£2.5 billion Scam: Union Bank, CBN vs Petro Union resume hearing on Monday

All eyes will once again be fixed on the Supreme Court on Monday, as it continues its hearing on a matter involving the Central Bank of Nigeria (CBN), Union Bank of Nigeria (UBN), others and an oil and gas company – Petro Union Oil and Gas Company Limited (Petro Union), over an alleged £2.556 billion fraud attempt.

The hearing at the apex court continues even as Petro Union officials answer to criminal charges at the Federal High Court in Lagos on the same matter, which according to the EFCC is a brazen attempt to defraud the Federal Republic of Nigeria and UBN of the mind-boggling sum, in a manner reminiscent of the infamous $10 billion Process & Industrial Development Limited (P&ID) fraud case.

Monday’s hearing comes after the last hearing on Monday, 28 June 2021 was disrupted due to an ongoing disagreement between two of the lawyers of Petro Union, Joe Kyari Gadzama, SAN, and Onyechi Egwuonwu, over how the judgement sum will be shared if their case eventually succeeds.

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As the Petro Union case resumes, expectations are high that the Supreme Court of Nigeria will deliver a sound decision, especially as the criminal case at the Federal High court continues to unravel evidence which indicate that the judgments in favour of Petro Union at the lower courts, were allegedly obtained by fraud.

Petro Union’s antics began in 1994 when the company allegedly procured a cheque from a branch of Barclays Bank in the UK with a value of £2.556 billion and presented it at one of Union Bank’s branches in Lagos, under the pretext that the oil company was meant to use the funds to construct three petrochemical refinery complexes in Nigeria and establish a bank in Nigeria. While the required due diligence investigations were being carried out, one Mr. Okpala, the Managing Director of Petro Union, allegedly inundated the Bank and the CBN with visits and demands for the release of the cheque.

READ: Why CBN sacked board of First Bank

Eventually, both the CBN and Union Bank advised Petro Union that Barclays Bank in the UK had been contacted and had subsequently confirmed that the cheque could not be given value to because the company that purportedly issued the cheque dated 29 December 1994 (a company, known as Gazeaft Limited) did not exist on the Register of Companies in the UK. The response similarly affirmed that the account on which the cheque was drawn was closed on 21st September 1989 whereas the cheque was issued on 29 December 1994 – five years after the account was closed.

Despite the foregoing startling discovery and decisive response, Petro Union and Isaac Okpala persisted with their demands, culminating in a petition by the company to the Lagos office of the EFCC, for alleged offences of stealing and criminal conversion against the CBN and Union Bank. Following, the petition, the EFCC investigated the allegation by interrogating the CBN through a letter dated 12th January 2005. In a letter dated 27th January 2005, The CBN responded to the query by the EFCC wherein it denied the allegations of Petro Union. The EFCC also made other efforts to investigate the allegations including corresponding with Barclays Bank in the UK. Having concluded its investigation, the EFCC issued a letter dated 10th May 2005 addressed to the Managing Director of Union Bank exonerating the Bank from any wrongdoing.

READ: How scammers use SIM card, phone numbers to rob your bank accounts

However, in its desperation to use the allegedly forged cheque to perpetrate the fraud on CBN and Union Bank, Petro Union in February 2012 instituted an action at a Federal High Court, Abuja seeking sundry reliefs against (1) CBN, (2) Union Bank, (3) Hon. Minister of Finance and (4) The Attorney-General of the Federation following the allegation that Union Bank of Nigeria received the sum of £2,556,000,000.00 on behalf of Petro Union and transferred the sum of £2,159,221,318.54 to the CBN while retaining the sum of £396,778,681.46 as commission.

Petro Union further alleged that the money is kept in an account in the name of a company called Goldmatic Limited at the CBN and tendered a purported CBN Statement of Account of Goldmatic Limited. The Federal High Court, Abuja Judge before whom the claim was filed, Honourable Justice Abdu Kafarati accepted the purported CBN Statement of Account as conclusive evidence that CBN had retained the money alleged to belong to Petro Union, despite the elementary fact that globally a central bank cannot open an account for a private entity – the CBN is statutorily empowered to act as bankers to government and bankers to banks.

Although Petro Union and its directors presumably knew these facts to be false from the onset, they pursued the so-called fraud up to the Court of Appeal where they obtained judgement to establish that the £2.159 billion was lodged in the coffers of the Central Bank of Nigeria.

Union Bank, therefore, appealed to appellate courts to set the judgment aside, urging the courts to deliver justice in the matter especially when the truth of the alleged fraud had been uncovered following the arrest, detention and ongoing criminal prosecution of Petro Union and its officers at a Lagos Federal High Court.

The judgment obtained by Petro Union at the Federal High Court in 2014 for the sum of £2.556 billion also carries an interest of 15% per annum from 22nd June 1995 until payment. Today, that judgment sum together with interest is in excess of £12 billion (about $15.5 billion).

Written by Ebenezer Johnson based in Port Harcourt