‘Brazen’ payment swap deal at RMAFC: Oil-producing States ask court to set aside consent judgment in favour of company not originally involved in contract execution
All nine oil-producing states, except Imo, have rejected a proposed payment swap by the Revenue Mobilisation, Allocation & Fiscal Commission (RMAFC) to a company claiming to be their representative other than the original company, Zilcon Higgs International Ltd.
The States recalled that the company, Tiaras White Consults Limited, never represented them or executed any contract on their behalf and therefore, should not be paid by RMAFC.
The State’s reaction is coming a few weeks after the real company, Zilcon Higgs International Limited, petitioned President Bola Tinubu, accusing RMAFC of trying to pay Tiaras White Consults Limited for a contract it (Zilcon Higgs) executed on behalf of the nine oil-producing states.
Zilcon Higgs, in the petition to Tinubu, said it was contracted by Governors of the nine oil-producing States to recover USD 2,471,040,983.38 omitted in the recommendation of the FAAC Post-Mortem Committee, in an earlier refund to the states, which it did, but at the point of executing the payments, RMAFC, in connivance with others, attempted to attribute to the company the works of Zilcon Higgs International Ltd.
Meanwhile, RMAFC, for some inexplicable reason, had concluded plans to swap the payments in favour of Tiaras White Consts that was registered on July 26, 2023, eight months after the execution of the contract by Zilcon Higgs.
In aligning with Zilcon Higgs, the oil producing states – Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Ondo and Rivers – in separate suits before a Federal High Court, Abuja, rejected a consent judgment obtained by Tiaras White Consult Limited, which the RMAFC wanted to execute, insisting that the company (Tiaras White) never executed the claimed contract.
They, therefore, requested the court to set aside the said consent judgment in suit number FHC/ABJ/CS/1320/2023 delivered by the court on December 15, 2023.
In the suits, the States avered that they never at any time engaged Tiaras White Consults Limited, “who instituted this suit purportedly on behalf of nine oil-producing States. The suit giving rise to the consent judgment was instituted without the knowledge, consent and approval of the oil-producing States.”
The oil producing States further averred that the “Registered Trustees of the Nigerian Governors Forum, whom Tiaras White Consults Limited alleged to have engaged it, lacks the capacity to engage any consultant on behalf of the oil-producing States or any other State of the federation.”
They also pointed out gross misrepresentations in the suit leading to the consent judgment.
According to them, in Part B Paragraph (vi) of the contrived “Terms of Settlement” and its resulting Consent Judgment in this suit, Tiaras White Consults Limited unilaterally allocated to itself a whooping sum of $211, 683, 684. 19 and an additional sum of $119, 000, 000.00 totally $330, 683, 684. 19 (equivalent of N545, 628, 078, 913.50) as legal fee, mediation and incidental costs.
Another misrepresentation, according to the oil producing states, was that the Accountant General of the Federation and Minister of Finance, who were misrepresented to have consented, “never authorised nor signed the Terms of Settlement and never participated in the proceedings leading to the consent judgement.”
The contract to Zilcon Higgs International for the recovery of USD 2,471,040,983.38, being an amount omitted in the recommendation of the FAAC Post-Mortem Committee in an earlier refund meant for the oil producing States, arising from unpaid 13% derivation accruable from withdrawals from Excess Crude Account between 2005 and 2010, has been a subject of a subsisting court judgment for some time now.
Zilcon Higgs International had opened a can of worms when it sent a petition, signed by the chief executive officer, Hon. (Dr.) Sampson Orji, to President Tinubu, with accompanying documents.
In the petition, Zilcon Higgs said: “In 2022, this firm, having previously handled several of such recoveries for the oil-producing states, initiated a class action in a civil proceeding to recover the above sum of money for the oil-producing States.
“We have records of the letters we wrote to each of the States, including Imo State, their responses, and their engagement letters to us. In November 2022, we received a judgment in favour of the States in suit No. FHC/ABJ/CS/1924/2022, attached as Annexure A.”
The letter from Zilcon Higgs to RMAFC dated September 30, 2022, reads: “We have been briefed and our consultancy services retained by the oil producing States to wit: reconcile the shortfall in the ongoing monthly deductions.”
The petition to President Tinubu further stated that “Our pre-action notice to the Chairman of RMAFC dated 30th September, 2022, was very explicit on our brief from the States and the findings at the time, attached as Annexure B.
“Our letter to Mr Chairman dated 16th December 2022, by which we forwarded copies of our letters of engagement from the respective states is also attached as Annexure C.”
In another letter dated December 16, 2022, from Zilcon Higgs to RMAFC, the petitioner stated: “Pursuant to our letter dated 7th December 2022 on the above subject, and in further proof of our locus standi in the class action on behalf of the beneficiary States, we insist that we have the consent of all nine states in the action. It has, therefore, become imperative that we forward to your good offices some of the engagements by the states…”
The petition to Tinubu further stated: “Being the lead judgment debtor, we wrote Mr Chairman (RMAFC) a letter dated 7th December, 2022, requesting implementation of the judgement, attached as Annexure D.”
The company also stated in their letter to Mr. President, that in response to its letter, the Chairman of RMAFC constituted a committee to recommend implementation of the judgment.
“The committee comprised representatives of the States’ Commissioners of Finance and their Accountants General, Directors from the office of the Minister of Finance, Office of the Accountant-General of The Federation, RMAFC and Staffers of this firm, Zilcon Higgs International Ltd. The committee was headed by one Alhaji Tanimo of RMAFC (see attached letter of invitation from the RMAFC and membership of our company to the Committee, marked as Annexure E.
There was yet another letter from RMAFC to Zilcon Higgs on the committee the company referred to, which reads:
“You may wish to note that a meeting was held on 22nd December 2022 between the Commission and the Office of the Accountant General of the Federation on the implementation of the Federal High Court judgment delivered in Suit No FHC/ABJ/CS/1924/2022… It was resolved that an ad-hoc reconciliation committee be set up.’)
“Mid-way into the deliberations of the committee, Mr. Chairman (RMFAC) without notice to the Committee, personally deposed to an affidavit with which he instructed his personal lawyer to file an application in court to set aside the same judgment for which he inaugurated the Committee,” Zilcon further wrote in his petition to the president.
“This action of Mr. Chairman expectedly stalled further deliberations of the committee and made it subjudice. Upon the hearing of his application in court, after several adjournments, same was dismissed for ‘abysmally lacking in merit.'”
Zilcon Higgs said that it wrote several letters to the RMFAC Chairman on the subject matter, particularly referring to a letter dated April 26, 2023, “by which we further demanded the implementation of the judgement after the Court ruling of 6th April, 2023, attached
as Annexure F.”
The company said that shockingly, another company, Tiaras White Consults, was registered, eight months after the judgment, and attributed to having done the job and RMAFC started making arrangements to pay the commission to it.
Zilcon Higgs said: “In April, 2023, Mr. Chairman found a collaborator in one of the South East Governors … He got the same individual to author a letter of disclaimer on our company, five months after we had concluded the said work and obtained judgment on behalf of the oil-producing states. It was shocking as it was scary, given that the same State Governor had exchanged correspondence with us on the same matter and had benefited from our earlier recovery in 2020 (see attached marked Annexure G).
“Again, on June 24th 2023, the same Governor, curiously issued a letter of engagement to a yet-to-be registered company for the same recovery we had concluded, same subject, same amount, and signed as Chairman of ‘Oil and gas producing States Forum’, see attached marked Annexure H.”
The company said that “on July 26, 2023 Tiaras White Consult Ltd. was registered, see attached CAC Status Report marked Annexure I, for the sole purpose of claiming to have done an already concluded work, eight months after Zilcon Higgs had obtained judgement on the said work.”
The status report from the Corporate Affairs Commission on Tiaras White Consults Ltd, revealed that the company was registered on July 26, 2023 with registration number: 7069595.
Zilcon Higgs said that on August 8, 2023, the Nigeria Governors’ Forum, under the Chairmanship of Governor AbdulRahman AbdulRazak, issued a letter to Tiaras White Consult Ltd. as consultant to the Oil-Producing States on the concluded work, referring to its application of June 15, 2023, when the company was yet to
be registered (attached as Annexure J. Tiaras white was only registered on July 6, 2023 and the letter said it applied on June 15, 2023, for a job already concluded in 2022.
According to Zilcon Higgs, shortly after the registration of Tiaras, all of its (Zilcon Higgs) documents in RMAFC office, were passed off to the new company, replicated and copied verbatim from its work in suit no: FHC/ABJ/CS/1924/2022, and filed same.
According to the company, “no sooner had they filed the suit than they quickly abridged the hearing date from 22nd January 2024, to 15th December, 2023. The office of the Chairman of RMAFC …hired an external solicitor for Accountant General of the Federation without recourse to the OAGF and caused same to sign off an obnoxious ‘Terms of Settlement’ on the 8th of December 2023, attached as Annexure K.”
Zilcon Higgs said that they “deceived the court to adopt the so-called Terms of Settlement as ‘Consent Judgement’ on Friday the 15th, December, 2023, being the last sitting day of the Court for the year 2023. The office of the Honourable Minister of Finance and Accountant General’s office have since filed disclaimers
against the ‘consent judgment’, as they both were never parties to the …Terms of Settlement that culminated in the ‘Consent Judgment.'”
The company said that the RMAFC Chairman thereafter moved to implement the ‘Consent Judgment’ on the next week day, being Monday the 18th December, 2023, while foot-dragging on Zilcon Higgs, which got a legitimate Judgment in November 2022.
It said that on December 18, 2023, the RMAFC Chairman authorised a payment mandate letter to Accountant General of the Federation, mandating her to begin the payment same December month and to pay to Tiaras White a consultancy and legal fee of over USD 330,000,000, based on the consent judgement obtained the previous Friday.
Zilcon Higgs said: “Upon our petition in December, 2023 to the Accountant General of the Federation, the Honourable Minister of Finance and EFCC, annexing all the documents to prove our case, the payment, thankfully, was halted.
“Notwithstanding the above scenario, Mr. Chairman wrote another payment mandate letter to the Honourable Minister of Finance dated 12th January 2024, insisting on the… payment but which was ignored by the Honourable Minister.”
The company said that it petitioned EFCC, which commenced an investigation. According to it, “as soon as the EFCC commenced investigation on our petition and following Mr. Chairman’s denial of our engagement by the states, we were asked to submit our letters of engagement from the oil-producing states, which we gladly did. The letters were later returned to us after several months of investigation and verification with the states. The EFCC further interrogated Alhaji M.B Shehu and all the staff of RMAFC who were privy to the subject matter.”
Zilcon Higgs expressed shock that the RMAFC Chairman, in his response to EFCC “continued to deny knowledge of our work and our engagement letters in spite of his acknowledged receipt of our letter dated 16th December 2022, by which we forwarded to him our letters of engagement from the respective states. Copies of these letters are still in his custody as well as with the EFCC, while the original copies are with us.
“Mr. Chairman (RMAFC) has continuously been authoring letters to deny our work and insisting on Tiaras receiving consultancy fees for work he knew nothing about. Only recently,… Mr. Chairman still ignored the pending petition in EFCC and subsisting court action which he acknowledged in his letter dated 18th January, 2024, attached as Annexure M, and continues to persuade the Honourable Minister to begin the Payment, attached as Annexure N.”
Zilcon Higgs told President Tinubu that the “states who are entitled to their payment based solely on the judgement of 29th November, 2022 are being systematically denied the same, in spite of the constitutional mandate for such payment, “just as we are being denied our consultancy fee as a result of this.”
Zilcon called for the investigation of the RMAFC Chairman, stating: “Mr. President, paragraph 31, part 1 of the third Schedule of the 1999 constitution of the Federal Republic of Nigeria (as amended) sub. B, states inter alia, that Members of the Commission are appointed by Mr. President as those ‘who in the opinion of Mr. President are persons of unquestionable integrity with requisite qualifications and experience.'”
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