The Economic Financial Crimes Commission (EFCC) in Nigeria has initiated an investigation into the Africa Infrastructure Partners Fund (AIPF), owned by Indian businessman Harpinder Singh Narula and his son Anhad Narula. The investigation is centered around suspected fraud, criminal conspiracy, money laundering activities, and criminal breach of trust.
This investigation follows a petition filed by Fenchurch Energy Nigeria Limited, raising concerns about potential violations and breaches by AIPF, Singh Narula, and Anhad Narula of various Nigerian laws, including criminal, banking, and company laws, as well as the Investments and Securities Act 2007 and SEC Rules.
Legal Action
Prior to the petition, Fenchurch Energy Nigeria Limited had filed a legal action at the Federal High Court. The action involved a multi-billion naira financial claim against Harpinder Singh Narula, Anhad Narula, Niran Ajakaiye, Dipo Lawore, and Africa Plus Partners Nigeria Limited (APPNL) for material breaches of their investment agreement with Fenchurch. It also addressed issues concerning the investments and operations of Bastanchury Power Solutions Limited (BPSL), a company formed to develop and operate an 8.5MW Independent Power Plant (IPP) in Asaba for the Delta State Government.
The petition for criminal investigation highlighted grievous multi-billion naira economic crimes, including suspected financial misappropriation, money laundering, misrepresentation, and fraudulent diversion of funds. These activities were allegedly carried out by AIPF, which is owned and operated by APPNL, Anhad Narula, Niran Ajakaiye, and Dipo Lawore.
Allegations on Narula
According to the petition, AIPF, invited as investors based on their claim to fund infrastructure projects, proceeded to instigate an illegal hostile takeover of the company. This resulted in the operation of BPSL in a manner inconsistent with Nigerian laws. Allegations include a lack of corporate governance, fabricated board resolutions, unauthorized fund transfers, and illegal payments to government officers, among others.
Legal and Criminal Actions
Legal and criminal actions against the defendants allege a premeditated fundamental breach of contract, criminal conspiracy to obtain the company’s shares and money, money laundering activities, and criminal breach of trust. The defendants are accused of running the company in a manner oppressive and unfairly prejudicial to shareholders’ rights, in clear violation of Nigerian company laws.
Specific Allegations
Furthermore, they are alleged to have:
– Committed criminal unlawful financial assistance
– Operated the company’s bank accounts illegally and in breach of banking laws
– Failed to hold statutory general meetings as required under Nigerian company laws
– Violated SEC regulations
Non-Disclosure and Improper Financial Statements
Additionally, it is alleged that the defendants failed to make full and material disclosures of all claims, liabilities, and criminal prosecutions the company is subject to. They also provided improper financial statements and falsely informed auditors of the lack of legal proceedings against the fund and company. There were also allegations of non-disclosure to the SEC and investors of the possible impact of the legal and criminal actions on the fund and the promoters of APPNL as a registered capital market operator.
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Resistance to Audit
Despite requests for a forensic audit of BPSL accounts by Fenchurch Energy, AIPF and its executives allegedly engaged in actions to undermine Nigerian laws.
This included filing spurious matters against Funso Adeyemi and Femi Bakare of Fenchurch Energy, in an attempt to obstruct any audit or investigation into the accounts of BPSL and payments to government officials in Delta state.
Legal Response
In response to these allegations, Funso Adeyemi and Olufemi Bakare of Fenchurch Energy have retained the services of law firms Babalakin and Co, AAA Chambers, and The Prestige Consulting LP to pursue legal actions in court and with the SEC.
The investigation and legal actions highlight the complexities and challenges associated with foreign investment in Nigeria and the importance of enforcing laws to protect the interests of investors and uphold the integrity of the financial system.
