Between 2004 and 2020, the Nigerian National Petroleum Company Limited (NNPCL) collected $32.4 billion in dividends and taxes from the Nigerian Liquified Natural Gas(NLNG) on behalf of the Federal government that was never remitted into the Federation Accounts. This was revealed by human rights lawyer, Femi Falana SAN, who in a letter to Finance Minister, and Coordinating Minister for the Economy, Olawale Edun to compel NNPCL to remit the money into the Federation account or face legal action.
According to the stormy legal petrel, the diversion of such a huge amount from the federation account by the NNPCL is not backed by law. Falana said he will be approaching the courts for an order to stop NLNG from paying dividends and taxes through the petroleum company, but directly into the Federation accounts.
The letter reads:
October 24, 2023
Mr. Adebayo Olawale Edun,
Hon. Minister of Finance and
Coordinating Minister of the Economy
Ministry of Finance,
CBD, Abuja
Dear Mr. Edun,
REQUEST TO RECOVER $34.2 BILLION BEING DIVIDEND COLLECTED BY NNPCL ON BEHALF OF THE FEDERATION
On April 27, 2019, the Senate Committee on Public Accounts held a public hearing on revenue generation drive for the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP). During the hearing, the NLNG General Manager, External Relations and Sustainable Development, Mrs. Eyono Fatai-Williams, disclosed that from 1999 to 2019 the company paid dividends of over $18 billion to Nigeria through the NNPCL from 2004 to 2020. She also revealed that the NLNG paid $9 billion tax to the federal government from 2011 to date while $15 billion had also been remitted for feed gas to the NNPC since the inception of the company.
Based on the disclosure, the Senate Committee on Public Accounts asked the suspended Accountant-General of the Federation, Mr. Ahmed Idris who was in attendance, to confirm if the said sum of $33 billion was actually remitted to the Nigeria National Petroleum Corporation Limited that represents the interest of Nigeria in the NLNG. Mr. Idris said that the funds paid by the NLNG were not remitted to the Federation Account but warehoused by the NNPCL.
Consequently, the Public Accounts Committee of the Senate directed the Accountant-General to determine how much was actually remitted to the Federation Account, and if there was any deduction by NNPC; how much was deducted and who authorized the deductions and the exchange rates applied for the amount that was remitted over the years under review.
Furthermore, on 29th March 2021, while speaking at the virtual Nigeria International Petroleum Summit (NIPS) 2021 Pre-Summit Conference and the official launch of the Decade of Gas in Abuja, former President Muhammadu Buhari disclosed that the Nigerian Liquefied Natural Gas Limited (NLNG) had generated $114 Billion in revenues over the years with $9 Billion in taxes remitted to the Federal Inland Revenue Service (FIRS). Apart from the tax remittance, the former President said that NLNG paid $18 Billion as dividends and $15 Billion in Feed Gas Purchases (FGP) to the Federal Government through the Nigerian National Petroleum Commission Limited (NNPC).
It may interest you to note that in 2020 and 2021, the NNPCL equally received the sums of $545.13m and $722.44m respectively as dividends from the NLNG. The total sum for the two years is $1.267 billion. From the information at our disposal, the said sum of $1.267 billion was not remitted to the Federation Account by the NNPCL. Therefore, the NNPCL is withholding a total sum of $34.2 billion from the Federation Account.
In the light of the foregoing, you will agree with us that the decision of the NNPCL to divert the said sum of $34.2 billion from the Federation is not backed by any law. We are compelled to request you to direct the NNPCL to remit the said sum of $34.2 billion to the Federation account as the said sum was received on behalf of the Government of Nigeria from the NLNG from 2004-2021.
However, if you fail to accede to our humble request, we shall not hesitate to initiate legal proceedings at the Federal High Court for the immediate recovery of the said sum of $34.2 billion from the NNPCL. We shall also pray the Court to direct the NLNG to remit dividends earned by Nigeria to the Federation Account forthwith.
While hoping that you will accede to our request, please accept the assurances of our highest esteem.
Yours Sincerely,
FEMI FALANA SAN, FCI Arb.
Dear readers, we really need your support to keep on serving you with authoritative, truthful, and juicy stories everyday. For your support, please reach out to the editor @gavelinternational66@gmail.com
