Economic And Financial Crimes Commission
EFCC/EC/GC/031/840
September 8, 2006-09-15
The Speaker,
Ekiti State House of Assembly,
Ado Ekiti,
Ekiti State
INVESTIGATION ACTIVITIES
Investigation Progress Report
Re: A Case of Conspiracy, Abuse of Office, Money Laundering, Corrupt Practices and Stealing of Government Funds
Following several petitions received from the Ekiti Justice and Equity Movement alleging conspiracy, illegal diversion of funds and corrupt enrichment, corrupt practices, money laundering, abuse of office and stealing of government funds on the part of Mr. Ayodele Fayose, Executive Governor of Ekiti State and several officials of the Ekiti State Government, the Economic and Financial Crimes Commission (EFCC) embarked on a comprehensive investigation, which has indicted the following persons and corporate bodies:
Mr. Ayodele Fayose, Governor of Ekiti State
Mrs. Biodun Olujinmi, Deputy Governor
All members of the State House of Assembly
All 16 Chairmen of the State’s Local Government Areas
Commissioner for Finance, Ekiti State
Commissioner for Agriculture, Ekiti State
Commission for Works, Ekiti State
Permanent Secretary, Ministry for Local Government,
Chairman, Ekiti Roads Maintenance Agency
Mr. Biodun Fari-Arole (a contractor)
Mr. Gbenga James (a contractor/consultant)
Mr. Abiola Ayobola (a banker)
Mr. Olatunji Goke, Personal Assistant to the Ekiti State Governor
Biological Concept and Avian Specialties Limited
The specific findings of the investigation indicting the individuals and corporate bodies listed above are presented hereunder:
Integrated Poultry Farm
Between December 2003 and December 2005, the Executive Governor of Ekiti State, without due process, engaged Biological Concept, managed by one Mr. Gbenga James, his personal friend, on the pretext of establishing an integrated poultry farm in the State. Through this bogus project, the sum of N855 million was withdrawn from the account of the State Government as summarized hereunder:
1) On the 28th of April 2004, the sum of N340 million was transferred from the Wema Bank account of the State Government to the account of Biological Concept in Prudent Bank. Before the transfer, the company was indebted to the Bank to the tune of N58 million. Immediately the transfer was made, the bank deducted the sum. The Managing Director of Biological Concept, on the same day withdrew over N80 million and converted the sum of N17 million into British Pounds Sterling and US Dollars, which he sent through the current Deputy Governor, Mrs. Olujimi, who acknowledged receipt of the money from one Mrs. Shade Ibiyemi, Secretary to the Managing Director of Biological Concept.
2) Ten days later, Mr. James converted the sum of N156 million to US Dollars and transferred same to India in favour of his other Company, Avian Specialties via Statement of Account of both Biological Concept and Avian Specialties in Union Bank and Prudent Bank.
3) At the Afao-Ekiti headquarters of the poultry project, it was established that out of the sum of N855 million collected for the project, N350 million was meant for the construction of the headquarters, but only N73 million was used to build the headquarters and installation of equipment.
4) Mr. Gbenga James transferred over N100 million from the Account of Biological Concept to the account of Avian Specialties as if the money was proceed from his legitimate earnings.
5) It was established that the members of the House of Assembly visited the Managing Director, Biological Concept in Ibadan twice where they were given the sum of N2 million and were hosted to a party on the second occasion in the company of Governor Fayose where unspecified amount of money was given to them.
6) It was also established that the Managing Director of Biological Concept spent over N150 million to acquire properties for himself and the Executive Governor at both Ibadan and environs.
7) Mr. Gbenga James acquired eight cars for himself and the Governor’s mother via statement of Mr. Wale (James’ friend) who received the money in the United States and the motor dealer in Ibadan from whom the Governor’s mother’s car was purchased.
8) Mr. Gbenga James built a house for the Governor through an architect, Mr. Lawal Adeyinka, who collected over N40 million from the accounts in Union Bank and Prudent Bank.
9) From the proceeds of the contract sum of the government secretariat at Ado Ekiti, Biodun Fari-Arole, a contractor built two houses for the Governor, one at Afao Ekiti (the home town of the Governor) for N25 million while the other at Ibadan for the sum of N20 million and also transferred the sum of N42 million to the Governor through Mr. Abiola Ayobola of FCMB (Ibadan Branch) via the Statement of Accounts of Grid Associates in Zenith and FCMB at Ibadan and also the written statement of Mr. Ayobola.
Construction of the Governor House, Banquet Hall and Ekiti State Hotel
It was established that the above contracts were awarded to Grid Associates managed by Architect Biodun Fari-Arole for over N1 billion. It is worthy of note that the same contracts were executed by former Governor Adeniyi Adebayo’s administration and the work was almost completed. These same were re-awarded to the above named company at the above stated sum without due process.
Transfer of Foreign Currency:
It was also established that the Governor sometimes in 2004 transferred the sum of over US$100,000 to Tonee Orubuloye, the son of the current Vice Chancellor, Ado Ekiti University through the said Mr. Abiola Ayobola (the banker) while he was working at the Standard Trust Bank (STB).
Illegal Diversion of Local Government Funds
Between January 2004 and June 2006, the sum of N17,876,489,560 was paid into the Ekiti State Joint Local Government Account from the Federation Account being the statutory allocations that accrued to the 16 local government councils in the State.
In the course of investigation the alleged diversion of local government funds, it was established that the Accountant General of the State accounted for the sum of N6 billion being salaries and other statutory deductions which fall under first line charges.
However, the Accountant General and the Chairmen of the 16 local government councils were unable to explain the whereabouts of the whopping sum of N11.8 billion. Apart from allocating N2 million per month to each local government chairman out of which N500,000,000 was paid into the account of Ayo Fayose Foundation, it was established that over N100 million was being deducted monthly by the State Government from the Joint Account and shared among government officials including members of Ekiti State House of Assembly and the Chairman of PDP in Ekiti State. This was confirmed in some of the vouchers provided by the Ministry for Local Government.
The balance which is in excess of N60 million monthly, is said to be in respect of town projects which include road maintenance under Ekroma Water Maintenance and Electricity/Transformers Maintenance. It should be noted also that a total sum of N265 million classified as Ekroma expenses was deducted between July and August 2005 from the records presented by the State Accountant General, whereas the Project Manager, Engr. Kolade claimed that he got only between N16 million and N17 million in the same period.
Thus far the Ministry for Local Government Affairs has failed to supply the Joint Account Expenditure to EFCC. But concerted efforts are being made by the Commission to get all relevant documents in order to conclude investigation of the Joint State-Local Governments Account.
Supply of Vehicles
It was established that the Director of Affordable Cars Limited, the major supplier of cars to Ekiti State Government transferred the sum of N11,500,000 to the account of Grid Associates managed by Mr. Biodun Fari-Arole, who released the money to Mr. Olatunji, the Personal Assistant to the Executive Government vide the statement of account of Affordable Cars Limited and Grid Associates in Zenith Bank Plc. However, the Managing Director, Grid Associates and Managing Director, Affordable Cars Limited denied knowledge of the transfers. However, the fact remains that N11.5 million went through their accounts to Mr. Olatunji, the Governor’s Personal Assistant.
Offering Gratification for the Impeachment of the Former Deputy Governor
It was established that in May and June 2005 when Governor Fayose wanted the State House of Assembly to impeach the Deputy Governor, Surveyor Biodun Aluko, he offered 19 members of the House of Assembly two million naira each to facilitate the impeachment process via Wema Bank Cheque (NO. 0323432) issued for the sum of N38m.
When the inducement became public knowledge, the Governor claimed the payments were for constituency projects being executed by the State legislators, glossing over the fact that were it so, all 26 members of the House should have received the equal payments for the same purpose, that is, execution of constituency projects. Two months after the scandal became subject of intense media scrutiny, the remaining seven members of the Ekiti House of Assembly whose stand against the impeachment led to their exclusion in the original scandalous inducement, were paid N2 million each. Accompanying the payment of N14 million to the seven members of the Ekiti House of Assembly was the threat of recall by their constituents who were to be told that their representatives refused to accept constituency funds meant to benefit their constituencies.
The investigation took notice of the fact that there were no advertisement, no bidding, and no contract agreements as demanded by law for the execution of the contracts for the purported constituency projects.
Road Construction/Supply of Cars
Investigation of the above contract is ongoing. It is aimed at establishing the actual amount of funds that were diverted in the course of executing the contracts.
Signed
NUHU RIBADU,
EXECUTIVE CHAIRMAN
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