Fed Govt to stop $418m Paris Club refund payment

The Federal Government has taken steps to prevent the redemption of around 62 promissory notes issued to consultants/contractors hired by the Nigeria Governors’ Forum (NGF) and the Association of Local Governments of Nigeria (ALGON) to recover their Paris Club refunds.
While criticising the mechanism for issuing the promissory notes, the Federal Government has asked a Federal High Court in Abuja to annul the notes that have already been issued.

The Federal Government and three other plaintiffs in the case, which is now before Justice Inyang Ekwo, want the court to, among other things, set aside all of the promissory notes and issue a perpetual injunction prohibiting the defendants and their agents from “exercising any proprietary rights” over the promissory notes.

FSDH Merchant Bank Limited, Ned Munir Nwoko, Gregory Nangor Lar, Riok Nigeria Limited, Prince Orji Nwafor Orizu, Olaitan Bello, Dr. Ted Iseghohi Edwards, and Panic Alert Security System Limited are named as defendants in the claim.

The complaint also names the Attorney General of the Federation, the Minister of Finance, Budget, and National Planning, and the Accountant General of the Federation as plaintiffs.

The 62 promissory notes, valued at $418,953,668, were issued to the defendants on September 27, 2021 by the Debt Management Office (DMO) in response to judgements and orders of mandamus obtained by the defendants, who were said to have been engaged by the Federal Government and ALGON.

The plaintiffs argue, among other things, that the promissory notes are unlawful because they were issued incorrectly and in breach of applicable legislation.

They went on to say that, despite the fact that the promissory notes were signed by the then-Minister of Finance, Budget, and National Planning and the Director General of the DMO, they were not signed as needed.

The plaintiffs contended that “the promissory notes in issue were incorrectly and unlawfully changed on the assets and revenues of the federation rather than the assets and revenues of the states and local governments, who incurred the applicable loans/debts.”

Mr. Oyinlade Koleosho, a Principal State Counsel in the Federal Ministry of Justice, declared in a supporting affidavit that the promissory notes were wrongfully and invalidly issued against the federation’s assets.

Sections 314 and 317 of the Constitution, according to the lawyer, have separated the assets of a state or local government from the assets of the federation or the Federal Government of Nigeria.

Koleosho further stated that the 62 promissory notes issued to the defendants are null and void since they were charged against the assets of the Fed Govt, which is not owed by any of the defendants (contractors/consultants).

The plaintiffs also alleged that the Federal Government of Nigeria did not engage any of the defendants, claiming that the promissory notes provided to them (defendants) lacked legal consideration.

According to court documents, FSDH Merchant Bank Limited was granted ten promissory notes totaling $67,925,661.00 at a rate of $6,499,561.00 each note (ostensibly for the benefit of Nwoko).

Gregory Nangor Lar, Nwoko’s representative, was granted two promissory notes “for the account/benefit of the second defendant (Nwoko) in the amount of $732,511.00 at the rate of $366,256.00 per note.”

Riok Nigeria Limited received ten Federal Government of Nigeria promissory notes totaling $142,028, 941.00, at a rate of $14,202,895.00 per note.

Prince Orji Nwafor Orizu received ten promissory notes totaling $1,219,440.00 at a rate of $121,944.00 each promissory note.

Olaitan Bello is claimed to have received eight promissory notes totaling $215,195.00 at a rate of $21,524.00 per promissory note.

Dr. Ted Iseghohi Edwards is claimed to have received ten promissory notes totaling $159,000,000.00, each worth $15,900,000.00.

Panic Alert Security System Limited was also granted ten promissory notes with a total value of $47,831,920.00, with a value of $4,783,192.00 each note.

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