Yinka Awolusi, a prosecution witness of the Attorney-General of the Federation (AGF), on Wednesday told the Federal High Court in Ikoyi, Lagos how management of Consolidated Discount House Limited (CDL) stole N43 billion from the company.
Led in evidence by Daniel Enwelum before Justice Mohammed Idris the witness identified Falcon Securities Limited as a client of CDL and said they have done business together for decades.
Sometime in 2004, the witness said, the management, under one Stephen Olawale Akinretoye, approved a loan without collateral and above the approval limit to Falcons Securities.
While tendering some of the documents that were used for that transaction, he informed the court that some other documents that proved the transaction were lost because of a change of the office address of CDL from 37/38 Marina, Lagos to No 6, Adeola Adeku, to Victoria Island.
Among the documents tendered in court were the Board approval limit manual, the organogram of CDL in 2004 [and?] 2007, and the minutes of its Board meetings between 2007 and 2011.
The AGF said over N6billion was transferred from CDL to third parties and different companies directly connected to the accused.
The suspects standing trial before Justice Idris include CDL’s former Managing Directors, Stephen Akinretoye and Mudashiru Shittu; and employees Larai Claude-Eninn, Hassan Gbenga, Ajibola Jolaosho, Omisore Olawale, Omisope Johnson, Onimole Adebawale and Emmanuel Odedina.
The prosecution alleged that Mr. Shittu and Mr. Gbenga, serving as financial controllers between March 2012 and June 2013, transferred N1.6 billion from CDL’s Union Bank Plc account, #0033295449, to companies belonging to them.
The suspects were arrested after CBN’s Legal Adviser/Director of Legal Services petitioned the Economic and Financial Crimes Commission (EFCC) following the discovery of “a high degree of corporate fraud and manipulation of records” by CBN examiners who probed the discount house.
The prosecution said all returns made to CBN by CDL were based on risk assets of N22billion, instead of N96bilion, due to the fact that “reports of transactions and account balances were suppressed.”
Mr. Akinretoye was alleged to have converted N4.5billion between January 1, 2007 and December 31, 2009 through a company, Goldbank Management Associate Limited, where his wife was a director. The prosecution said the facility granted Goldbank was never brought to the attention of the board of CDL.
The alleged offence, said the prosecution, contravenes Section 15 (2) of the Money Laundering Prohibition Act of 2012. The defendants pleaded not guilty to the 24-count charge.
Two other sets of suspects were earlier arraigned on April 18 2016 based on two separate charges. Defendants in the first charge were Akinretoye, Peter Ololo and Falcon Securities.
The second charge has Akinretoye, Shittu, Omisore, Captain Eddy Ndoms, Aquatic Transport Limited, Cross Oceans Limited and Ehco Ventures Limited as defendants.
In the first charge, the government alleged that between January 1 and December 31, 2007, the accused conspired to defraud CDL by granting loans to Falcon Securities, a company owned by Ololo, without proper documentation.
The prosecution said they allegedly converted N43.9 billion, belonging to CDL, in contravention of the Money Laundering Prohibition Act, 2012.
In the second charge, Akinretoye and others allegedly defrauded the company in the guise of granting loans to the 4th-7th defendants, and converted N520 milion, N303 million and N600 million.
The prosecution further said investigations showed that CDL paid for vessels before the dates of the applications for loans made by the 4th-7th accused, who pleaded not guilty.
Justice Idris adjourned till tomorrow for cross examination of Mr. Awolusi.