The Nigeria Police Force (NPF) has implicated Sterling Bank in a significant $122 million fraud and money laundering operation linked to a contentious loan provided to Miden Systems Limited, an oil and gas company based in Lagos.
According to a police report released on Tuesday, April 29, Sterling Bank approved a $30 million loan in 2012 to Miden Systems for a project with Shell Petroleum Development Company of Nigeria (SPDC).
The report stated that, “It is apparent that Sterling Bank has not produced evidence to debunk the allegations of Miden Systems Limited.
“Evidence corroborates alleged offences of financial mismanagement, fraudulent debits, misappropriation of funds, stealing and money laundering.”
Tensions arose when Miden Systems accused the bank of mishandling over $122 million that Shell had deposited into the company’s account as payment for services rendered.
Shell believed that the bank had acted dishonestly and as a result, submitted a petition to the House of Representatives Committee on Public Petitions, claiming fraudulent and improper management of funds from its loan accounts.
The Committee referred the petition to the Inspector General of Police (IGP), Kayode Egbetokun for investigation.
The police report revealed that Miden Systems held four accounts at Sterling Bank; two in naira and two in United States (US) dollars, and all funds from the Shell project were deposited in those accounts.
Adding that, “That Sterling Bank manages two Debt Services Repayment Account (DSRA) Account Nos 0021992868 USD CURRENT and 0021992837 NGN CURRENT for Maiden Systems Limited (Ltd.)
“That on 29/08/2016 the sum of $1,200,000 was debuted from the company’s account number 0014851716 as transfer out Red: FT16242QSSQN1 to no particular account and the account officer Lekan Olakunle stated that it is being reviewed for proper feedback (which was not provided for over a month).
“That on 27/09/206 the sum of $2,413,685.61 was debited from the company’s account No 0014851716 to AA Loan Repayment Ref: FT16271UZYO. On 14/11/2016 the sum of $1,256,634.58 was debited from the company’s account No 0014851716 to AA Loan Repayment Ref: FT16319JJBH7.
“On 16/16/01/2017 the sum of $28,302,140.59 was debited from the company’s account No. 0014851716 to AA Loan Payoff Ref: FT170167YJNH.”
The report also noted that the bank failed to provide evidence to refute the company’s allegations that it was denied access to its account statements and not informed about debits made from its accounts.
“When they were questioned on the meaning/term of AA Loan Repayment, account officers, Dele Fasemo and Lekan Olakunle stated that it was a mere narration adopted at the point of applying funds into the company’s loan repayment.
“This is vague and ambiguous as it negates the principles of transparency and accountability,” the report concluded.
Following the release of the police findings, the House of Representatives scheduled a public hearing.
In response, Sterling Bank executives sought a court-issued ex parte injunction to halt the hearing and avoid reputational damage.
However, Innocent Usoro, representing Miden Systems, stated that the bank misrepresented facts to the court in order to obtain the injunction.
Sterling Bank’s head of corporate communications has not yet made any comment regarding the issue.
A court hearing on the matter is expected to take place on Wednesday, May 7.