Seven Oil Companies Challenge Constitutionality of RMAFC to Collect Revenue

Matilda Omonaiye/

Seven Oil companies have dragged the Revenue Mobilization Allocation and Fiscal Commission before a Federal High Court in Lagos, urging the Court to determine either the commission has constitutional power to assess, demand and collect revenue from private individuals and entities.

Joined as co-defendant is the Economic and Financial Crimes Commission (EFCC).

The Oil Companies suing as Plaintiffs are Elcrest Exploration and Production Nigeria Limited, Eroton Exploration and Production Limited, First Exploration and Petroleum Development Company Limited, ND Western Limited, Newcross Exploration and Production Limited, Seplat Petroleum Development Company PLC and Shoreline Natural Resources Limited.

In an affidavit in support of the originating summons sworn to by a legal practitioner Olumayokun David and filed before the Court by Barrister Abimbola Akeredolu SAN, the deponent averred that by separate letters issued by RMAFC to the Plaintiffs, the commission alleged that it discovered and established stamp duty liability against each of the plaintiffs in connection with what it described as OML Sales Purchase agreement involving the respective plaintiffs.

The commission demanded the following sums from the plaintiffs respectively: Elcrest Exploration and Production Nigeria Limited – US$2,633,926; ND Western Limited-US$9million; Newcross Exploration and Production Limited – US-13,500,000; Seplat Petroleum Development Company PLC – US$ 11,227,825; Shoreline Natural Resources Limited – US$12,750,000.

The plaintiffs’ companies were surprised by the defendant’s demands and the circumstances in which they were made as the companies were not consulted and heard before the commission adjudged them to be liable. In addition, the commission laid complaint to EFCC against each of the plaintiffs in respect of the content of the demand notices.

Some of the plaintiffs challenged the propriety of the commission’s demand in several letters addressed to the commission, as they contended that the commission’s actions were outside its statutory remit

However, rather than back down on what the plaintiffs believe to be an unconstitutional adventure the commission responded and sought to justify its action.

Meanwhile, acting at the behest of the Commission, EFCC invited officers of the companies to its office in Lagos. In the letters of invitation, EFCC specifically asked the plaintiffs to come with documents “in respect of the sale and purchase agreement transfer” of Oil Mining Leases (OMLS) transactions involving the Plaintiffs. EFCC also requested the plaintiffs to submit evidence of stamp duty payment for their respective transactions, amongst other requests.

Consequently, the plaintiffs are now urging the Court to restrain EFCC and any Government agency or establishment by itself, officers, agents from inviting, arresting, detaining and harassing them.

The Plaintiffs are also seeking the order of the Court restraining RMAFC, whether by itself or its agents, from taking further steps in relation to the verification and reconciliation of revenue exercise in relation to the plaintiffs operations.

RMAFC, in its counter affidavit sworn to by its Chief Accountant, Dr.Aliyu Idris, filed before the Court by a Lagos Lawyer, Barrister Dokun Makinde SAN, while denying almost all the averments of the Oil companies, stated that as part of the Commission’s constitutional and statutory responsibility of monitoring accruals of revenue into the Federation Account, it is also empowered by the Constitution to monitor revenue accruals from any other sources.

He said, “The demand for the payment of unremitted stamp duty fee from the plaintiffs are within the constitutional power of the Commission and the demand made from the plaintiffs were as a result of verification and reconciliation of their accounts with the Federal Inland Revenue Service (FIRS). The commission is empowered to collaborate with FIRS in performance of its duties.”

Dr. Idris also stated that the failure of the plaintiffs to remit the stamp duty fees charged on the Oil Mining license granted to the plaintiffs is an act of economic sabotage that the EFCC is empowered to investigate; consequently the report by the commission to EFCC of the failure of the plaintiffs to remit the stamp duty fees into the Federation Account for investigation is in performance of its civic responsibility to report crime.

He said, “The Plaintiffs have not denied the non- remittance of the stamp duty fees payable to the Federation Account. Therefore this suit is an attempt by the plaintiffs to restrain the payment of unremitted stamp duty fees owed by them which were not denied. Consequently, this suit seeks the exercise of the discretion of the Court to perpetuate an illegal and criminal act and use the Court as a vehicle to further perpetrate this criminal acts, therefore I urge the Court to refuse the application.”

EFCC in its counter affidavit sworn to by one of its investigators, Bello Buhari Kobi, and filed before the Court by its legal officer A.B.C. Ozioko, stated that on or about June, 2019, EFCC received intelligence report alleging that royalties, pipelines transportation fees and sundry taxes and levies due to the Federal Government of Nigeria arising from sale and production of petroleum resources were not remitted to the government between 2009 to 2015 as same were fraudulently frittered away by some individuals acting through oil companies thereby leading to over N100 Billion revenue loss to the Government.

Kobi averred further that the intelligence report was analyzed and found worthy to be investigated and same was referred to his team for detailed investigation.

He stated: “As part of their investigative procedure and in line with international best practices, letters of investigation activities were written and dispatched to various individuals, corporate organizations and financial institutions, while some replies have been received and analyzed, others are being awaited.

“In the course of the on-going investigation, EFCC conducted interview sessions with a lot of individuals and corporate organizations who have provided credible evidence to aid the investigation, but while waiting for interview session with officials of the identified companies including the plaintiffs, EFFC was served with the instant Court processes.”

While denying nearly all the averments of the plaintiffs, Kobi stated that most of the depositions contained therein are falsehood, designed to mislead the Court.

The investigator stated further that the agency did not arrest or detain or intimidate or coerce the plaintiffs or anybody in the course of the investigation, rather the investigation is expected to unravel the following:

To unravel among other things whether there are royalties, taxes in form of stamp duties or levies and/ or sundry statutory charges payable by the plaintiffs or any agency connected thereto to the Government in the course of their legitimate business.

To unravel whether such royalties, taxes and levies accruable to the Government from the plaintiffs have been paid to the Government by the plaintiffs within the time as alleged by the intelligence or not.

Whether there is fraud or dishonest diversion of funds resulting in revenue loss to public account and identify individuals or organizations responsible. Cooperation of the plaintiffs in this regard is very necessary in order to reach logical conclusion of the ongoing investment.

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