Transcorp three charged with USD110 million fraud

29 May 2009

Reuters is reporting that Nigeria’s anti-corruption police have charged the head of local conglomerate Transcorp and two other employees with fraud for embezzling around USD110 million belonging to struggling former monopoly telco NITEL. The Economic and Financial Crimes Commission (EFCC) told a Federal High Court in the capital Abuja that the managing director of Transcorp, Thomas Iseghohi, and two other top officials embezzled the money through the award of dubious contracts, payment of legal and consultancy fees and media adverts. The three pleaded not guilty to 32 charges brought against them by the EFCC. Trial judge Anwuri Chikere ordered that they be remanded in prison and adjourned the case to 9 June when their bail applications would be heard.

According to TeleGeography’s GlobalComms database, the federal government sold it’s 51% stake in NITEL to Transcorp for USD750 million in November 2006, retaining a 49% interest. Since then the telco’s initial 500,000 fixed lines in service have dropped to about 45,000, its workforce has declined from 12,000 to just 2,000 and the company is USD500 million in debt. In February 2009 Transcorp agreed to divest part of its shareholding in the telco and in late March the BPE announced it was offering a 51% stake in the fixed line operator and 100% of its mobile unit. Earlier this month the bureau extended the deadline for the submission of bids for the telco from 4 May to 31 May and relaxed the requirements for the pre-qualification of interested investors.