FMBN Enmeshes In N14.2bn Fraud

FMBN Enmeshes In N14.2bn Fraud
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Abdul Lateef Taiwo

The Senate Committee on Public Accounts has reprimanded the Federal Mortgage Bank of Nigeria, FMBN, for spending N14.2 billion on unexecuted 963 units of houses.

The Senator Matthew Urhoghide-led panel was reacting to the 2018 report of the Auditor General of the Federation (AuGF), which alleged that though N14.

2 billion was paid for the N10 billion contract no tangible work was done on the project before its abandonment.

The committee said it had insisted that the money be recovered and appropriate punishment meted out to offenders.

The AuGF’s query, obtained by AljazirahNigeria, showed that the contract sum for the scheme was overpaid by N4.2 billion, with the full N14.2 billion disbursed to the contractor between November 22, 2012, and April 29, 2013, adding that the overpayment notwithstanding, less than 10 percent of work was done before the project was eventually abandoned.

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The report read: “Audit observed that the bank awarded a contract for the construction of 963 units of residential buildings called Legacy Estate, with all the facilities and services of a modern urban setting at a contract price of N10,000,000,000.00. However, a total of N14,281,749,370.71 was disbursed to the contractor between November 22, 2012 and April 29, 2013, thereby resulting in an overpayment of N 4,281,749,370.71.

“No reason was provided for the additional payment, neither was any evidence of contract variation presented for audit. Audit further observed, from physical inspection of the site on July 7, 2017, that the project had been abandoned since 2014, some months after payments were made, with less than 10 percent of work done.

“Yet, the bank did not only pay the full contract sum, the contractor was overpaid to the tune of N 4,281,749,370.71, without any justification for the over-payment.”

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In his response that was equally seen, FMBN’s Managing Director, Ahmed Musa Dangiwa, explained: “The contract has been investigated by the present management in an effort to recover the bank’s fund, as all stakeholders were consulted to assist in investigation and recovery.

“Our report has been sent to the Minister of Works, Power, and Housing, as well as the board, which later directed us to send it to the Department of State Services, DSS, Economic and Financial Crimes Commission, EFCC, Independent Corrupt Practices and other Related Offences Commission, ICPC, and the Special Presidential Investigation Panel for Recovery of Public Property, SPIP.”

He continued: “The EFCC and ICPC were to assist in investigating the loss of funds on the Goodluck Jonathan Legacy Estate project to enable the FMBN to recover its money.

“The then SPIP was also to investigate and recover the sum of N11 billion from the developer, Messr. Good Earth Power Nigeria Limited.

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“Nord Consult was engaged to file an action for the recovery of the fund guaranteed by GTBank on the advance payment guarantee is issued, for which the bank appointed Intel Cost Associate Limited to carry out the current valuation of the project in order to serve as an expert witness in the suit filed against GTBank.”

“This management also initiated a valuation of the development on-site by an external consultant and the total work done, comprising housing units and infrastructure work valued at N940 million.


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