An Alliance of Fraud

Ajagu, Director, Standard Insurance Alliance.

Standard Alliance Insurance Plc has many claim cases against it, including the N25 million owed Jimsina International Limited
By Udo Onyeka
NOT too long ago, not many Nigerians would think of an insurance cover, not to talk of taking one, either in the area of life or business. But today, all that seems to be changing as many people are beginning to imbibe the culture of taking insurance coverage for both their businesses and life. This gradual change according to sector watchers, is due mainly to reports that insurance firms now pay claims to their customers as at and when due.
But if reports available to The Source concerning Standard Alliance Insurance Plc’s indebtedness of N25 million to one of its customer, Jimsina International Limited, is anything to go by, then the company can easily be described as a clog in a wheel of growth in the insurance industry. At the center of this alleged fraud is the Regional Director (North) of Standard Alliance Insurance, Tayo Awodiya who represented the insurance firm in the business with Jimsina.
According to Adesina Salawu, managing director, Jimsina International Limited, Standard Alliance is not willing to redeem a bond covering the amount of N25.2 million duly signed and delivered on September 20, 2004 with policy number SA/0101/2004/BA/FC.
The Source gathered that in 2004, Jimsina decided to get into the real estate sector of the Nigerian economy and thus invited some Chinese investors from Turnmilo Overseas Limited, to come and build an Economic Community of West African States (ECOWAS) International market for Jimsina International at the company’s site in Agbara Industrial Estate Ogun State.
When the first batch of Chinese partners got to the country for feasibility studies, however, they found out that Nigeria is a member of the Organisation of Petroleum Exporting Countries (OPEC). Upon this realisation, Salawu said that they spoke with Awodiya on how they could get crude oil in Nigeria.
Salawu: “Coincidentally there was an advert in the papers at that time, the Nigerian National Petroleum Corporation (NNPC) was looking for people to bring refined products in exchange for “Naphtaha” a by-product.”
According to him, NNPC wanted him to apply directly to them, since it is a public bidding, “we then bidded,” Salawu said.
He said that the NNPC requested his company, Jimsina to pay N1.35 million non-refundable fee of bidding and on payment of the fee, The Source gathered that Jimsina was told that though the bidding will take place, allocation would be limited, and that bidding was not proof of allocation.
According to Salawu, Jimsina bidded and was not successful and in looking for another way out, they met one official of NNPC who advised them to apply officially for crude oil, promising that NNPC would look into this new offer on merit.
Salawu said that one of his staff, Bashiru Bello, was then dispatched to Abuja to submit his company’s application and that when he came back, he disclosed that application for the crude oil business would be online and that every company followed in turns.
The Jimsina staff while in Abuja, The Source was told, met one Mohammed Audu who claimed to, be the Managing Director of Base Engineering, working for Neka Traum Limited, a subsidiary of the construction giant, Julius Berger Nigeria Limited. Audu was said to have claimed that Julius Berger had an allocation and that if Jimsina International Limited was interested, they could let them have the purported Julius Berger allocation.
Salawu disclosed that for the said Julius Berger allocation to be given to Jimsina, the company had to pay for ownership change and other related matters.
The Source further gathered that Audu demanded to see Jimsina’s contract transaction with ther Chinese partners, Turnmile Oversees Limited and told Salawu that Base Engineering has an allocation which they hoped to transfer to Jimsina as that all that was required from his company was to issue Base Engineering with a bank guarantee, which would secure their payment after the transaction.
Salawu said that at this juncture, he gave Audu a bank guarantee from Equatorial Trust Bank (ETB) worth $250,000 and the contract papers were signed and sealed. But to make sure he was on the right track, Salawu said that he demanded to get a proof from Audu that all transaction papers were actually from Julius Berger but was given a “Power of Attorney” issued by Neka Traum Limited, the purported subsidiary of Julius Berger, empowering Base Engineering to act and prospect for sale of crude oil and related products.
Perhaps, to further verify the authenticity of the document, Salawu demand Audu to contact Julius Berger in his presence – a request which Audu obliged by putting call to Julius Berger through the switch board and spoke with one Fred Holm, an expatriate and National Co-ordinator of Julius Berger who confirmed that indeed they gave the “Power of Attorney” to Audu.
According to Salawu, his Chinese counterparts had at this point began to worry over the transaction but Audu continued to assure him that Base Engineering was sourcing for funds, due to the fact that Julius Berger declined to make funds available for the bank guarantee.
The Source was told that on the sixth day prior to the conclusion of the change of ownership of allocation of the crude oil bloc from Julius Berger, Audu called Salawu to tell him that they were unable to find any bank to finance the product and that cash would be demanded from him to conclude the transaction.
However, before deciding to release the money as requested by Audu, Salawu told The Source that he demanded to see an advanced payment bond from a reputable insurance company, guaranteeing his money before giving out any such funds.
It was at this juncture that Audu now told Salawu that he would get the bond from Standard Alliance Insurance whom they were doing business with before the crude contract came about. The Source gathered that three days later, Audu got an Advanced Payment Bond certificate from Standard Alliance.
In order, to be sure of the source of the bond, Salawu said that he made a call to the Insurance company’s head office where one Wale Koko, after requesting to know the number of the document confirmed that it was genuinely issued by Standard Alliance.
Again, the Insurance Company’s Regional Director (North), Awodiya was also said to have called Salawu, assuring him that the policy was issued by his company.
It was based on the confirmation by the company's head office in Lagos and that of Awodiya, Regional Director (North), Salawu said, that made him pay Audu who equally told him that all the necessary changes had been made and that everything was in order.
According to Salawu, Jimsina International was hoping to see its name at Shell Screen London; which if confirmed would have made the Chinese investors have more confidence in the firm and so go ahead to do business with Jimsina. Shell Screen London is controlled by Lloyd, which co-ordinates vessels and movement of crude oil all over the world. “Audu came with Lloyd documents, clearly stating our name as the beneficiary of the allocation, the name has been changed to Jimsina International Limited” Salawu said.
Indeed, a document bearing the logo of Shell Screen London and made available to The Source, showed that Calson Oil Corporation Nigeria's October lifting of 2,000,000 barrels Bonny light crude oil consigned to Jimsina International Limited.
For this, The Source gathered that Audu was issued two ETB’s Enu-Owa Branch cheques of N15million and N10,235 million respectively, dated September 20, 2004. A third cheque of N7,682million of the same bank and branch was also issued as balance of the N33million.
“The first two cheques were the ones guaranteed by Standard Alliance,” Salawu said.
According to him, the first two cheques of N15million and N10,235million were for the change of allocation while the third cheque of N7,682million was to be used to clear the vessel that would come to load the crude oil from China.
Salawu, after the payment for the transaction forwarded all the documents to China through e-mail so that it could be downloaded. “The Chinese saw this and got back to me requesting for more information because they could not verify its authenticity from Shell Screen London,” he lamented.
Instead of Audu producing more evidence of the genuineness of the Shell Screen documents when confronted, he rather gave Jimsina International a web base of NNPC to confirm directly from them.
Following this, Salawu began to suspect Audu as not being straight- forward in the business.
But when it finally dawned on Salawu that Audu was about to defraud him, and thus decided to back out from the business a call came from China indicating that the Shell Screen document was fake. A flustered Salawu hurriedly put a call to Awodiya who advised him to come over to Abuja.
According to Salawu, Awodiya accepted that the bond was genuine and that his company would pay for the claim.
But as the insurance firm began to drag its feet in paying the claim, Salami reported the case to the Economic and Financial Crimes Commission (EFCC), which picked up Audu and Awodiya.
Surprisingly, Standard Alliance was to renege on its earlier acceptance to pay, claiming that it could not pay because the insured Base Engineering did not pay premium for the cover. The pertinent question thus becomes: if the insurance firm said it didn’t receive premium for the transaction, why did it issue an advance payment bond duly signed, sealed and delivered to the insured, Base Engineering with policy No.SA/0101/2004/BA/FC covering the period between September 20,2004 to October 19, 2004.
Indeed, when The Source reached out to Standard Alliance Insurance, the head, Group Corporate Communications, Nelson Egboboh, said that apart from the fact that Base Engineering Limited did not pay premium on the supposed bond, what was given to the company was only a conditional bond, which he said allows the insurance company liberty to dishonour if it finds out that the business or transaction is not genuine.
Egboboh told The Source that when Jimsina called the office of Standard Alliance to confirm the authenticity of the bond, he was expressly told by Mayowa Adeduro, the group head, Risk Management, that the said bond has not been given approval.
He disclosed that Awodiya who was taken by the EFCC has been released when the Commission found out that he did not connive with Audu to defraud Jimsina, adding that his company had since gone to court to prove its innocence in the transaction.
According to Egboboh, the National Insurance Commission (NAICOM), a regulatory body and the Nigeria Insurance Association (NIA), are aware of the case, pointing out that in fact, “the two bodies do not see any reason(s) why Standard Alliance Insurance should pay since the transaction from the outset is fraudulent.”