 1993, Mr. Joji outsourced the maintenance of a Boeing 737 aircraft to consultants from Brazil and paid them fully even after staff of the airline has completed 75 per cent of the maintenance. The airline lost N176.56 million ($3,531,358.50) in the process.

In a telephone interview with PREMIUM TIMES, Mr. Joji denied any wrongdoing. He said the White Paper was a product of a “witch-hunt” orchestrated against him by former Aviation Ministers, Babalola Borishade and Kema Chikwe.

“There were several panels. Nwazota was just a consultant. Is that what you call a panel? They didn’t do a proper job,” he claimed.

“Do your research. The question you have to ask is who wrote the white paper? Was it gazetted? Was anyone charged?”

Mr. Joji also uttered a subtle threat of litigation to PREMIUM TIMES. He wondered why we were interested in the story 10 years after:

“At that time, no newspaper wrote about it. The White Paper was published 10 years ago, why are you just writing about it now,” he queried.

When told we recently started publishing, he replied:

“You are starting on a bad note. They will charge you to court. The White Paper is not gazette. You’re playing a dangerous game. Ten years ago something was written and you just came over night and want to write something about it.”

“It just a wishy-washy thing by Mr. Borishade and Kema Chikwe. It wasn’t gazetted and I wasn’t charged,” he said.

Source: Premium Times

UPDATE: Nigeria Airways, The Big Scam Part 2

A senior CPC official is among those indicted for ruining Nigeria Airways.

The pillaging and misappropriation that characterised the Nigerian Airways was not limited to the alleged corruption of its former Managing Directors- Jani Ibrahim and Mohammed Joji; several top management staff of the company between 1985 and 1999 in one way or the other either embezzled, misappropriated or mismanaged its resources, Premium Times can authoritatively reveal.

In 1992, Nigerian Airways Director of Finance, Afam Nwagboso, with the approval of Mr. Joji, disregarded all vibrant banks and used a moribund bank (Continental Merchant Bank) as the collecting bank for all cash taking of the airline. Soon after, the bank capitulated and the airline lost N40 million already collected by the bank.

In 1993, the Area Marketing Manager of the airline, Ibrahim Bala, stole N354 million ($2,359,546.95) collected from the Jeddah station amount for excess baggage and luggage allowance.

Sometimes between January 1984 and December 1985, during the time of Bernard Banfa, a retired Air Commodore, as the managing director of the airways, the Minister of Aviation, Patrick Konshoni, a retired Air Admiral, sold an air worthy A310 aircraft for paltry sums against expert advice. The White Paper directed that Mr. Koshoni and Mr. Banfa be compelled to pay N65.29 billion ($435.25 million) being the cost of an A310 aircraft.

Mr. Konshoni could not be reached for comments.

We could not reach Mr. Banfa, now a senior member of the Congress for Progressive Change (CPC), for comments as well; but Rotimi Fasakin, spokesperson for the party, rose to his defence:

“The only institution that can find someone guilty of any crime is a competent court of law,” he said.

“Was Mr. Banfa convicted of any crime? There have been various White Papers and nothing has come out of them. You should ask the government why it did not prosecute those indicted. Mr. Banfa served this country meritoriously, to the best of my knowledge.”

Between 1988 and 1990 when Olu Bajowa was the boss of the airline, CES travels was “given the exclusive right to sell all tickets for NAL (Nigerian Airways Limited) in the UK and US even to the exclusion of NAL itself,” the White Paper noted. During this period, CES Travels did not remit N945 million ($6.3 million) to the airline. The report recommended that Alabo Tonye Graham-Douglas, a two-time federal minister, Olu Bajowa, M. Abdulsalam, T. Mgbhor and U.S.H Maigida be made to pay the money to the airline’s account.

Mr. Bajowa also deposited the N652.5 million ($4.35 million) for the purchase of two aircraft (MD-11 and ATR-42). The aircraft were not delivered and the deposit was never accounted for.

Mr. Bajowa did not respond to our request to comment emailed to him from his personal website.

A certain Mohammed Kari and other officials of the airways also pulled an insurance scam with the aid of some NICON officials and N21 billion ($13,935,956.20) was deposited in a phony company- Alexander Services Limited in the Channel Islands, the report stated.

From 1995 to 1997, a director, All-Well Brown,” kept some crew of the airline in Miami for five months for no reasonable cause,” the commission discovered. Their stay cost the airline N18.3 million ($122,000.00).

According to the White Paper, in 1994 Alexandra Howden, a London based insurance company with the aid of some officials of the airline, collected N367.5 million ($2.45 million) without rendering any service to the company.

Information on U.K. company directory, Company Check, shows that the company is dissolved. It filed its last account in 2002.

Between 1991 and 1996, A. Olafisoye, the Managing Director of Fidelity Bond limited, and other senior management officials stole millions of dollar from the airline. The report described Mr. Olafisoye as “all-in-all [who] manipulated the operators of the company at will.” The report said his involvement with the company “led to the looting of funds and other fraudulent activities that brought the [airline] on its kneels.”

Fidelty Bond has vacated its only known address at Elephant House, Alausa, Ikeja. Security men at the address said they last opened for business two years ago; their office has remained closed since then.

Other junior staff too

The corruption of top-ranked officials of the airline blinded them to the side thievery that was being perpetrated by non-management staff, contractors and travel agencies while property belonging to the airline were allowed to be occupied under uncertain terms or left to rot away.

The commission discovered that they indulged in unrestrained stealing and fraudulent conversion of property belonging to the airline.

In 1995, Mrs. Abimbola, C.O Awosika, Adetoye A.B. and K. Omoregbe all assigned to the TBS office of the airways collectively stole N27 million, the report states. Around the same time, staff and travel agencies in the Jos joined the free-for-all: D.A Adebiyi cornered (N86,179.00), Deen Travels (N629,834,00), Lagustr Travels (N214,854.00), Assab Travels (N8,493,796.00), H&B travels (N6,885,046.00), All Staff Travels (N3,027,354.00)and Classique Travels (N2,421,105.00).

Also in 1995, the Head of Insurance and Claims of the airline, A.S. Amalu, corroborated with other staff to steal N3.75 million ($250,000.00), the White Paper stated.

The next year, staff at the Kinshasha and Mgbengele stations in the Democratic Repulblic of Congo stole N123, 280.00. In Jos Dilli K.M. stole N3,258,284.00, in Ilorin Olobayo T.D stole N188,768.00, in Abeokuta Adeluola V.I. embezzled N182, 700.00, in Sokoto S.L. Atitebi stole N574,969.00, in Onitsha J. Osukponu moved N723,469.00, in Benin A.A Echu stole N1,115,269.00, the report showed. Those stationed at Lagos did not miss out in the thievery: Mr. Aro grabbed £203,484.00 (N50.87 million), Mr. Fakeye stole $108,429.00 (N16.26 million) Cosvir Travels didn’t remit N8 million, All Sky Travels N234,546.00, Octilon Travels N645,515.00 QCA Travel N124,548.00, Qualitex Travels N582,433.00, Nokoy Travels N235,254.00, FLT Contract Travels N1,337,711.00, Aeroswift Travels N1,365,281.00, BOFAM Travels N232,322.00 and Onent Travel Agency N573,035.00.

Efforts by PREMIUM TIMES to locate all the travel agencies involved were futile as many of them have since become extinct.

The National Association of Nigeria Travel Agencies at its Fadeyi, Lagos office asked for a list of all the indicted travel agencies. After receiving the list, the official at the agency identified Classique Travels and Qualitex Travels as its members, saying others no longer exist.

The official requested that PREMIUM TIMES route its questions to these two agencies through the association. Several weeks after the questions were sent, both the agencies and the association are yet to respond.

Source: Premium Times