EMI dismisses $120m fraud claims against co-founder

From Adanna Nnamani, Abuja

Energy and Metals Industries Limited (EMI) has denied allegations of $120 million fraud against its co-founder, Dr. Innocent Ozoemena Ezuma, describing the controversy as a longstanding commercial and investment dispute involving agreements for mining and power projects in Nigeria.

The company said the allegations could not be properly assessed without considering the agreements between the parties, the corporate structure of the projects, the work carried out and the ongoing legal proceedings.

In a statement issued in Abuja, EMI said its relationship with the foreign investor was governed by a Memorandum of Understanding (MoU) executed in Kyiv, Ukraine, on March 23, 2008, for the development of the company’s Nigerian operations.

The MoU contemplated an investment portfolio of up to $1.5 billion, with about 20 per cent of the proposed investor contribution structured as interest-free credits, while the balance was expected to come from independent financial institutions.

It also referred to a Corporate Agreement dated January 30, 2013, relating to the development of a coal-fired power project at Itobe, Kogi State. EMI said its mining operations involved exploration and technical work in Kogi and Zamfara states, including 57 boreholes covering 6,025 metres, 11 trenches spanning 970 metres and 78 test pits in Kogi.

In Zamfara, the company said it undertook geological mapping, collected 385 soil geochemical samples, conducted geophysical surveys and carried out trench investigations and preliminary prospecting for gold.

It added that technical reviews were conducted by SRK Exploration Services of the United Kingdom and CSA Global of Australia, while a 2015 study recommended further drilling, metallurgical testing, environmental assessments and feasibility studies before a final investment decision.

On the power project, EMI said Itobe-1 Coal Power Limited obtained a Nigerian Electricity Regulatory Commission (NERC) licence for a 300-megawatt on-grid coal-fired power plant in December 2014, which was subsequently renewed until September 29, 2031.

The company, however, said persistent electricity supply challenges had affected energy-intensive industries and complicated the development of mining and industrial projects.

It also disputed allegations that investment funds were diverted to associated companies and individuals, insisting that such claims should be assessed against the relevant financial records and transactions.

On the acquisition of Jos Steel Rolling Company, EMI said its transaction team led the process to acquire the assets of the defunct company in 2005, three years before the foreign investment relationship was formalised. It said Zuma Steel West Africa Limited acquired the assets from the Federal Government through a court-supervised liquidation process guided by the Bureau of Public Enterprises.

The company also disclosed that it was a respondent in an arbitration involving Tooley Property Company Limited, which resulted in an award dated January 17, 2020.

It said five arbitral awards were being challenged by Zuma companies before the Federal Capital Territory High Court, Abuja, in Suit No. FCT/HC/CV/001/2020, on grounds including alleged illegality, misconduct and lack of jurisdiction.

According to EMI, applications seeking recognition and enforcement of the awards were also filed in separate suits, including one involving the company, while it and its associates had opposed the applications.

On the investigation, EMI acknowledged the role of the Economic and Financial Crimes Commission (EFCC) in investigating allegations of financial and economic crimes, adding that Ezuma was willing to cooperate with lawful requests from the agency.

It maintained that its co-founder had not been convicted of any offence and urged the media to distinguish between allegations, commercial disputes, arbitral proceedings and established criminal wrongdoing.

The company called for balanced reporting of the dispute, warning against publications it considered false, misleading or defamatory.