Account for N10 billion spent on failed NIPOST subsidiaries, Reps tell BPE

The House of Representatives has directed the Bureau for Public Enterprise (BPE) to account for about N10 billion expended on the failed subsidiaries of the Nigeria Postal Service (NIPOST).

Bamidele Salam, Chairman, House Committee on Public Accounts, made the call on Monday in Abuja at the resumed investigative hearing of the committee.
“No reasonable Nigerian will believe that N10.4 billion was spent to register the two companies.
”These companies eventually folded up one year after takeoff,” he said.

This came months after the Senate ordered the recovery of the N10 billion released to NIPOST to kick-start the two subsidiaries.
The Senate subsequently ordered the winding up of the subsidiaries.
In April, the Corporate Affairs Commission (CAC) invalidated the two subsidiaries on allegations of irregular practices.

Mr Salama said the companies NIPOST Transport and Logistics Ltd. and NIPOST Property reportedly took off in May 2023 and folded up through a Presidential directive in May 2024.

Imam Rilwan, the BPE Head of Finance and Accounts who stood in for the Director-General of the Agency Ayodeji Gbeleyi, told the House committee on Monday that of the said amount, N10 million was given to the two companies for their take off.
He said that about N400 million was given to the BPE to prepare the ground for the takeoff of the companies.
He said the issue of registering the two companies for NIPOST was approved in 2017.
This, he said, paved the way for BPE to expend about N423 million in registering and carrying out other activities for the eventual takeoff of the companies.
He said when the money was eventually released in 2023 the bureau had to recover its money, adding that the N423 million given to the BPE was used to rent office accommodation among other essential services.
He said while the bureau paid rent for the two companies from 2022, the companies took possession of the offices in May 2023, while they folded up in May 2024.
He said all property belonging to the two companies had been officially handed over to NIPOST management.
Responding, Mr Salam said spending money from the government coffers before the money was released was a violation of the provisions of the Public Procurement Act.
Mr Salam, however, directed the Director-General of BPE, Ayodeji Gbeleyi, to personally appear before the committee on 11 September at noon with all relevant documents relating to the transaction.

Background

PREMIUM TIMES reported that in 2021, the federal government unveiled plans to restructure the NIPOST by dividing it into three separate and sustainable subsidiary companies: a property company, a microfinance bank, and a transport and logistics company.

Subsequently, in May 2023, the Ministry of Finance disbursed N10 billion as initial capital to kick-start the restructuring programme.

A Government Integrated Financial Management System document obtained from the Office of the Accountant General of the Federation gave the breakdown of funds allocation.

It showed that the Nigeria Postal Service (NIPOST) received N600 million, NIPOST Transport & Logistics Services Ltd received N5.5 billion, NIPOST Properties & Development Company Ltd received N3.5 billion, and a contingency fund for the Bureau of Public Enterprises received N400 million.

However, trouble began when it was revealed that the primary shareholders in these government entities were individuals.

Upon examining the records of CAC incorporated entities as of 8 November 2023, it was discovered that certain individuals, including Alex Okoh, the Director-General of BPE, and Alex Adeyemi, a deputy director in the Office of the Accountant General of the Federation (OAGF), possessed ownership rights to one million shares each in these entities.

Also, Yahaya Maimuna, the Chairperson of the NIPOST Board of Directors, was identified as holding a significant controlling interest in the subsidiaries, with a total of eight million shares.

Seeing this, the Senate of the National Assembly Resolution No 54 of 30 December 2023, asked the relevant anti-graft agencies to probe the subsidiaries accordingly.

It also asked for the recovery of the N10 billion.

In January, the Senate asked the Corporste Affairs Commission (CAC) to immediately wind up and deregister the subsidiaries for allegedly being created illegally by the BPE.

Winding-up

In April, based on the Senate resolution, the CAC invalidated the incorporation certificates of two NIPOS subsidiaries due to irregular procurement practices.

It added that they were created through improper procurement methods, leading to the revocation of their certificates.
“The general public is hereby informed that the Commission, sequel to its powers contained in Section 41 (7) of the Companies and Allied Matters Act No. 3 of 2020, revoked the Certificates of incorporation of the below-mentioned companies because the same was improperly procured.
“These companies are NIPOST Transport and Logistics Services Company Ltd RC 1673881 and NIPOST Properties & Development Company Ltd RC 1673971.
“By virtue of these revocations, the Companies are deemed to be dissolved and their assets and liabilities transferred to the Nigeria Postal Service under the Nigerian Postal Services Act Cap N127 LFN 2004,” the CAC notice read.

Before the revocation of its incorporation certificates, the operational status of these entities was inactive, and they had no physical presence.

(NAN)