Our investigations reveal that the total sum expended on Maintenance ofStaff Quarters in that year prior to reclassification was N 135, 067,773.39(One Hundred and Thirty Five Million, Sixty Seven Thousand, Seven
Hundred and Seventy Three Naira, Thirty Nine Kobo), the sum of N64,285,898.60 (Sixty Four Million, Two Hundred and Eighty Five Thousand,Eight Hundred and Ninety Eight Naira, Sixty Kobo) was reclassified underdifferent expense heads. For instance, the sum of N45, 250,000.00 (FortyFive Million, Two Hundred and Fifty Thousand Naira) was reclassified towebsite hosting expenses ledger.We have conducted a detailed review of major expense items under the MSQNigeria Stock Exchange Status Update/Report9 September 2010 KPMG + Aluko Oyebode & Co.
www.proshareng.com 16ledger for the years 2008 to 2009. We have also conducted an oral interviewwith an officer of the NSE in respect of this ledger account. Our inquiries to date reveal the following:
(i) Contrary to the title of this ledger, expenses recorded in this ledger relate to private residences of the DG, ADG and senior management;
(ii) Sometimes, the expenses (especially in respect of diesel supplies) were for houses of persons who were not officers of the NSE. Several supplies were made to houses of former staff of the NSE.
(iii) The sums expended and recorded in this ledger were not deducted from
the allowances due to the DG or ADG or other staff members on behalf of whom the expenses were incurred.
(iv) The alleged justification for these purchases is that in the DG’s remuneration package, utility is “FREE”.
It is however questionable whether the expenses incurred can be classified as Utility. Our review of the actual expense vouchers reveals the following in summary:
(i) In the month of January 2008, diesel expense under this expense classification was in the sum N 10, 433,000.00 (Ten Million Four hundred and Thirty Three Thousand Naira). During one of the interviews conducted, we were informed that the diesel expenses in respect of the NSE building are not recorded in this ledger and that the ledger only contains supplies made to private residences. There is nothing in the NSE records so far reviewed that indicate the actual residences to which the supplies were made. We have requested to speak with the person contracted by the NSE to supply diesel to these “quarters”; Nigeria Stock Exchange Status Update/Report 29 September 2010 KPMG + Aluko Oyebode & Co. www.proshareng.com 17
(ii) In the same month, the sum of N2, 200,000.00 (Two Million Two Hundred Thousand Naira) was spent_ 01.1 purchasing a glass cabinet for the quarters. We sighted an invoice in respect of this expenditure indicating that the kitchen cabinet purchased was for the DG’s house. A treadmill was bought at the cost of N347, 500.00 (Three Hundred and Forty Seven Thousand Five Hundred Naira) from Mega Plaza and we sighted the invoice to this effect and same was authorised by the DG.
(iii) In February 2008 the ledger reveals that personal items such as duvets, bathroom accessories were purchased on this account and in March 2008 the sums of N3, 300,000 (Three Million, Three Hundred Thousand Naira) and N2, 513,140 (Two Million Five Hundred and Thirteen Thousand One Hundred and Forty Naira) were expended on the purchase of furniture from Heroes Furniture and Leatherworld respectively. We were furnished with the invoices for the expenditure but we have not been able to confirm who the furniture was purchased for or if they were delivered.
(iv) In April 2008, an additional sum of N25, 000,000.00 (Twenty Five Million Naira) was spent on furniture for the “quarters”. There are no documents to support this expense. A Generator was also purchased for the sum of N5,040,000.00 (Five Million and Forty Thousand Naira). We sighted an invoice issued by the Company that supplied the generator (“Etco”). The invoice reveals that the generator was purchased for the residence of the Assistant Director_General (“ADG”). Diesel purchases for the “quarters” in the month of April totalled N4, 771,500.00 (Four Million Seven Hundred and Seventy One Thousand and Five Hundred Naira).
(v) In the month of June, Mercilia Limited was paid the sum of N2,063,375.00 (Two Million, Six Three Thousand, Three Hundred and Seventy Five Naira) for the renovation of the ADG’s house in Omole Phase II. In the same month, Mercilia Limited supplied the ADG’s new 81 KVA generator for the sum of N3, 861,600.00 (Three Million Eight Hundred and Sixty One Nigeria Stock Exchange Status Update/Report 29 September 2010 KPMG + Aluko Oyebode & Co.
18 Thousand Six Hundred Naira). There is however no indication of where the generator was supplied and installed. Mercilia Limited was again paid the sum of N2, 388,360.00 (Two Million Three Hundred and Eighty Eight Thousand Three Hundred and Sixty Naira) for the renovation of a building.However, the description and ownership of the building in respect of which the renovation was made is not yet known.
Furthermore, certain items were purchased from Adam and Eve to the tune of N2, 087,400.00 (Two Million and Eighty Seven Thousand Four Hundred Naira). These items include beddings, toilet items and window blinds.
(vi) In the month of November 2008, Mercelia Limited was paid the sum N5,
440,320.00 (Five Million Four Hundred and Forty Thousand Three Hundred and Twenty Naira) for the “electrical installation and repair of generator”.
(vii) In the month of December, Adam and Eve was paid a total of N7, 300,230.00 (Seven Million Three Hundred Thousand Two Hundred and Thirty Naira). We sighted the invoice for purchases totaling this amount. The invoices relate to household items and were approved by the DG. We also sighted an invoice from Liiyaz Qee Ventures for the sale of Panasonic air conditioner for the sum of N8, 500,000.00 (Eight Million Five Hundred Thousand Naira}.
We have not been able to verify where this air conditioner was supplied.
Overall, we note that Mercilia Limited featured prominently in expenses relating to this MSQ ledger. We are currently conducting a search on the said Company at the CAC and will also review movements to and from its accounts. Further investigations will focus on ascertaining the actual persons to whom these items were delivered, where not already ascertained.
Nigeria Stock Exchange Status Update/Report 29 September 2010 KPMG + Aluko Oyebode & Co.Our investigations reveal that the total sum expended on Maintenance of Staff Quarters in that year prior to reclassification was N 135, 067,773.39 (One Hundred and Thirty Five Million, Sixty Seven Thousand, Seven Hundred and Seventy Three Naira, Thirty Nine Kobo), the sum of N64, 285,898.60 (Sixty Four Million, Two Hundred and Eighty Five Thousand, Eight Hundred and Ninety Eight Naira, Sixty Kobo) was reclassified under different expense heads. For instance, the sum of N45, 250,000.00 (Forty Five Million,
Two Hundred and Fifty Thousand Naira) was reclassified to website hosting expenses ledger. We have conducted a detailed review of major expense items under the MSQ Nigeria Stock Exchange Status Update/Report 29 September 2010 KPMG + Aluko Oyebode & Co.16 ledger for the years 2008 to 2009. We have also conducted an oral interview
with an officer of the NSE in respect of this ledger account.
Our inquiries to date reveal the following:
(i) Contrary to the title of this ledger, expenses recorded in this ledger relate to private residences of the DG,