Nigeria criminal inquiry on failed gas deal with Irish-backed firm
Collapsed deal has left the African nation with a $9bn legal judgment
President Muhammadu Buhari has ordered Nigeria’s economic and financial crimes commission, its national intelligence agency and the police to investigate the circumstances of the 2010 deal. Photograph: Ben Curtis/AP
The Nigerian government has ordered a criminal investigation into a failed gas deal between the state and a company founded by Irish investors, which has saddled the African nation with a $9 billion legal judgment.
Nigeria’s president, Muhammadu Buhari, has ordered his nation’s economic and financial crimes commission, its national intelligence agency and the police to investigate the circumstances of the 2010 deal with Process & Industrial Developments, founded by Irish investors Michael Quinn and Brendan Cahill.
Under the deal, P&ID was supposed to build a gas refinery in the southern Nigerian city of Calabar, while Nigeria was to supply the gas. The deal collapsed and the refinery was never built. P&ID subsequently brought the Nigerian government to a UK arbitration tribunal.
The tribunal awarded P&ID $6.6 billion for lost profits over the 20 years of the planned arrangement, although Nigeria disputed that the cash was owed. It accrues interest of 7 per cent, or about $1 million each day, until payment.
P&ID has sought to enforce the award in US and British courts and earlier this month a UK judge sided with the company, granting it permission to seize Nigerian assets to meet the award.
On Tuesday, the Nigerian government held a briefing attended by its finance minister, communications minister, justice minister and central bank governor. The $9 billion judgment potentially puts about a fifth of the nation’s foreign reserves at risk and has caused a national scandal in Nigeria, where the current government is blaming its predecessors for the contract with P&ID.
“The whole process was carried out by some vested interests in the past administration, which ...[inflicted] grave economic injury,” Lai Mohammed, the minister for information and communications, told the briefing.
He said the president has ordered a “full-scale criminal investigation” into the circumstances of the deal. He denied there was any “imminent threat” to Nigeria’s assets abroad, and confirmed that the state would appeal the award and seek a stay on its execution.
He urged local journalists to show a “sense of patriotism” in their reporting of the $9 billion judgment, which he said “is capable of threatening the very existence of the country”.
P&ID, which was incorporated in the British Virgin Islands by Mr Cahill and Mr Quinn, has vowed to press ahead with proceedings to seek the seizure of Nigerian assets. It had not responded to a request for comment sent through a website maintained on the company’s behalf.
P&ID is linked to a Dublin-based company, Industrial Consultants International (ICI), whose directors include Mr Cahill, a 71-year old business consultant. Mr Quinn, a former manager of Irish showbands, has passed away.
Bloomberg has reported that BVI company documents show a 25 per cent stake in P&ID has been purchased by US hedge-fund manager VR Capital Group. Hedge funds often buy interests in debts owed by sovereign states, and launch legal battles to get them to pay up.
P&ID has registered lobbyists to work for it in Washington, including Kobre & Kim, which also represented it in court, and DCI Group.
Mr Cahill and Mr Quinn have been involved in a range of Irish business over many decades, including Kent Steel, which had deals in the 1990s with ESB. Both men also were witnesses at the State’s planning tribunals, where Mr Quinn revealed their Dublin company, ICI, made payments to the late Fianna Fáil TD Liam Lawlor.