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FG Sues Oil Firm Over $3bn Unpaid Taxes

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The Federal Government, through the Office of the Attorney-General of the Federation, has commenced legal proceedings against Addax Petroleum Development Nigeria Ltd, a Chinese-owned oil firm, over the company’s alleged under-remittance of $3billion in taxes and royalties.
Documents before Justice Mojisola Olatoregun showed that the funds are outstanding claims against the company under the Petroleum Profit Tax Act and Petroleum (Drilling and Production) Amendment Regulation 2003 over Oil Mining Leases (OMLs) 123, 124, 126, and 137.
Joined as respondents are Addax Petroleum Development Nigeria Ltd, Addax Petroleum Exploration Nigeria Ltd, the Nigerian National Petroleum Corporation (NNPC), the Ministry of Petroleum Resources, Department of Petroleum Resources, and the National Petroleum Investment and Management Services (NAPIMS).
D.A. Awosika and Partners, counsel representing the Federal Government, stated that the $3billion unremitted funds came as a result of the oil multinational’s illegal and irregular reliance on side letters dated November 21, 2001, December 20, 2001, and August 24, 2004, that were never gazetted.
The government moved to recover the funds from Addax after report on how the Chinese firm allegedly paid millions of dollars in bribes to Nigerian officials to secure juicy contracts in the oil industry.
In 1998, Addax Petroleum, a subsidiary of China’s Sinopec Group, one of the world’s largest oil and gas producers, entered into a Production Sharing Contract (PSC) with the NNPC (as concessionaire) in respect of OPL 98/118 and OPL 90/225.
Four years later, the company discovered oil in commercial quantities and the OPLs were converted into Oil Mining Leases (OMLs) 123/124 and 126/137.
The PSC entered by the two parties required Addax Petroleum to pay royalties on any oil produced from the relevant oil blocks at the rate of 20 per cent as stipulated by law. It also provided that the Petroleum Profit Tax Act (PPTA) applicable to the contract areas shall be 65.75 per cent for the first five years, starting from the first day of the month of the first sale of the oil, and 85 per cent thereafter.
D.A Awosika & Partners are insisting that Addax Petroleum fraudulently obtained a side letters in 2001 and 2004 that were “never gazetted” and which they used in calculating their taxes and royalties.
The calculations in the side letters fixed the PPT payable by the company at 60 per cent, and rather than the 20 per cent flat rate of royalty, provided for a graduated rate depending on the volume of oil produced from the oil blocks.
The said letters were signed by then Special Assistant on Petroleum and Energy to former President Olusegun Obasanjo, Mr. Funsho Kupolokun, in 2001 and the then Director General/Special Adviser on Budget to the President in 2004, Mr. Olabode Agusto.
“Several objections and protests were raised by Federal Inland Revenue Service (FIRS), NNPC, and DPR to the reliance on these side letters by the defendants to bypass, supplant, and subvert the process,” the government’s lawyers stated.
“In 2003, in order to give effect to the graduated royalty regime stated in the side letters, the Minister of Petroleum Resources (Obasanjo) issued the Petroleum (Drilling and Production) Amendment Regulations, which provided for graduated royalty rates for onshore and shallow offshore PSC which did not account for royalty by tranches.
effect from the first day of January, 2000, which was the same date of commencement of the graduated royalty rates contained in the side letters.”
Several meetings between Nigerian government officials – represented by the FIRS, DPR, and NNPC – and representatives of Addax Petroleum reassess and resolve the latter’s “colossal underpayment” to the government between 2007 and 2012 yielded no results.
But Addax Petroleum maintained its right to the use of the side letters for computing the taxes on its operations and dragged the government over accusations of a breach of their 1998 PSC on the oil blocks.
In suit FHC/ABJ/CS/1099/2014 filed before former Chief Judge of Federal High Court Ibrahim Auta, the company sought a judicial approval towards their continued use of the side letters to compute its financial obligations to the Nigerian government.
However, on May 26, 2015, three days before the administration of the then president, Goodluck Jonathan, handed over to his successor, Muhammadu Buhari, the government negotiated a controversial out-of-court settlement with Addax Petroleum, agreeing to pay the company $3.4billion (about N1trillion).
Court papers filed by the Nigerian government’s lawyers stated that Addax Petroleum “surreptitiously teamed up” with some officials of DPR, FIRS, and NNPC to execute certain terms of settlement that were eventually made the Consent Judgment of court, notwithstanding the pendency of several applications yet to be heard by the same court.
“In executing the said terms of settlement, the authorities were not sought, no approval at Federal Executive Council level was given, the governing boards of the FIRS, NNPC and DPR did not authorise those officers that executed the bogus terms of settlement to so act,” the lawyers argued.
However, when President Muhammadu Buhari’s assumed office, the NNPC in a letter to Addax Petroleum endorsed by the president and dated September 7, 2015, reversed the agreement entered into by the previous administration.
In the ongoing suit before Justice Olatoregun, the federal government is seeking an order directing the NNPC, Ministry of Petroleum/DPR, and NAPIMS from further allocation of crude oil explored from OMLs 123, 124, 126, and 137 to Addax Petroleum pending when the company furnishes the court verifiable Bank Guarantee from Nigerian banks to cover the monetary claims of the plaintiff.
Other prayers sought by the Nigerian government include an order restraining the NNPC, Petroleum Ministry, and NAPIMS from dealing with Addax Petroleum, as well as stopping them from transferring or assigning their interest in the OMLs to another person.
Also, an order compelling the Nigerian agencies to file an affidavit of fact detailing the company’s assets, properties, and funds.
On Friday, Justice Olatoregun granted an order for the government’s lawyers to serve court papers to the NNPC, the third respondent in the suit, whose office is situated in Abuja, outside the court’s jurisdiction.
She thereafter adjourned the suit till May 3, 2018.

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Fashola Faults ‘Coat Of Arms’ Display On National Flag

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Former Minister of Works and Housing, Babatunde Fashola, has cautioned Nigerians from inscribing the coat of arms on the national flag, saying doing so is a misuse of the national colours.
Fashola said this on Monday, during a live appearance on Channels Television’s Empowering Tomorrow: A New Vision for Nigeria, a special programme on the 63rd anniversary of Nigeria’s independence celebrated annually on October 1.
“Just this afternoon, I was asked to hoist a flag of Nigeria. By the time the flag unfurled, I saw that there was a coat of arms in the middle and I whispered to my host that ‘this is not the flag of Nigeria’. Nigeria’s flag does not have a coat of arms in the middle. It is green, white, and green”, Fashola said.
The former minister also said that Nigerians should pay attention to “some of the small things that matter”, adding that national symbols are to be rendered during recognised events for the country at large.
“When I was in primary school, these were the symbolisms of those Independence Day parades, Children’s Day parades, and this was how we were taught to stand up or maintain our position whenever we heard Nigeria’s national anthem being rendered,” Fashola said.
“You sit today and you shudder in your skin what happens today, what people have been taught when the national anthem is rendered”, he added.
The former governor of Lagos also spoke out against the rendition of the national anthem “at every little event”, including when the president appears at a social event, saying it is to be sung as the symbol of the country’s sovereignty.
“I have had cause to ask people not to sing the anthem for me, either as governor or minister, because I’m not a sovereign. It’s a projection of our minds,” he said.
“These are, for me, the important things to talk about and that’s why I say this anniversary provides an opportunity for reflection and, indeed, inflection”, Fashola added.

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NCDC Records 1,968 Lassa Fever Cases In 28 States

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The Nigeria Centre for Disease Control and Prevention (NCDC) has registered 1,068 Lassa fever infections across 112 local government areas in 28 states of the federation.
The NCDC said this yesterday, via its official website in its Lassa Fever Situation Report for Week 37 (September 11 -17, 2023).
The centre indicated that 75 percent of the cases were detected in Ondo, Edo, and Bauchi states.
Lassa fever is a viral hemorrhagic fever caused by the Lassa virus. It is primarily found in West Africa, particularly in Sierra Leone, Liberia, Guinea and Nigeria.
The virus is transmitted to humans through contact with the urine or feces of infected rodents, specifically the multimammate rat.
According to the NCDC, there are currently 7,352 individuals with suspected cases and the infection has resulted in the unfortunate loss of at least 181 lives in the country.
The centre said that the case-fatality ratio of the infection stood at 16.9 percent.
“Cumulatively from week 1 to week 37, 2023, 181 deaths have been reported with a case fatality rate of 16.9 percent which is lower than the CFR for the same period in 2022 (19.1 percent).
“In total for 2023, 28 States have recorded at least one confirmed case across 112 local government areas.
“Seventy-five percent of all confirmed Lassa fever cases were reported from these three states (Ondo, Edo, and Bauchi) while 25 percent were reported from 25 states with confirmed Lassa fever cases.
“Of the 75 percent confirmed cases, Ondo reported 35 percent, Edo 29 percent, and Bauchi 11 percent.
“The predominant age group affected is 21-30 years (Range: 1 to 93 years, Median Age: 32 years).
“The male-to-female ratio for confirmed cases is 1:0.9. The number of suspected cases increased compared to that reported for the same period in 2022,” it said.
It said that in 2023, Lassa fever infected 49 healthcare workers across the country.
The agency said that the National Lassa Fever Multi-partner, Multi-sectoral Emergency Operations Centre had been activated to coordinate the response activities at all levels.
It added that prevention of Lassa fever involves avoiding contact with rodents and their droppings, practising good personal hygiene and taking precautions when caring for infected individuals.
The NCDC said that early diagnosis and prompt medical care are crucial in managing the disease and preventing complications.

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Army Orders Investigation Into Allegation Of Troops’ Poor Feeding

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The Chief of Army Staff (COAS), Lt.-Gen. Taoreed Lagbaja, has ordered an investigation into an allegation of poor feeding of frontline troops in the North East Theatre of Operations.
The Director, Army Public Relations, Brig.-Gen. Onyema Nwachukwu, made this known in a statement in Abuja, yesterday.
Nwachukwu said that the welfare of troops had been given premium by the present leadership of the Nigerian Army and was one of the vital pillars of the COAS Command Philosophy targeted at motivating the Force.
“The Nigerian army therefore takes these allegations very seriously and COAS has directed immediate investigation into the complaints to ascertain its veracity and unravel the circumstances,” the army spokesman said.
Nwachukwu assured the public and all army personnel that a thorough investigation would be conducted to get to the bottom of the claims.
He said the Nigerian army had always prioritised the welfare of troops, including their nutrition, adding that it has a comprehensive feeding system for troops, especially those serving at the frontline.
“We, however, acknowledge that there may be isolated incidents where lapses occur, and we are determined to squarely address them.
“An internal investigation has already been initiated to ascertain the truth behind these allegations.
“We will thoroughly examine the supply chain, the quality of food provided, and any other factors that may have contributed to this situation,” he said.
Nwachukwu stressed that the Nigerian army remained committed to transparency and accountability, and would not condone any form of negligence or misconduct.
“If any culpability is detected, it will attract appropriate disciplinary action and immediate corrective measures to ensure that such incidents do not recur in the future,” he assured.
Nwachukwu called on Army personnel to report any grievances or concerns they might have regarding their feeding arrangements through the established channels for feedback, assuring that prompt action would be taken to address any legitimate complaints.
He said that the Army would continue to be resolute in the fight against insurgency and other security challenges, and would ensure that its soldiers were provided with the necessary support and care to carry out their duties effectively.
“We are committed to ensuring that our troops are well-fed, motivated, and equipped to defend our nation,” he added.

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