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Monday, February 26, 2024

Conoil entangled in N4.3 bn Lawsuit with EFCC indicted Oil Trader

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Conoil Plc, has revealed that it is in litigation with Nimex Petrochemical Nigeria Limited (Nimex), one of its former suppliers of products and a firm recently indicted by the Economic and Financial Crimes Commission, (EFCC), for alleged fraud relating to a fuel subsidy scam.

In 2007, Nimex sued Conoil for US$3,316,702.71 and US$127,060.62 being claimed as demurrage and interest incurred for various supplies of petroleum products.

The Federal High Court gave judgment in favour of Nimex in the sum of US$13,756,728 which included the amount claimed and interest at 21 percent till judgment was delivered and also granted a stay of execution with a condition that the judgment sum be paid into the court.

The court also granted a garnishee order against First Bank of Nigeria Limited to pay the Company’s money with the bank into the court.

Conoil says it has appealed against the judgment to the Court of Appeal in Abuja, and its Directors, on the advice of external solicitors, believe that the judgement of the Federal High Court will be upturned.

“The current value of the judgment sum is N4.3 billion. However, a provision of N4.3billion has been made in these financial statements to mitigate any possible future loss,” Conoil said in a recent filing.

Curiously however the EFCC in 2014 declared Azmat Mohmood, a German citizen of Pakistani extraction, wanted after allegedly using his company Nimex Petroleum Limited to defraud the Nigerian Federal Government of over N1.3 billion in a bogus subsidy deal.

Mohmood is said to be an international petroleum trader, whose company, Nimex Petroleum Limited allegedly sold and shipped 38,010,413 litres of Premium Motor Spirit to the defendants in a case brought by the EFCC – ASB Investment, Aro Samuel Bamidele and Abiodun Kayode Bankole – for which they allegedly received N1,341,471,735.67 as subsidy for products that were never supplied.

The Chairman and largest shareholder of Conoil is Mike Adenuga (Jr.) GCON, who has significant interests in Glo Mobile Limited, and Sterling Bank Plc (formerly Equitorial Trust Bank).

The firm reported profit growth of 11 percent in 2019 to N1.985 billion although receivables due from the PPPRA jumped by 45 percent to N5.57 billion in the period due to late payment of subsidies owed. The stock is up 8 percent in the past year and closed trading at N21 on Friday for a market capitalization of N14.573 billion.

Conoil primarily engages in the sale of petroleum products – Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Aviation Turbine Kerosene (ATK).

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