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PEOPLE AND POLITICS BY MOHAMMED HARUNA
Jimoh Ibrahim, NICON and the Rule of Law
March 19, the Nigerian Tribune published an editorial titled “YAR’ADUA, NICON AND THE RULE OF LAW” which was a not-so-subtle criticism of President Umaru Yar’adua’s mantra about respect for the rule of law and due process. The subject of the editorial was the recent battle for the control of NICON Insurance Plc between Barrister Jimoh Ibrahim who became its core investor in 2005 following its privatization, and the Federal Government which reduced its share of the company from 100% to 30.
“It is,” said Tribune, “heart-warming to learn that President Umaru Yar’adua has ordered the return of the NICON Insurance Plc and the Nigerian Re-Insurance Plc to the status quo and insisted that the Federal Government and the core investor, Mr. Jimoh Ibrahim, should recommence the process of settling out of court. This is a most welcome development that will, at least, serve to correct the impression in some quarters that the Yar’adua administration’s romance with the rule of law and due process is that of convenience.”
The reason for this backhanded compliment was the Federal Government’s sack last November of Ibrahim as virtually the sole operator of the company. The National Insurance Commission (NAICOM), the country’s insurance regulator, had accused him and his board of mismanaging NICON’s assets and of breaking several insurance regulations such as would only undermine the interests of the company’s policy holders and its other shareholders, and possibly the entire insurance industry in general.
Naturally, Ibrahim took a dim view of NAICOM’s opinion and headed for the courts in apparent anticipation of any move to sack him or even to inquire into the company’s activities. In the end the courts answered his prayers.
The government, however, ignored the courts and went ahead to appoint an Interim Management Board to sort out his alleged mess. This apparently prompted much media criticisms of which Tribune’s editorial was only one. In turn these criticisms plus the thinly veiled support for Ibrahim from the Bureau of Public Enterprise (BPE), Federal Government’s privatization agency, and from the House of Representative Committee on Privatization which tried to broker a mutually amicable resolution of the quarrel, seemed to have persuaded the presidency to re-think the sacking of Ibrahim’ s board.
As a result, early last month, the Attorney-General of the Federation, Mr. Michael Aondoakaa (SAN), entered into an agreement with Ibrahim’s lawyers in principles to return both NICON Insurance Plc and Nigerian Re to him. This agreement was filed before a Federal High Court in Abuja for final endorsement on March 17. On that day, however, the Federal Government suddenly changed its mind. It needed more time, said its lawyers, to further examine the deal.
This last minute u-turn was prompted by objections to the Aondoakaa deal by the Ministry of Finance, NICON’s erstwhile sole shareholder and supervisory ministry. Its two ministers, Dr. Shamsudeen Usman and Mr. Remi Babalola, said their ministry was never consulted before the ministry of justice struck its tentative deal with Ibrahim’s lawyers.
This tug of war between the two ministries seems to have now landed President Yar’adua in a dilemma. Should he listen to his justice minister and obey the courts by returning NICON and Nigerian to Ibrahim or should he listen to his finance ministers who think it is unwise and wrong to do so because they have legitimate fears that Ibrahim had been taking the biggest insurance company in the country, and, by extension, the industry itself, down the road to perdition?
The president’s dilemma is, in my view, more apparent than real. Any dispassionate examination of the issue can only lead to the conclusion that Ibrahim has simply been trying to hide behind Yar’adua’s proclamation of respect for the rule of law to do as he pleased with NICON. This is simply not acceptable.
To begin with, his means of acquiring the company seems highly suspect. Already, there is evidence before the courts in a case brought against him by other members of the consortium that bought NICON, namely Assurance Acquisition Ltd (AAL), to suggest that a memo to BPE claiming that they had all resigned and given him sole ownership of the consortium was obtained through false pretences. In any case, members of the consortium, both corporate and individual, have denied his claim and have threatened to legally challenge any deal to return NICON to him.
Then there is the audit report of the global accounting firm, KPMG, about the company’s balance sheet as at November 21, 2007. In its damning report, the firm accused Ibrahim of using the company’s vast assets to feather his own nest. Specifically it accused him of mixing company funds with his own and of using the company’s well known name to set up his own private companies including NICON Properties Ltd, NICON Investment Ltd, NICON Airways and NICON Luxury and Services.
KPMG’s most damning indictment of Ibrahim was that the 7.66 billion Naira shareholders fund he declared as standing to the company’s credit as at November 21, 2007, contained at least 14 “errors” and “misstatements” totaling 14.24 billion Naira. Consequently, instead of the positive balance of the 7.66 billion Naira Ibrahim declared, the shareholders fund, said KPMG, was in the red to the tune of 6.58 billion Naira.
Ibrahim’s response to the KPMG report has been to declare it illegal since the board that appointed it was, as far as he was concerned, illegal. In an interview Thisday published in its March 22 edition, Ibrahim denied that KPMG contacted him for information on NICON. In any case, the information the accounting firm was looking for were, he said, “warehoused outside the offices of NICON for safe-keeping. We do not keep such documents within the company premises because they have to be safeguarded against loss or a fire outbreak. They are investments worth billions and have to be safeguarded in safe locations.”
In saying all this, it seems to have escaped Ibrahim that he merely gave the game away. If the headquarters of the biggest insurance company in Nigeria, if not in West Africa, was not safe for its own vital documents, where else could they be safe? And if the company cannot secure its own premises, why should anyone have confidence in its insurance policies?
Truth be told, Ibrahim did not respond to KPMG enquiries because he had no adequate explanations for their queries. Otherwise he would not have gone to great lengths, including heading for the courts, to keep the public, and even the press – until recently most newspapers routinely turned away even paid advertisements from Ibrahim’s opponents on the shaky grounds that they were libelous – from knowing the goings-on in the company.
All this – the fact that his acquisition of NICON is suspect and the credible charge that he has almost single-handedly mismanaged the company to the extent that he has become a threat to the integrity of the industry – is, however, not to say government was justified to have forcefully sacked him from the ownership of the company. The proper thing was to have appealed against the injunction the courts gave in his favour and to have looked for more legitimate ways to sack him.
But then all this is now academic as is obvious from Ibrahim’s own willingness to re-negotiate his ownership of NICON through his lawyers.
Government may have been wrong in sacking him without due process but in re-negotiating his ownership it is only right that it should seek cast-iron guarantees that he does not continue to hide under the principle of respect for the rule of law to operate the company as if it were his private piggy bank. Similarly, the original members of the AAL consortium that bought the company must be listened to for their own side of the story.
CORRECTION Last week I referred to a document on Fiscal Responsibility Bill authored by former Minister of Finance, Dr. Ngozi Okonjo-Iweala. I gave the date of the document as November 2008. This was an obvious mistake. The correct date is November 2004. The error is regretted.
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