As Otti Invites EFCC to Abia

Following the submission of the KPMG forensic report by the Abia State government to the Economic and Financial Crimes Commission which revealed damning allegations against former Governor Okezie Ikpeazu, it is expected that the anti-graft agency will swing into action and do justice to the report, Wale Igbintade writes

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ll is now set for the Economic and Financial Crimes Commission (EFCC) to thoroughly investigate the allegations of financial fraud levelled against the former governor of Abia State, Okezie Ikpeazu, following the submission of the forensic audit report conducted by a renowned firm, KPMG Nigeria. 

The audit, commissioned by the incumbent Governor Alex Otti, covers the state government’s finances from May 29, 2015, to May 28, 2023.

The 359-page report, titled: ‘Final Report: Provision of Process Review Services,’ revealed that a total of N1.9 trillion was illegally taken away from the state treasury under the administration of the immediate past governor, Okezie Ikpeazu.

The report, according to Premium Times, showed that of the 35 licensed banks in Nigeria, the Abia State government maintained 78 bank accounts in 14 commercial banks in the country within the same period with a “net credit balance of N3,495,207, 127.14 as of May 28, 2023.”

According to the report, some of the funds taken or utilised without following due process included funds allocated to non-existent projects, loans released without stated purpose, legally released but non-utilised credit facilities, unremitted Internally-Generated Revenue (IGR) due to the state and illegal deductions from the IGR.

The alleged sum of N1.9 trillion taken or allocated without due process does not include values of assets and properties of the state government such as lands, which, according to the report, were allocated to various individuals illegally.

The report said the state government awarded a total of 560 contracts to 231 contractors during the period under review with a cumulative contract value of N294.8 billion, although there was insufficient information on the values of 40 of the contracts. It further revealed that N10 billion of the funds were paid to Ferotex on September 25, 2020, for the “Construction of Abia State Airport,” which never materialised.

Before the release of the audit report, Governor Otti and Ikpeazu were engaged in a war of words over the governor’s allegation that his predecessor diverted the N10 billion, which was earmarked for the construction of the airport in the state.

It all began on April 19, 2024, when Otti visited the Johns Hopkins School of Advanced International Studies in the United States, where he delivered a lecture on ‘State of Governance and Economic Transition: Meeting the Challenges.’  In his lecture, Otti accused Ikpeazu of allocating N10 billion to a non-existent airport project in the state, citing the forensic audit carried out by KPMG Nigeria. 

Almost simultaneously, a video clip, which showed the governor making the speech went viral on various social media platforms where he said: “Talking about corruption, I had set up a forensic audit as soon as I took over office in Abia, last year (2023). So that there won’t be any argument; I called in one of the top three audit firms in the world, and not too long ago, they turned in their report, and some of the things in their report are frightening,” Otti said.

“So, some N9.3 billion was paid to seven contractors for contracts that were not executed at all up till today. Another N15.9 billion was paid to 63 contractors with no supporting documents anywhere in the state. Another N12 billion was paid to two contractors for contracts that do not exist. Out of this figure N10 billion was on September 25, 2020, paid to some contractors for the construction of the Abia State Airport.

“We have spent time trying to locate the airport and up till now have not been able to locate it. So, as we continue to look for our airport, we have also involved the security agencies to help us search,” the governor stated.

While Otti in the video did not mention Ikpeazu’s name or his administration in the comment, the former governor was in power within the period the allocation of the funds allegedly took place.

Ikpeazu, in his first response, through his former information commissioner, John Kalu, denied the allegation, explaining that the N10 billion originally budgeted for the airport project was rechannelled into other projects following the approval of the then State Executive Council.

The former Abia governor, in another response via a video clip, said, just like his former commissioner, that the funds were rechanneled into road projects in the state after the airport project was suspended.

“Today, when people talk about money for the airport (project), I think they are questioning my decision to change my mind and I have right at that time as governor to say, ‘I don’t want this airport now,’” Ikpeazu said.

However, reacting to the audit report, in a statement by his former media aide, Michael Nwabueze, the ex-governor described the report as “misleading” and “more classically maliciously libellous.”

He said people need to know that in the eight years of his tenure as governor, the state did not earn up to N1 trillion from all sources, including federal allocations, internally Generated Revenue IGR) and grants.

Ikpeazu said Abia State under his watch earned a total of N630 billion, citing data from the Federal Account Allocation Committee (FAAC) and National Bureau of Statistics as reportedly published by Statisense. He queried how the N1.9 trillion could have been diverted under his administration, claiming the author of the story failed to do “diligent review” of the audit report.

The former governor also said the auditing firm “relied on documents supplied by Abia State Government and might not have seen other documents to the contrary.”

He stressed that, contrary to claims by Governor Otti, what the audit firm did was a process review and not a forensic audit.

On his part, Ikpeazu’s former Commissioner for Information, Kalu, stressed that what was carried out by the KPMG was financial process review only and not a forensic audit report. He said that the document also contains caveats, including the fact that there were documents they could not access at the time of the review.

The former commissioner said some claims in the report, such as the alleged award of contract without approval, raised questions.

“What KPMG did in that review was simply to lift off all documents they found wherever without checking to do the forensic side, which simply involves following the money trail. A proper forensic audit will follow the money trail to the last person who got any dime. If a contract was awarded without approval, as claimed, you also need to find out if the same contract was funded. Where there is funding, then you are wasting readers’ time with an attempt at witch-hunting,” Kalu added.

In his response, the state Commissioner for Information, Okey Kanu, said the state government had handed over a copy of the report to the EFCC for possible prosecution.

“From all indications, some of the persons who were mentioned in that report have been invited for questioning. So, it is after further investigations or questioning by the anti-graft agency (to determine) if these persons are actually found guilty of any form of financial malfeasance, then they will be prosecuted by the EFCC,” Kanu said.

The information commissioner said the EFCC commended Governor Otti for ordering the conduct of the audit and that the report has made their (EFCC) job easier.

Indeed, Otti should be commended for handing over the investigation to a neutral, independent, and professional audit firm instead of politicising it by setting his own probe committee or inducing the state lawmakers to set up an adhoc committee to probe Ikpeazu.

From Kanu’s comments, it is clear that the ball is now in the court of the EFCC to do needful by carefully examining the audit report and charging those found wanting to court with delay.

If Ikpeazu is invited to appear at the commission, he would join his predecessors – Orji Uzor Kalu, Theodore Orji – who got similar invites over misappropriation of funds. While Kalu was arraigned, tried, convicted, and later freed by the Supreme Court, nothing was heard on the outcome of Orji’s invitation.