The House of Representatives has intensified its investigation against the Chief Executive Officers of MTN Nigeria, Globacom, Airtel Nigeria, 9Mobile and others over the roles of their firms in alleged $30 billion foreign exchange frauds in the telecoms sector. The lawmakers also threatened to arrest the CEOs if they are not cooperative.
Why the arrest threat? The lower chamber accused the CEOs of frustrating its investigation into alleged $30 billion leakages in the sector, which is tied to alleged foreign exchange frauds said to have been committed by the operators.
The House has reportedly summoned 15 telecoms operators, but they all shunned the request. This prompted the lawmakers to issue a seven-day ultimatum to the CEOs to appear before its Committee on Finance or a warrant for their arrest would be issued against them.
This was stated at the plenary session of the House when the Chairman of the committee, James Faleke, updated the lower chamber of its probe since the March 5, 2020 resolution, which mandated the joint committees on Finance, Banking, and Currency to investigate the over $30 billion revenue leakages in the sector.
During his address to the House, Faleke said, “In order to give a fair hearing, we wrote letters to the companies and some of them, under the auspices of Registered Trustees of Telecoms Operators, found it necessary to go to court.
“On the 13th of March, the court delivered judgment in favour of the National Assembly, that the National Assembly has the powers to invite anybody.”
Faleke says firms evading taxes: According to Faleke, these companies are evading taxes. He cited an unnamed company that is operating 100% in Nigeria but only 10% of its interest is taxed in Nigeria while the other 90% is taken to Mauritius.
“In Nigeria today, we are in a very critical situation. Many of these companies have been evading taxes over and over again, taking loans for infrastructure. There is a company that operates in Nigeria 100% but only 10% of its interest is taxed in Nigeria, while the remaining 90% is taken to Mauritius.
“This company only has a representative office in Nigeria. What this means is that the remaining 90%, running into several billions of dollars, which are paid to Mauritius, is not taxed in Nigeria.
“We have companies who took loans in foreign currency for an equipment loan, brought the goods to Nigeria and the next day, the equipment was credited to another country. They took the loan of about $90m; the money went into the company account and the next day, the money was transferred to shareholders in Mauritius.”
He explained that “They bring these goods in for record purpose so that they can get the capital allowances usually given for equipment not used in Nigeria. These are pieces of equipment that are supposed to be brought in and duties paid.
“By going to court, they sought to prolong and delay the activities of the National Assembly. If we allow this to continue, then we have no business being here.
“We have figures of tax evasion running into several billions of dollars against these companies, but we didn’t want to believe these figures. Rather than submit their documents, they felt the best way was to head for court.”
He emphasized that, “This parliament has powers to summon anybody, including Mr President,” Faleke said while several other lawmakers called for a thorough investigation and prosecution of companies working against Nigeria’s economy.