N20bn Bail-out Palaver: Affidavit Reveals why EFCC Withdrew Case against Kogi Govt; the Sterling Bank Connection

New documents have revealed the real reason the Economic and Financial Crimes Commission, EFCC, stepped down its case against Kogi State Government.

The documents from Sterling Bank, sighted by The Crest, revealed that the anti-graft agency may have beaten a hasty retreat to avoid being embarrassed in court over the allegations it slammed against the Kogi State Government, last August, accusing some top officials of the state of diverting a N20 billion salary bail-out fund.

The EFCC had, last August, accused top officials of the Kogi State Government of diverting the N20 billion bailout loan channeled through Sterling Bank and fixing same with the bank instead of using the funds for the purpose for which it was meant.

But the state’s Commissioner for Information, Kingsley Fanwo, had roundly rubbished the EFCC’s allegations, insisting that the funds were judiciously utilised as stipulated for salaries, wondering how funds that had been disbursed could be fixed at the same time.

However, despite its earlier claims that it had incontrovertible evidence to prove its case against the Kogi State Government, the anti-graft agency made a dramatic U-turn, mid-October, 2021, when it went to court to discontinue the case for the forfeiture of the alleged N20 billion it claimed was fixed in Sterling Bank.

New documents have emerged, shedding powerful light on why the EFCCmade the volte-face on the matter.

In a letter written by Sterling Bank to the Kogi State Commissioner for Finance, dated September 1, 2021, titled, RE: REQUEST FOR CLARIFICATION REGARDING CERTAIN ALLEGED TRANSACTIONS WITH YOUR BANK BY THE KOGI STATE GOVERNMENT BEING INVESTIGATED BY THE ECONOMIC AND FINANCIAL CRIMES COMMISSION (EFCC)“, the Bank said it was “surprised and dismayed at the media narration surrounding the transactions.”

Consequently, the bank sought leave of the EFCC to make its own submissions and respond appropriately.

In the referenced letter, Sterling Bank stated inter alia:

“The Kogi State government does not currently operate or maintain a fixed deposit account with Sterling Bank.

“There is no mandate letter from the Kogi State government to open account number 0073572696 with Sterling Bank.

“Sterling Bank account 0073572696 is an internal (mirror) account operated by the Bank for purposes of managing the Kogi State salary bailout facility.”

Another crucial evidence that seems to have completely changed the narrative was the affidavit deposed to by the Chief Compliance Officer of Sterling Bank, Muktadir Jaiyeola, with the Managing Director of the Bank as 2nd applicant, in a suit on the matter filed at a Federal High Court, sitting in Ikoyi, Lagos, on December 1, 2021.

The affidavit came upon repeated invitations by the Kogi State House of Assembly to the bank to clear the air on the allegations by the EFCC against the government.

Contrary to the claims of the EFCC, Sterling Bank, in the affidavit, sighted by this paper, indicated that the Kogi State Government did not fix any N20 billion with it. It also confirmed that the funds alleged to have been fixed were fully disbursed to several beneficiaries at the instance of the Kogi State Government.

In Paragraph 12 of the affidavit, the Bank said, “At the direction of the Kogi State Government, payments were made from Kogi State Government Salary Account to several beneficiaries between the 23rd July 2019 and 25th July 2019 and the entirety of the Kogi State Salary Bail out intervention fund in the sum of NGN20 Billion was fully disbursed at the instance of the Kogi State Government.”

Frowning at repeated invitations sent by the state House of Assembly to the Managing Director, asking him to appear in person, the Bank further exonerated the state government.

In Paragraph 23 of the affidavit, the Bank reiterated that there was nothing like a fixed deposit account opened by the Kogi State Government for the bailout fund as stated in its September 1, 2021 response letter to the state.

“There was no mandate to open the alleged fixed deposit account;

“The Kogi State Government did not operate a fixed deposit account;

“The account referred to as a fixed deposit account is an internal account operated for the purpose of managing the bail out facility,” Sterling Bank said.

Following the cold trail in the investigations into the alleged diversion of the bail-out fund, the state government, through the Commissioner for Finance, Mukadam Asiru Idris, in a letter dated 24th November, 2022, almost a year after an initial letter to the Central Bank of Nigeria, (CBN), reminded the apex bank to clear the air on the issue and make its investigations public. But it has reportedly not got any response till date.

Recall that on last Thursday, the Kogi State Government alerted the public that “the fresh media trial by the EFCC” was in continuation of the Commission’ resolve and agenda to “destroy Kogi” having met a brick-wall with its “bailout fund plot.”