EXCLUSIVE: Ex-Benue Governor, Gabriel Suswam, in fresh ‘N5 billion fraud scandal’

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A former governor of Benue State, Gabriel Suswam, is in fresh trouble. Authorities in his state are accusing him of mismanaging a hefty N4.95 billion raised through a bond placement few months before the end of his tenure.

Governor Suswam
Governor Suswam

The former governor is alleged to have misled corporate organisations and regulators to enable his administration siphon the funds.

Mr. Suswam had claimed that the funds would be used to finance some key infrastructural projects in the state. But the new administration in the state is now saying some of the projects listed were long completed and paid for.

While the then governor was telling institutions that facilitated the bond in March 2015 about the projects he planned to spend the billions on, authorities said some of the projects he listed were fully executed, paid for and commissioned between 2012 and 2013.

Mr. Suswam was recently freed by the State Security Service (SSS) after 70 days in detention for allegedly being in possession of car keys, guns, ammunition, 21 certificates of occupancy of landed properties, among other things found in cars parked at his Abuja residence.

The Benue State governor, Samuel Ortom, had said on Sunday that his government had uncovered a N4 billion bond fraud, allegedly perpetrated by the Suswam administration in connivance with a bank.

The governor made the revelation to journalists at an interdenominational service in Makurdi, the state capital, to mark his second year in office.

Mr. Ortom said the financial impropriety allegedly perpetrated by the Suswam administration had impoverished the northcentral state and that it was one of the reasons development of the state was slow and prompt payment of civil servants’ salaries could not be achieved.

The governor make the disclosure just as PREMIUM TIMES was reviewing documents on the matter and putting finishing touches to its investigation.

This newspaper found that just about three months to end of its tenure, the Suswam administration, which was in office between May 2007 and May 2015, floated a N4.95 billion bond to fund eight ongoing and new projects.

The projects were the construction of Oshigbudu-Obagaji 10 km Road; Oju-Obussu-Utonikan 51.48 Km Road; Taraku-Nako-Agada 61 kim Road; Up-grade/Rehabilitation of Daudu-Gbajimgba Road from rural raod; Construction of Wannunne-Ikpa-Igbo 36.73 Km Road; and Rehabilitation and Upgrading of Water Works at Makurdi, Otukpo and Katsina-Ala.

Others were rural electrification and rehabilitation of township roads.

The seven year (2015-2017) 16.5 per cent Fixed Rate Development Fund, also called BNS Bond II, issued by way of public offering, was approved by the Security and Exchange Commission (SEC) in March 2015.

According to the approval documents, “After deductions of the costs and expenses of the issue, which are estimated at N153,028,698 representing 3.0 per cent and the underwriting fees of N173,250,000, representing 3.50 per cent of the gross issue proceeds, the net proceeds amounting to N4,623,721302.50 will be utilised to fund the projects.”

The debt is to repaid within 84 months at N104million per month, deducted at source from the state’s federal allocations.

Subsidiaries of three banks – FBN Trustees Ltd, SKYE Trustees Ltd, and UBA Trustees Ltd – were appointed as joint trustees to manage the bond for the benefits of all parties.

Three separate accounts were also opened at the Makurdi branch of UBA Plc to receive the bond proceeds.

However, documents exclusively obtained by this newspaper suggested that some of the eight projects for which the bond was floated were completed and commissioned years before the bond was issued in 2015.

The revelation came via a letter written by the state government in response to request by the three trustees to the bond demanding the bank statement of the Bond Proceeds Account which the Project Monitoring Consultants laboured unsuccessfully to obtain.

The trustees had in a letter dated March 10, 2017 to the state government and addressed to the Commissioner of Finance, David Olofu and the Accountant General of the state, Kwagh-Har Asen, lamented the failure of the government to complete the projects for which the bond was issued.

They also regretted the inability of the Project Monitoring Consultants to obtain the bank statement of the Bond Proceeds Account.

The letter is entitled, “Benue State Government of Nigeria N4.95 billion 16.5% fixed rate bond (The Bond) – Review of Project Monitoring Consultant’s Q4 2016 Report” was signed by Adekunle Awojobi, Funmi Ekundayo and Tokunbo Ajayi for the three firms.

“We are in receipt of the Project Monitoring Consultant’s (“the Consultant”) report of the project financed with the proceeds of the above Bond issue for Q4 2016 (October-December 2016) (the “Report”), the letter said.

“In the Report, the Consultant indicated his inability to obtain the bank statement of the Bond Proceeds Account and that this occasioned difficulty to authenticate the source of finance of the projects.

“Kindly note also that the completion period stated in the Prospectus for all the projects are 12 months and 6 months, respectively. Nonetheless, the report shows that none of these projects have been completed till now.

“In view of the foregoing, we advised that you mandate the various contractors to expedite action on all the projects involved as they are already behind schedule.

“We also request that you kindly provide us with a copy of the bank statement of the Bond Proceeds Account for our immediate review and records.”

In their reply dated April 10, 2017, apart from furnishing the trustees with the bank statement of the Bond Proceeds Account as requested, Messrs. Olofu and Asen suggested the bond proceeds were not used for the purpose they were meant, and that they might have been mismanaged by the Suswam administration.

“We also wish to note that most of the projects purportedly financed from the Bond II proceeds as revealed by the report (Project Monitoring Consultant) were fully executed and commissioned in 2012 and 2013 though same contractors are still owed outstanding bills,” the letter with reference number S/TRY/717/VII/24, said.

They listed the projects as:

a) Otabi-Otukpo water works (fully paid)

b) Electrification Projects in Otukpo GSTS; Daula Community, Gwer; Awuna Village, G/West (fully paid); Daja Pottery, Makurdi and Tyamu, Makurdi (fully paid); GSTS Anyiin, Logo LGA; GSTS Garagbough; Anvambe Village, Bukuru LGA; Atsaga Anemba Village, Ushongo LGA (Owed 10% retention); Uavande-Javkyudan, Ushongo LGA; Hemben-Tahav, Bukuru LGA (owed 10% retention) and Ako village, Bukuru and

c) Construction of New K/Ala water works (fully paid).

The two government officials also informed the trustees that there were renewed efforts to complete the remaining ongoing projects, particularly the roads network construction.

They added, “We have also arranged to pay off the outstanding bills owed the contractors as contained in the consultant’s report even though from 2015-2016, there were no records of settlement of any particular contractors owed or engaged in these projects earmarked.”

The letter was copied to The Director General of SEC and The Managing Partners, Prime Juris.

Mr. Olofu did not respond to our inquiries.

When PREMIUM TIMES reached him on phone he said the line was faint and that he could not hear what this reporter was saying.

He did not reply to an SMS sent to him to speak on the matter.

Also, Mr. Suswam could not be reached as repeated calls to his mobile phone did not connect. He did not respond to an SMS sent to him by this reporter.

The former governor was recently released by the State Security Service after 70 days in detention.

The security agency had detained him in February on allegations that car keys, certificate of occupancy of landed properties were, among other things were found in his Abuja residence.

He had sued the security agency for N10 billion for violating his fundamental rights.
Mr. Suswam, a former member of the House of Representatives, and two others were in March this year accused of diverting N9.79 billion, which was meant for a police reform programme and Subsidy Reinvestment and Empowerment Programme, SURE-P.

The former governor, his former finance commissioner, Omodachi Oklobia, and the then accountant, Benue State Government House Administration, Janet Aluga, were also named as defendants in the charge, filed before the Federal High Court in Abuja.

Earlier this year, a six-count charge bordering on alleged N7.5 billion fraud was filed against the former governor by the office of the Inspector General of Police (IGP) at the Federal High Court, Abuja.

Messrs. Suswam and Oklobia are also standing trial for allegedly diverting about N3.1 billion belonging to the Benue State Government.

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