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N600 Million Loan To Federal Ministry Of Education: The Truth Professor Peter Okebukola Does Not Want Not Tell By Samuel Akinbode Agbaoye
I read the representation in ThisDay Newspaper that Prof. Peter Okebukola, the Executive Secretary of the National Universities Commission (NUC), who is due to leave office on 3rd August 2006, made concerning the N600 million loan he gave the Federal Ministry of Education (FME) in 2001 then under the stewardship of Prof. A.B. Borishade for the takeoff of the National Open University of Nigeria (NOUN). The main arguments of Prof. Okebukola against the accusations of ASUU that the stabilization fund for universities was abused were that: only the interest accrued from the fund was used for the loan and that the main fund is intact; and no financial irregularities were involved in the transactions and the President of the Federal Republic was aware of the loan. He concluded that that was all he would say on the matter for now and that he was confident that after he left office he would not be called to explain the matter.
In response to the representation by Prof. Peter Okebukola on the N600 million loan, I have decided to make this representation to set the records straight and to expose the weaknesses of the arguments put forward by Prof. Okebukola and to hold him and Prof. Borishade responsible and liable to answer queries and deserving to face prosecution for the transaction.
It all started with a letter Ref. No. HME/FME/1004/C.1/I/T/7 dated 17th September 2001 written by Prof. Borishade as Minister of Education to the President Obasanjo in which he requested for approval to purchase a 5 Storey Building located at Plot 245, 3rd Avenue, Cadastral Zone AO, Central Business District, Abuja for the takeoff of the National Open and Distance Learning/Open University, now called the National Open University of Nigeria (NOUN). This was less than two months after Prof. Peter Okebukola had assumed office as the Executive Secretary, NUC on 3rd August 2001. In the letter, Prof. Borishade indicated that the asking price was N600 million, but he had negotiated the price down to N550 million net of all taxes and excluding 5% agency fees and 5% legal fees. Prof. Borishade said that he had sourced the money and needed the approval of the President to make immediate payment to prevent loosing the building to other interested parties. The property was offered to the Ministry of Education by Messrs Onward Properties Ltd. of Suite 303 (Second Floor), Fabdal Plaza, Plot 2217, Constantine Street, Off Ladi Kwali Way, Wuse Zone 4, Abuja in a letter dated 13th September 2001 and signed by Johnson Ogunleye, Principal Partner. Then on 18th September 2001 a day after the letter seeking approval was written to the President by Prof. Borishade, he minuted on a copy of the letter instructing the Prof. Okebukola thus: “we have requested for Mr. President’s approval to purchase the property whose particulars are attached. He has indicated his approval on phone. Please make a draft to the agent – Onward Properties Ltd. The draft should include the agency fees and legal fees as per this letter. Please treat urgently.” Prof. Borishade followed his minuted instruction with a letter Ref. No. HME/FME/332/VOL.1/31 dated same day 18th September 2001 to the Executive Secretary, NUC requesting a loan of N600 million for the takeoff of the National Open University, specifically he said: “As part of the take-off activities, the National Open University requires acquisition of physical and infrastructural facilities. A sum of six hundred million naira (N600,000,000) is now required URGENTLY to service some of these needs. Please release this sum as loan to the Ministry to be repaid to NUC in due course”. Prof. Okebukola then minuted the letter to the Director, Finance and Administration, Mrs. A.E. Omole, now the Director, Finance and Administration and who has proceeded on terminal leave as she is due to retire in October 2006, thus: Please release a draft for N600m (six hundred million) to ONWARD PROPERTIES LTD. as per attached”. After the payment for the building and vide a letter Ref. No. HME/FME/332/Vol.1/32 dated 23rd January 2002, Prof. Borishade wrote to Prof. Okebukola indicating that the National Open University would takeoff later in the year and “Government has made provisions for the university in the year 2002 budget. As soon as the money is released by the Federal Ministry of Finance, the N600,000,000.00 (Six Hundred Million Naira Only) which was loaned from the National Universities Commission for some take-off activities of the National Open University would be refunded”.
In a letter to the Executive Secretary, NUC dated 16th February 2004, KPMG Audit (Chartered Accountants) forwarded the Draft Management Report on the Financial Statements for the Year Ended 31st December 2002. Part of the report made submission on the N600 million loan given to the Federal Ministry of Education for the purchase of the building for the National Open University as follows:
“1. The approval of the Federal Executive Council was not obtained before this purchase was made as it is above the authorized approval limit of N50.00 million for a Federal Ministry. Therefore, the source of recovery of the loan was not firmed up before it was granted.
2. This expenditure was not budgeted for in the year 2001 budget.
3. The approval of the President, Commander in Chief was said to have been obtained on the telephone by the Honorable Minister of Education. There was however no correspondence to confirm this.
4. Over two years later, the Federal Ministry of Education is yet to repay this money.”
The auditors further said that implications of the actions taken in the transactions were:
“1. Laid down financial regulations are not being followed as regards approval and disbursements of funds.
2. These funds were obtained from the stabilization fund instituted by government to guide against fluctuation in the level of funding of Nigerian universities. The non-repayment of this loan is depriving the Commission of the needed funds and interest that would have been earned if these funds have been invested in interest yielding assets.”
The auditors then recommended that:
“1. Representations should be made to the Federal Ministry of Education to refund this loan.
2. Financial regulations should be complied with before funds are withdrawn or loaned.”
The Senate and House Committees on Education have also intervened in the matter through a meeting that was held on 27th July 2004. Present at the meeting according to the minutes were: Senator A.A. Ibrahim, Chairman, Senate Committee on Education; Hon. Shehu Matazu, Chairman, House Committee on Education; Prof. O. Jegede, Vice-Chancellor, National Open University of Nigeria; Prof. A.B. Borishade, then Honorable Minister of State, Power and Steel; Prof. Peter Okebukola, Executive Secretary, NUC; and Prof. Fabian Osuji (via telephone), Honorable Minister of Education. The meeting confirmed that:
“1. Title documents for Plot 245 were actually transferred to Ministry of Education (photocopies were made available).
2. The NOUN presently occupies only one floor and the basement of the building.
3. The other floors are occupied by agencies of the Federal Ministry of Education and UNESCO.”
The meeting then resolved that:
“1. The Federal Ministry of Education should transfer all title documents in respect of this Plot 245 to NOUN within the next fourteen (14) days.
2. All parties to this matter namely: Federal Ministry of Education, NUC and NOUN are to meet after title documents have been transferred, to agree on modalities for repayment of the Six Hundred Million Naira (N600m) loan taken from NUC for the purchase of the property.
3. 2 additional floors to be released by the Ministry of Education to NOUN when they complete their movement to the new Secretariat building.”
Now to the issues that compel further explanations from Prof. Okebukola and Prof. Borishade on the N600 million loan from the universities stabilization fund given to FME by NUC:
1. Prof. Borishade in his letter to Mr. President said the cost of the building was N550 million net all taxes and excluding agency and legal fees of 5% each, only for him to ask NUC for N600 million. Arithmetic tells even a lay man that 10% agency and legal fees for N550 million is N55 million. 5% VAT and 5% withholding tax (if necessary) would amount to another N27.5 million (VAT only) or N55 million (VAT and withholding tax). This means that the cost of the building should have been N632.5 million or N660 million. Even if you ignored the tax issue the cost of the building should have been N605 million. Prof. Borishade only asked NUC for N600 million, so who paid the rest of either N5 million or N32.5 million or N60 million. If no other money was paid then it means that no tax was paid on this transaction and the agents had also forgiven N5 million. The letter to the President did not indicate the exact amount of money that should be approved by the President.
2. It is a known fact that agency and legal fees are negotiable, especially where the money involved is large. Why didn’t Prof. Borishade negotiate these fees as he seemed to have negotiated the cost of the building itself. What is legal fee any way? The Federal Government paid N27.5 million for someone to draft the agreement for the transfer of the title documents of a property it bought? What is the legal unit of the Federal Ministry doing that it cannot draft the agreement for government? Why is the government, who in this case is the buyer, paying the agency and legal fees and not the seller?
3. In his letter to the President, Prof. Borishade only mentioned that he had sourced the money, but he did not indicate the actually source to be used for funding the transaction, that is, the universities stabilization fund. In fact, the source of the money is not reflected in all the correspondences between the Minister and the Executive Secretary and between the Executive Secretary and Director, Finance and Supplies. The question is who authorized Prof. Okebukola to use the universities stabilization fund to finance the loan and how was the approval given.
4. Prof. Borishade did not seek any formal valuation of the property either by the Estate Unit in his Ministry or by the Federal Ministry of Housing and instead assumed the role of determining the value of the property himself by negotiating a N50 million reduction in price. It is required in public service that the Minister should have sought advice on the value of the property before paying to ensure that government was not being duped.
5. Prof. Borishade was in such a hurry to conclude the deal as a result of not wanting to loose the building to other interests that he concluded the process in a record one week. The letter from the agents was on Thursday 13th September 2001, he wrote to the President on Monday 17th September 2001 and instructed the release of the money on Tuesday 18th September 2001. This is in spite of the fact that the Minister could have presented a memo the Federal Executive Council meeting that took place a day after he issued instructions to NUC, that is, on Wednesday 19th September 2001. Why was Prof. Borishade in such a hurry to close the deal to the extent that he was ready and indeed broke financial regulations?
6. Why didn’t Prof. Borishade sample other agents and other buildings before settling on the one presented by Messrs Onward Properties Ltd.? The amount of money involved should have advised the Minister that there was a need to assess similar buildings.
7. How true is it that Mr. President would approve an expenditure of about N600 million on behalf of the Federal Executive Council on phone a day or two before the Council was due to meet? The truth is that Prof. Borishade is yet to produce documentary evidence of the approval given by the President for this transaction. This was the case as at February 2004 when the external auditors KPMG submitted their report and as at July 2004 the Senate and House Committees intervened and is still the case till today.
8. If there is no corroborating documentary evidence of the approval given by Mr. President for the purchase of the building, then Prof. Borishade had lied about such approval, except if Mr. President would confirm their telephone conversation.
9. Why did Prof. Borishade request the President to approve the purchase of a building and only for him to write Prof. Okebukola to give a loan for physical and infrastructural facilities and only for Prof. Okebukola on this letter instruct the release of money to the agent? The question is why didn’t the Minister tell the Executive Secretary, NUC in his letter that he had received the approval of the President to purchase the building and needed a loan of N600 million.
10. Why did the Minister after minuting instructions to Prof. Okebukola for the release of money to the agent on a copy of the letter to Mr. President needed to send a letter asking for a loan again both on the same day, 18th September 2001?
11. Why didn’t Prof. Okebukola, his Director of Finance and Supplies and the NUC Internal Audit question the authority of the Minister to issue instructions of such magnitude as the release of N600 million, when he lacked such authority. They should have insisted that they needed documentary evidence of approval for such a loan purportedly given by Mr. President. As professionals they should have known that.
12. Why is it that though Prof. Borishade had indicated that financial provision had been made for the takeoff of the NOUN in 2002 budget and funds were being expected from the Federal Ministry of Finance no money was returned to the NUC. In fact till today no money has been returned to NUC, five years after the loan.
13. Why is it that as at 2004 the title documents for the purchased building were still in the name of the Federal Ministry of Education instead of the NOUN? With the understanding reached at the meeting brokered by the educations committees of the National Assembly to the effect that the title documents be transferred to NOUN and a means of paying back the loan agreed, then the loan should have been paid by now. The fact that the loan has not been paid suggests that the title deed have not been transferred to NOUN.
14. Prof. Okebukola had at one of the parleys he had with staff sometime in 2003 when questioned by NUC staff opined that Prof. Jegede, Vice-Chancellor, NOUN had written to acknowledge the loan and had actually returned N100 million to NUC. The facts now on ground show that this was not true. The question is why Prof. Okebukola had to lie over the matter?
I could go on and on and on raising questions that beg answers on this matter. The simple truth is that Prof. Borishade and Prof. Okebukola had made personal gains on this deal and were eager to conclude it, even if it meant breaking the law. The question then is whether they would be punished for their crime? I had in a petition to the President and Commander-in-Chief dated 1st August 2005 raised the issue of the N600 million loan given by NUC to the FME hoping the President would react. I had supported my petition with documentary evidences, some of which I have quoted here. In this era of anti-corruption, EFCC and ICPC, I dare ask why no action has been taken against the principal actors in this deal? In conclusion, Prof. Peter Okebukola may wish to tell whatever lies he wants to cover his corrupt acts while in office, but with time the truth shall prevail and he shall, along with his masters and collaborators, be brought to justice. And I hope the records have been set straight. Finally, Prof. Okebukola is invited to refute the facts presented here in.
Deputy Director, NUC
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