Coalition Petitions EFCC, Demands Probe Of $25m Military Boats Deal

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The Civil Society Network Against Corruption (CSNAC) has petitioned the Economic and Financial Crimes Commission to probe a multi-million dollar contract scam allegedly awarded by the Federal Government to Shaldag, an Israeli ship-building firm, to supply two fast assault military boats to the Nigerian Navy.
The coalition of 150 anti-corruption network organisations, in a letter to the EFCC signed by Mr. Olanrewaju, the coalition’s chairman, alleged that “the Shaldag contract was one of the deals that paved the way for a regime of kleptocracy in the Nigerian Defence sector and the emergence of a gang that has grown to be one of the most powerful in the country.”
The group claimed in the petition that the total contract sum of the deal was a whopping $25 million, which was struck in 2010.
It said that the Israeli government was currently prosecuting the Defence contact fraud and that the Nigerian government and its security agencies cannot continue to pretend.
The group in its letter quoted an online newspaper’s report on May 16, 2018, as reporting that “the Israeli police arrested three senior officials of Israel Shipyard on charges of bribing government officials in Nigeria on Sunday, March 18, 2018.”
“The company’s Vice President for Marketing, Oded Breier, was one of the suspects arrested. The next day, Samy Katsav, another senior Israeli defence businessman, was questioned by police in connection with the same bribery case.
“Both Mr. Kastav and Mr. Breier were later released to house arrest, and parts of Israel Shipyards’ bank accounts frozen, Gold Bond Group, their parent company announced shortly after the event,” CSNAC said.
It added, “The arrests followed investigations by the Israeli police and tax authorities as well as other international financial crime-bursting organisations into a 2010 contract with the Nigerian government to supply two Shaldag-military boats.
“The Israeli police and tax authorities are confident the suspects won the contract after paying bribes to government officials in Nigeria, and as such the suspects have been charged.”
The anti-corruption network further said that the Defence Web, a leading defence news portal, confirmed the existence of the deal when it reported in 2012 that the Nigerian Navy is believed to be the buyer of three Shaldag fast patrol boats.
It said that the report revealed that Israel Shipyard had sold three Shaldag fast patrol boats to an African country, which is believed to be Nigeria as the West African country was in the midst of expanding its navy in order to combat maritime insecurity such as piracy and oil theft.
CSNAC said, “Israel Shipyards on July 17 said that it had agreed upon a deal for the sale of three Shaldag (Kingfisher) vessels for 80 million shekels (US$19 million). The Gold Bond Group, which owns 20 percent of the company, said it expected to make a profit of 16 million shekels (US$3.9 million) out of the deal.
“It was reported that the fast patrol boats would be delivered to an African country, which has already paid a deposit for them. This country is almost certainly Nigeria – its 2012 Defence Budget Proposal makes provision for three Shaldag Mk III fast-patrol craft, according to Budget Office documents.
“It is, however, surprising that the Nigerian government and its security agencies have been silent on the said monumental fraud, which is the reason for our indicating interest in same and bringing this to the attention of the commission.
“Experts believe the Shaldag contract is one of the deals that paved the way for a regime of kleptocracy in the Nigerian defence sector and the emergence of a gang that has grown to be one of the most powerful in the country.
“Their market value at the time was estimated to be $5 million each. Nigeria, therefore, lost $15 million in the deal. It is unclear how the $15 million excess was shared between everyone involved, but the Israeli police have established that the middleman, Amit Sade, received $1.47 million in what is now termed brokerage fee.
“Mr. Sade is believed to be one of the suspects arrested by the Israeli police. He was for a long time resident in Nigeria. But his latest whereabouts remain unknown.
“Mr. Sade remains wanted in Nigeria. As at last year, he was recommended for “further investigation” after a committee investigating defence equipment procurements between 2007 and 2015 found a number of irregularities in contracts for which his companies were paid public funds. Within this period, Mr. Sade’s companies, Doiyatec Comms Limited and DYI Global Services, won six major defence contracts valued at N6.7 billion. He also brokered many others, including the Shaldag deal.”
The CSNAC noted further that “according to a Transparency International report, Nigerian military chiefs, politicians, and contractors worked together to steal $15 billion through arms procurement contracts – including the Shaldags – between 2008 and 2017.
“Also, in July 2016, an investigative committee released a report that indicted 18 senior military officials, 12 retired and serving government officials, as well as 24 CEOs. The report suggested further investigation and prosecution of the indicted individuals.
“The Nigerian Defence Contracting gang which emerged in 2007 according to sources is said to involve a network of government guys, middlemen and manufacturers. The Government guys allegedly are made up of government officials leading various defence units and committees, the defence minister and permanent secretaries, Secretary to the Government of the Federation, the National Security Adviser, and the President. This gang makes up the most important node in the network,” the group said.