Friday, May 29, 2009

Transcorp CEO Charged With Fraud In Nigerian Court

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.

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.

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