Joseph Arumemi-Ikhide, the founder of Nigeria’s biggest commercial airline, Arik Air, is perhaps the country’s most prolific user of offshore entities. Mr. Arumemi-Ikhide, alongside his wife, Mary, owns and maintains an intricate network of shell companies scattered across notorious tax havens, PREMIUM TIMES can report.
The revelation was brought to light as almost 400 journalists from 96 media organizations across the world analyzed leaked data obtained by a German newspaper, Suddeutsche Zeitung, and the International Consortium of International Journalists (ICIJ) from two offshore secrecy providers (Appleby and Asiaciti Trust) and 19 secrecy jurisdictions around the world.
The leaked 1.4 terabyte data, named Paradise Papers, consist of 13.4 million records and is no doubt one of the biggest leaks in history. PREMIUM TIMES is the only Nigerian media organization involved in the investigation.
Documents seen by PREMIUM TIMES and other ICIJ partners revealed that Mr. Arumemi-Ikhide and his wife are the beneficial owners of multiple shell companies registered and managed on his behalf by Appleby.
The companies include, JMIA (605) Aircraft Leasing Ltd, Gexair Ltd, JMIA (605) Aircraft Operator Ltd, and JMIA (6000) Aircraft Leasing Ltd (both companies were incorporated in the Isle of Man) as well as a company called Rockson International Group Ltd, incorporated in British Virgin Islands (BVI), whose business focus remained unclear.
Documents also sourced from the Panama Papers leak also revealed that the duo hired the controversial Panama-based law firm, Mossack Fonseca, to help them incorporate and manage a string of shell companies in the BVI.
The shell entities include St Joseph Properties Ltd, St Gregory Properties Ltd, Ojemaie Properties Ltd, St. Gregory Holding Ltd and St. Overbury Properties Limited.
In a telephone interview with PREMIUM TIMES, Mr. Arumemi-Ikhide said he did nothing unusual by operating multiple shell companies offshore.
“As a business person, we can have many offshore companies,” he said. “It is ease of doing business. You can create a company and you don’t use it. Why are people shouting?”
“In CAC people have 14 companies and don’t use it. It is not fraud and avoiding taxes. It is when you want to start a business you bring out the company. You register a company so when the opportunity comes you grab it,” he said.
“Red Flag”/ “High Risk” Person
Despite being an avid user of offshore entities, Mr. Arumemi-Ikhide didn’t get much love in return even from some of the most notorious secrecy providers who either deal cautiously with him or declined to act as his agents, documents show.
In 2015, Appleby contracted American Financial information firm, Dow Jones, to do a due diligence research on him. The report alleged a string of money laundering allegations and made reference to investigations by the Economic and Financial Crimes Commission (EFCC).
The report also tagged Mr. Arumeni-Ikhide Politically Exposed Person (PEP) with a link to a former Governor of Rivers State, Peter Odili. He was also labeled a “chronic debtor” and was flagged for allegedly engaging in business discussion with the government of Cote D’Ivoire in 2013 when the country was under international sanctions.
In a list of 135 PEPs, rated from low to high risk, the Arik founder was rated “high risk” and given the additional label of “red flag”. He was the only person on the list with the label.
Similarly, in 2015, Mossack Fonseca resigned as agent and operator of four of Mr. Arumemi-Ikhide’s shell companies after five years of chasing his representatives for identification documents needed for another due diligence report on the businessman.
An internal email thread obtained from the Panamanian law firm also revealed the company’s own investigations unearthed “adverse information” about Mr. Arumemi-Ikhide.
“Since we found adverse results regarding Joseph Ikhide Akinola Arumemi-Ikhide listed as director and shareholder of the reference companies and taking in consideration that we do not have due diligence information, we will resign as a registered agent of the mentioned company.
“Considering the lack of documentation, details and respective explanations about the information found in the compliance searches, the compliance committee decided that Mossack Fonseca will not continue providing service as registered agent to the following companies:
589684 – St. Gregory Properties Ltd
6011957 – St. Joseph Properties Ltd
6010550 – St. Gregory Holding Ltd
533335 – St. Overbury Properties Limited
“Please proceed to assign a case of resignation as the registered agent of the companies,” wrote Gustavo Sevillano, Mossack Fonseca’s compliance official, in an email.”
When asked to comment on why he was blacklisted by Mossack Fonseca and tagged a high-risk individual by Appleby, Mr. Arumemi evaded the question and proceeded to repeat his justification for setting up shell companies, this time arguing that everybody does it.
“Fonseca, everybody used it even Dangote. Everybody registered the company. All these companies are operating. We are not operating them there is no bank account to them. That is why they are called Shell companies,” he said.
The $73 million Private Jets
In January 2014, Mr. Arumemi-Ikhide requested the services of Appleby to help him set up two firms — JMIA (605) Aircraft Leasing Ltd and JMIA (6000) Aircraft Leasing Ltd — as Special Purpose Vehicles (SPVs) to purchase two new private jets worth $73 million.
“The client has requested that we set up two SPV’s to own two new aircraft, one Challenger 605 (USD 28,000,000) and one Global 6000 (USD 45,000,000),” one of the documents seen by PREMIUM TIMES show.
“The client is selling his current aircraft to finance the new ones together with financing provided by Invector [a Mauritian bank] Law Firm is lead counsel for the entire transaction. The UBO [ultimate beneficial owner] will be the sole shareholder of these two entities, potentially via our nominee shareholder,” the document added.
He was charged £5,000 to set up each of the shell companies including £5,000 annually as responsibility fee and £5,000 annually as the administrative cost.
Another document showed that Mr. Arumemi-Ikhide, on October 30, 2014, applied for a loan of $19.7 million to finance the purchase of the Global 6000 and another loan of $7 million to finance the purchase of the Challenger 605.
The data also revealed that Mr. Arumemi-Ikhide used nominee directors appointed by Appleby and Darbara Limited, an Isle of Man firm, to hide his ownership of some of his shell companies. For instance, in 2014, he consented to a 150-year deed for Darbara Limited to hold his shares in JMIA (605) Aircraft leasing Ltd as a trustee.
“The nominee declares that it holds the shares as trustee and, save as permitted by clause 3 of this deed, as the nominee under a bare trust for Joseph Ikhide Akinola Arumemi-Ikhide, a national of the Federal Republic of Nigeria,” a document reads.
The agreement, however, stipulates that Darbara Limited shall “account to the beneficiary owner for all dividends and other distributions received in respect of the shares” as well as “exercise, as the beneficial owner may from time to time direct, all voting and other rights.”
But despite documents showing that he bought two private jets, when asked, Mr. Arumemi-Ikhide claimed he only bought one Bombardier aircraft for $23 million through a financing firm – JMIA (605) Leasing Limited.
He also said he was not the owner of the company and that he returned the aircraft to the financing firm 18 months ago after having no further use for the aircraft.
“If you want to buy a Toyota car you go to Elizade (a popular auto dealer). And now if you don’t have money you use a company that specializes in buying Toyota car. They will buy the car. The name of the company, for instance, is Ibekwe finance company limited.
“It is not my company because I cannot sell it to anybody. It is a normal transaction. There is nothing about avoiding tax or something.
“I do not own the company. It is just a finance company,” he said.
Links with Benedict Peters
To highlight the intricate nature of Mr Arumemi-Ikhide’s offshores companies, while several documents seen identified him and his wife as the joint owners of JMIA (605) Aircraft Leasing Ltd and JMIA (6000) Aircraft Leasing Ltd, two documents obtained from the leaked database linked the companies to oil mogul and owner of Aiteo Group, Benedict Peters.
General Controllers Limited, a shell company owned by Mr. Peters, was identified as “sole corporate director” of JMIA (605) Aircraft Leasing Limited and JMIA (6000) Aircraft Leasing Limited. General Controllers Limited also co-signed two documents appointing Arik Air International Ltd and Blue Marble Aviation Limited (one of Mr. Arumemi-Ikhide’s United Kingdom companies) as agents for receiving service of process in any legal proceeding in the United States and the UK.
At least one of Mr. Peters’ London properties was linked to the alleged bribery case involving a former petroleum minister, Diezani Alison-Madueke. The property is one of three London properties linked to Mrs. Alison-Madueke which has now been frozen under the UK Proceeds of Crime Act.
[Former Minister of Petroleum Resources, Diezani Alison-Madueke]
The order, issued in September 2016, forbids defendants Mr. Peters, Mrs. Alison-Madueke, Atlantic Energy’s Kola Aluko and Jide Omokore, Christopher Aire (a jeweler for Mrs. Alison-Madueke) and Donald Amamgbo (her cousin) from disposing of or dealing with the properties.
Mr. Peters’ company Aiteo is also linked to the 2015 INEC bribery scheme that saw Mrs. Alison-Madueke’s son, Ugonna Madueke, distributes $115million to INEC officials via Fidelity Bank in 2015.
Mr. Arumemi-Johnson worked for Negris Engineering Limited, an electrical engineering firm, for 18 years, rising through the ranks to become executive director. He left the company in 2000 to form Rockson Engineering Limited. Shortly after forming Rockson, he was hired by the Rivers State Government to build the multi-billion naira gas- powered Omoku power plant through which he is believed to have made his big break.
In 2002, Mr. Arumemi-Johnson bought a Hawker jet aircraft for personal use. He then incorporated Arik Air Limited on August 2nd, 2004. Arik began operations on October 30, 2006, after Mr. Arumeni-Johnson paid out N900 million to acquire the headquarters and other facilities of the bankrupt Nigerian Airways in Lagos, Nigeria’s commercial capital.
In 2006, the Economic and Financial Crimes Commission investigated Arik and its owners following petitions that former Governor Peter Odili of Rivers State allegedly laundered his state’s funds through Mr. Arumeni-Ikhide and that it was the laundered money that was used to set up the airline.
And while investigating the allegations, the EFCC invited Mr. Arumemi-Ikhide for questioning. Searches were conducted in the offices of Arik Air and Rockson Engineering in Lagos and Port Harcourt respectively while documents relating to contracts and foreign exchange transfers were seized.
Although the report of the investigation alleged wrongdoing, no charges were brought against Mr. Arumeni-Ikhide.
On February 9, this year, the Asset Management Corporation of Nigeria (AMCON) took control of the airline following the company’s inability to service its N325 billion debt.