First Guarantee Pension Impasse: Why PenCom Struck


The saying that the first to invite the police or go to a court of law may not necessarily win a case appears to be playing out presently at the House of Representatives in a petition brought against the National Pension Commission (PenCom) by one Hon. George Ozodinobi and Chijioke Chuku on behalf of the First Guarantee Pensions Ltd, a Pensions Fund Administrator (PFA).

 Not only were the petitioners conspicuously absent, the revelations in the submissions by PenCom before the House Committee on Public petitions where the petition was committed are damning and eye-popping.

 The petitioners had accused the pension regulatory agency of persistently flouting court order, which they claimed reinstated Directors of the First Guarantee removed by PenCom. They further alleged lack of transparency and loss of market share by the PFA since its takeover by PenCom through an Interim Management Committee (IMC) in 2011.

Petitioners as Impostors

 However, PenCom, in 47-page submission by its Director-General (DG), Chinelo Anohu-Amazu, which denied any wrongdoing, insisted that in order to ensure the protection of pension funds and maintenance of sound pension administration system in Nigeria, Section 79(1) of the Pension Reform Act 2014 provides that “the Chief Executive Officer, Directors and Management Staff of a Pension Fund Administrator or Pension Fund Custodian shall not be appointed without the prior written approval of the Commission”.

 But PenCom said it had at no time granted approval for the appointment of Hon. George Ozodinobi and Secretary of Board of FGPL.

 “It is our submission that the signatories to the petition before the House Committee had misrepresented and misdirected the Honourable House of Representatives as regards their purported designations”, the Commission maintained.

Why We Struck

 The Commission told the House Committee that PenCom under the Leadership of its former Director-General (DG), M.K Ahmad, carried out various routine and special examinations on FGPL in 2007, 2008, 2009, 2010, and 2011, which revealed persistent infractions and unhealthy corporate governance practices allegedly perpetrated by Hon. Nze Chidi Duru, the Vice Chairman of the Board of FGPL at the time.

 It revealed: “As the Chairman of ‘Board Executive Committee’, Nze Duru diverted part of equity contribution of Novare Holdings (Pty) for purchase of a personal property in Lagos. The purchase was handled by the PFA’s (First Guarantee Pension Limited’s) outsourced Company Secretaries. Spurious and additional entitlements were paid to Nze Chidi Duru. There was Payment of unapproved consultancy service charges to Novare Holdings whose representatives were also paid as employees of the PFA with benefits, including 10 vacations to South Africa each year paid by the PFA”.

 It attached copy of the Offer of Employment to Mr. Derrick Roper who also was a Director in FGPL.

 “Pre-incorporation expenses of N40 million, beyond the N30 million approved limit, was claimed by Nze Duru and additional ‘sweat equities’ for his presumed efforts was converted as shares in the name of his companies, including BP Outsourcing Limited and Grand Towers Plc and without approvals”, the Commission further revealed.

PenCom said regulatory directives to the PFA regarding the findings were brazenly disregarded by Chidi Duru and cohorts. It cited the contract awards for software development and consultancy services, which it said were shrouded in secrecy and double invoiced payments.  There were also high volumes of Board-related expenses in favour of Nze Duru such as payment of over N10 million executive allowances for the ex-Member of House of Representatives alone, payment of his hotel bills, security bills, and refund of spurious ‘marketing expenses’.

 Moreover, fixed assets of the PFA such as 60KVA generating sets were purchased by the PFA, but Nze Duru spearhead a negative report as to their unfitness regarding the purpose for which they were bought and the equipment were subsequently diverted to Nze Duru’s business premises in Abuja and his private residence in Lagos.

 Supporting its claims with Search Report and Forms CAC 7 (Particulars of Directors) showing ownership of companies, the Commission alleged that multiple contracts were awarded to Nze Duru’s wife and companies and including Grand Towers Plc and BP Outsourcing Ltd, without Board approvals.

 PenCom said the March 2011 Special Examination of FGPL “indicted Nze Chidi Duru; his ally, Chief Orlando O. Ojo, the then Chairman of Board and Mr. Derrick Roper, representing the interest of Novare Holdings (Pty) Ltd of South Africa”.

 It explained: “Nze Duru effected instructions on staff and service providers of the PFA through these allies and terminated the employment of any employee who queried or did not effect instructions. Specifically, the PFA had four (4) Managing Directors within six-year time span. The PFA retained management staff whose appointments had been declined by PenCom on grounds of non-qualifications, including the direct siblings of Nze Duru and representatives of the South African investors”.

 “In view of the grave implications of the above infractions and in order to protect the pension assets (which at the that time was worth N42.2 billion being managed by the PFA on behalf of over 163,617 Retirement Savings Account (RSA) holders, PenCom summoned an all shareholders meeting where the infractions were revealed to the shock and annoyance of even the present Petitioner (Hon. Ozodinobi). After the shareholders’ meeting in May 2011, Nze Duru pleaded with the Commission for soft landing and it was agreed he should resign his position with immediate effect. Consequently, he tendered his resignation, which as attached as Annexure C to the House Committee. Shortly after, Nze Duru reneged and as typical, argued that the resignation did not hold water as he had no intention resigning and sued the Commission”.

 It said the above informed PenCom’s regulatory actions, including the removal of Nze Chidi Duru, Mr. Derick Roper, and Chief Orlando O. Ojo from the Board of the First Guarantee Pension Ltd (FGPL), pursuant to the provisions of Section 88 (2) of the PRA 2004. An Interim Management Committee (IMC) was subsequently constituted pursuant to Sections 20(i) and 21(j) of the same Act to run the PFA pending the reconstitution of the Board of the PFA.

No Disobedience to Court Orders by PenCom

 The Commission has further refuted before the House Committee the allegation that it had been in constant disobedience to court orders and directives of the Minister of Justice/Attorney-General of the Federation, describing it as “a gross misrepresentation of facts”, insisting that the “Commission has consistently respected court orders and always ensured the maintenance of the status quo in FGPL in line with the order of court”.

 “The Committee may wish to note that the execution of decision of the Federal High Court on the enforcement of the fundamental rights of Derrick Roper and Novares Holdings (Pty) Ltd had been stayed pending the appeal against that decision entered by both the Commission and Honourable Attorney-General of the Federation/Minister of justice. The appeal is pending before the Court of Appeal, Abuja Division in CA/A/428/2012”, PenCom added.

 It also said that following a brief by the Commission to the Attorney-General of the Federation in 2011, on allegations raised by the South African solicitors to Novare Holdings (Pty) Ltd, the Attorney-General of the Federation issued a directive to the EFCC to investigate the criminal allegations raised against Chidi Duru, the removed Vice Chairman of FGPL.

 Attaching a copy of letter of the Attorney-General dated 15th September 2011 referring the allegations of financial impropriety by Nze Chidi Duru to the EFCC for investigation, the Commission told the House Committee that “similar investigation was undertaken by the Nigeria Police who filed a First Information Report and subsequently charged him to the Magistrate Court, Wuse Abuja”.

 Plethora of Court Cases

 Mr. Roper instituted Suit No. FHC/ABJ/CS/709/2011 in Derrick Roper & Novare Holdings Pty vs PenCom, FGPL & AGF, alleging he was not heard before the order removing him was issued by the Commission. However, it emerged that the Commission wrote and advised him of the findings against him in the examination conducted on the PFA. Roper also sent a team of lawyers to represent him at meeting he was invited to at PenCom.

 Although Justice D.U Okorowo, sitting as a Vacation Judge, had granted an Interim Order of injunction restraining PenCom from interfering with Roper’s rights, the order was only served after his removal. Besides, Hon. Justice G.O Kolawole subsequently granted an order of stay of execution of judgment and the appeal was entered at the Court of Appeal in CA/A/428/2012- PenCom vs Derrick Roper & Ors.

 “In addition to PenCom’s appeal, the PFA, FGPL and the Attorney-General of the Federation filed separate appeals against the decision of Justice Okorowo; all appeals had been consolidated by the Court of Appeal, Abuja Division and the Appeal fixed for hearing on 15 June, 2016”, it added.

 There is also the FGPL v National Pension Commission & Attorney-General of the Federation (Appeal No. CA/L/16/2012) in which Chief Orlando Ojo and Nze Chidi Duru sued the Commission in the name of the PFA challenging the regulatory intervention of the Commission. But the Court of Appeal held that Babajide Akinjide Koku (SAN) lacked the authority to institute an appeal on behalf of FGPL on the authority of the removed directors.

 It was also revealed that in Appeal No CA/L/17/2011- Chief O.O. Ojo & Nze Chidi Duru vs PenCom & AGF, the removed Directors challenged the order made by Justice O.E Abang striking out their application for judicial review of PenCom’s decision to remove them as Directors of FGPL in Suit No. FHC/L/CS/1036/2011. But the Court of Appeal again dismissed their appeal. Duru and Ojo have filed a Notice of Appeal at the Supreme Court dated 1 July 2013 and the case is before the apex court.

 There are several other legal tussles relating to FGPL, including Nze Chidi Duru, Ugochukwu Duru and Joan Mbachu (nee Duru) vs The Nigeria Police Force & Inspector General of Police in which Chidi Duru seeks to restrain the Police from prosecuting him and his siblings for their alleged financial crimes against the FGPL, including opening secret account in a commercial bank where brokerage commissions on investments were diverted. However, the bottom line, from PenCom’s submission is that “there was no time the Commission was found to have disregarded the orders of a court of law on issue of FGPL”.

 PenCom also said every effort made to broker peace among FGPL’s shareholders have yielded no result.

Loss of market share

 On the allegation of loss of market share by FGPL by the petitioners, PenCom averred that the PFA had recorded steady growth during the period of the Commission’s regulatory intervention and that it could not share dividends due to ongoing litigations.

 A summary of Account sheet attached by the Commission showed that while the PFA recorded a loss of N422,958,000 as at August 2011 when PenCom took over, the PFA had recorded a profit of N1,922,390,000 as at April 2016.

 The value of the Retirement Savings Accounts (RSAs) Fund under PenCom’s management of the PFA within this period has grown from N32.7 Billion to N93.9 Billion. The book balance of the pension fund, which was N42.1 Billion as at August 2011, has risen by N115.2 Billion. The price of the RSA Fund and Retiree Fund experienced 58% and 68% growth, respectively. The PFA had, within the same period attracted significant legacy funds of Dangote Cement, Emenite, and Jigawa State Staff Pension Fund.

 “It is, therefore, apparent that the allegation of under-performance or loss of market share by the PFA is incorrect”, the PenCom said.

 No respite for Duru

 Meanwhile, as the House Committee prepares report of the hearing in which the petitioners failed to show up to substantiate their petitions, Nze Chidi Duru is still battling with the EFCC.

Shareholders led by Alhaji Kashim Imam had petitioned the EFCC accusing Hon. Chidi Duru of forging an Ordinary Resolution of First of FGPL around 2ndJune 2008, with the intent to defraud the company and shareholders.Consequently, operatives of the anti-graft agency arrested Hon. Duru in 2011.

He was, however, released on bail with one Mrs. Chinyere Christie Ekweonu, presently Director of Law Reporting, Federal Ministry of Justice standing as his surety. But his failure to honour EFCC’s several invitations and the new helmsman’s efforts to bring all pension offenders to book, resulted in the arrest and detention of Mrs. Ekweonu on 11th May 2016. She was released after several days.

As the drama unfolds, the good news is that while all these are going on, pension assets of the First Guarantee Pension Ltd in the care of PenCom’s IMC remains intact.