December 13, 2018

No $1.05bn NLNG fund missing- Senate committee

No $1.05bn NLNG fund missing- Senate committee

Mr. Maikanti Kacalla Baru

The Senate Committee on Gas Resources and the Nigeria National Petroleum Corporation (NNPC) on Thursday says no 1.05 billion dollars is missing from the Nigerian Liquefied Natural Gas (NLNG) dividend account.

Bassey Akpan

Chairman of the committee, Sen. Bassey Akpan, and the Chief Financial Officer (CFO) of NNPC, Mr Isiaka Abdulrazaq, stated this at a meeting between members of the committee and NNPC officials in Abuja.

Akpan and Abdulrazaq noted that contrary to media reports, the issue at stake is on the legality of the utilisation of the 1.05 billion dollars by the NNPC for importation of fuel, and not on whether or not the money is missing.

The meeting was in continuation of investigation by the committee into the utilisation of the 1.05 billion dollars by the NNPC from the NLNG dividend fund to “augment under-recoveries” in fuel importation.

Mr. Maikanti Kacalla Baru

The Group Managing Director of the NNPC, Mr Maikanti Baru, confirmed the spending at a Senate hearing recently.
Baru had said the NNPC took the action following the removal of fuel subsidy in 2016, and the resultant withdrawal of independent oil companies from importation of the product.
He had said the withdrawal was in line with the NNPC Act which empowers the company to fund its operations from its revenue.

But the lawmakers believe the NLNG dividend fund is revenue meant for the three tiers of government and thus the NNPC lacks powers to unilaterally draw from it.
At Thursday’s meeting, Akpan said documents made available to the committee by the NNPC showed that another 1.05 billion dollars was transferred from the NLNG account.
He asked why the NNPC vide a letter dated Nov. 30, 2016, authorised the CBN to transfer the money and for what purpose.

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Responding, Abdulrazaq said the transaction was an internal entry of the CBN regarding the movement of the fund from one NLNG dividend account to another, and not payment to a third party.
Throwing more light on the transaction, the Group Managing Director, Treasury, of the corporation, Mr Dapo Segun, said there are two NLNG dividend accounts.
Segun identified the accounts as the NLNG Bank of International Settlement (BIS) Account and the NLNG Standard Chartered Bank Account.

He said that following the adoption of the Treasury Single Account policy of the Federation Government, deposit money banks holding the NLNG dividend funds were directed to transfer them to the CBN. The CBN, according to him, told the NNPC that it had deposited the funds in the NLNG BIS Account, which he said was not operational.

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Segun said the Nov. 30, 2016 memo cited by the Akpan simply asked the CBN to transfer the money from the BIS Account to the NLNG Standard Chartered Bank that was operational.
“So, CBN did move the money pursuant to our instruction, and then subsequently, CBN reversed that transaction which was still between NLNG accounts.
“So, the money never left the NLNG dividend account; it moved from one NLNG dividend account to another NLNG dividend account,” he said.

After Segun’s clarification, Abdulrazaq told the senators that the CBN was in the right position to explain why it reversed the transfer from NLNG Standard Chartered Account to the BIS Account.
He noted that the issues being discussed at the hearing bordered on the legality of the utilisation of the 1.05 billion dollars on fuel importation, and not on whether or not the money was missing.
The NNPC CFO said the clarification became necessary following misleading reports in the media that the money was missing.

Abdulrazaq said the reports were sending wrong signals about the government to its foreign partners and potential investors.
At this point, the committee chairman pleaded with newsmen around to refrain from misrepresentation of facts and report the proceeding verbatim.

Akpan said, “Please pressmen, nobody is saying that money is missing, I plead with you to report the outcome of this meeting verbatim.
“We are only engaging the NNPC to understand the rudiments and dynamics of the NLNG dividend account,” he said.(NAN)