Priti Patel repeatedly backed company accused of obtaining Nigerian gas contract through corruption

Home secretary sought to intervene in on behalf of firm in dispute with Nigerian government

Solomon Hughes,Kim Sengupta
Friday 20 November 2020 23:17 GMT
Priti Patel is already embroiled in a political row over bullying of civil servants
Priti Patel is already embroiled in a political row over bullying of civil servants (AFP/Getty)

Priti Patel sought to publicly intervene three times on behalf of an offshore company which has been accused in a British court of obtaining a £100m contract from the Nigerian government through corruption.

She repeatedly backed the company, Process & Industrial Development (P&ID), a British Virgin Islands-registered gas company, in its long legal dispute with the Nigerian government over a gas processing plant.

The home secretary is currently in the centre of a political storm after being accused of bullying staff in her department. She faces calls to resign after an investigation concluded that she had breached the ministerial code of conduct, although it also found her actions may have been “unintentional”.

Ms Patel’s intervention in the court case took place before she was appointed home secretary by Boris Johnson. She was joined in supporting the company by Shanker Singham, a prominent fellow Brexit advocate, who is now a government trade adviser, in the bitterly contested legal action.

The case had been an issue of huge public interest in Nigeria with accusations of bribery and collusion between public officials and private concerns. President Muhammadu Buhari raised the matter during a speech at the United Nations General Assembly in September. “The present Nigerian government is facing the challenges of corruption head on,” he said. “We are giving notice to international criminal groups by the vigorous prosecution of the P&ID scam attempting to cheat Nigeria out of billions of dollars.”

P&ID had an agreement with Nigeria to build a massive plant to process natural gas. No work, however, was carried out on the plant. The company blamed the government for not supplying the gas; the government claims the contract was part of a fraudulent scheme.

P&ID had won compensation of $10bn over the failed deal. But the Nigerian government are appealing against the judgment, claiming that massive bribes had been paid to secure the contract.

P&ID denies any wrongdoing and holds that the Nigerian government had invented the corruption allegations in an effort to avoid paying compensation and to delay the seizure of assets.

In September, a judge in London granted the Nigerian government the right to appeal. He ruled that “Nigeria has established a strong prima facie case” that the contract was “procured by bribes paid to insiders as part of a larger scheme to defraud Nigeria”.  Sitting in the High Court earlier this month, Sir Ross Cranston added that there is “also a strong prima facie case” that one of the firm’s directors, and a main witness in the court case “gave perjured evidence”.  

The Nigerian government had a separate ruling in their favour when the court ordered the release of £200m it had put in place as security while the appeal is being heard. Judge Cranston had rejected the request by P&ID to increase the security level to £400m.

Ms Patel first publicly supported P&ID in an article for the newspaper City AM in November 2018, saying that Nigeria “must honour its obligations to companies like P&ID” and pay the firm “almost $9bn” (as the sum in legal action was at that stage).  She condemned the further legal action by the Nigerian government as a “running scandal”, “obstinate”, and “flouting international law and convention”.

In May last year, Ms Patel wrote an introduction to a pamphlet by Shanker Singham which also backed P&ID against Nigeria. The pamphlet had been produced by a consultancy firm run by Mr Singham, called Competere.

The same month Ms Patel co-wrote an article in the Daily Telegraph newspaper with Mr Singham about post-Brexit aid and trade, offering support once again for P&ID, and an apparent warning to Nigeria on the consequences for its alleged failure to adhere to laws.

The article said: “The erosion of Nigeria’s commitment to the rule of law is highly worrying. Currently, Nigeria is a defendant in multiple investor disputes, including with telecoms firm MTN; an energy project with P&ID; and a hydroelectric contract with Sunrise Power. In the P&ID case, Nigeria owes the company over $9bn, due to Nigeria’s failure to honour a gas supply contract.”

It continued: “The UK’s national interest is best-served by an open system that encourages free trade, protects property rights, and upholds the rule of law. Our development strategy and our independent trade policy post-Brexit can be harnessed to ensure maximum value for the British taxpayer.”

There were already recurring allegations of corruption in Nigeria over the deal when Ms Patel and Mr Singham expressed their support for P&ID in the second article.  

The day before the Telegraph article appeared there was an interview with Brendan Cahill, from Ireland, one of the co-founders of P&ID, in a Nigerian newspaper during which he was asked “there has been a persistent claim that P&ID is a ‘fake’ company that made a ‘fraudulent arrangement’ with some persons in Nigeria. How do you react to this claim?”

Mr Cahill replied: “We are well aware of the government’s efforts to characterise P&ID, and its founders, as frauds. This is absolutely false. The arbitrators in London spent five years carefully reviewing the written agreement and all the facts surrounding the deal, and in the end they unanimously concluded that Nigeria was to blame for the deal’s collapse and had to pay damages to P&ID.”

The Nigerian government alleges that P&ID paid more than $390,000 (almost £303,000) in bribes to secure the contract. The country’s attorney general, Abubakar Malami, submitted a witness statement to the Property Courts of England and Wales, High Courts of Justice in January this year.  

Mr Malami, in his statement, alleges that P&ID indirectly paid more than $300,000 (£225, 850) to a company linked to an official who reviewed the contract. It also alleges two P&ID executives dropped a duffel bag packed with $50,000 in the trunk of his car in the capital, Abuja, in April 2009.  

Grace Taiga, a former petroleum ministry lawyer in Nigeria who oversaw a contract review committee, has also been charged with accepting bribes from P&ID-linked companies between 2015 and 2019. Ms Taiga was scheduled to retire in September 2010, say investigators, but she remained in her position for another 16 months as the P&ID contract was being finalised.

Ms Taiga has pleaded not guilty to the charges.

Ms Patel and Mr Singham did not respond to questions about their public support for P&ID and whether they were aware of the corruption allegations.

P&ID did not respond to questions about the legal action or why Ms Patel and Mr Singham was supporting them, or what their working relationship was with Ms Patel and Mr Singham.

The company said previously: “The economic cost to Nigeria of fighting and losing this case is substantial. Nigeria, which emerged from recession in 2017, approved a three-year plan in 2016 to borrow more from abroad. 

“The government wants 40 per cent of its loans to come from offshore to lower borrowing costs and help to fund its record-high budgets. In addition, the Buhari administration continues to incur costs in fighting this battle in the UK and US courts, and due to its failure to comply with court procedures, has been forced to pay some costs of P&ID’s counsel.

“The re-elected Buhari administration must come to terms with the award and decide whether to continue with delaying tactics to postpone the inevitable, or if the new government has the courage to atone for its previous mistakes and reach a settlement that will allow the country to move forward.”

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