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Firms Sue Minister, NNPC Over Appointment of Foreign Auditors
[June 30, 2014]

Firms Sue Minister, NNPC Over Appointment of Foreign Auditors


(AllAfrica Via Acquire Media NewsEdge) Three Nigerian accounting firms carrying on business under the name and style of 'SIAO Partners' have sued the Nigerian National Petroleum Corporation (NNPC) and Finance Minister, Ngozi Okonjo-Iweala, at a Federal High Court in Lagos to challenge the appointment of an international audit firm to carry out forensic audit of the NNPC.



The NNPC had appointed Price Waterhouse Coopers, an international audit and accounting firm, to carry out a forensic audit of the corporation.

But the plaintiffs - Robert Ade-Odiachi, Ladi Smith and Ituah Ighodalo - in their suit are contesting the appointment on the ground that it was a "violent violation" of the local content policy, especially the Nigerian Oil and Gas Industry Content Development Act of 2010.


The plaintiffs listed the NNPC, Nigerian Content Monitoring Board (NCMB), Finance Minister and Price Waterhouse Coopers as first to fourth defendants respectively.

They said in their statement of claim that they were shocked to read of the appointment of Price Waterhouse Coopers to audit NNPC account, being the Nigerian state oil company and the leading player in the Nigerian oil industry.

The said foreign firm was appointed for the auditing job in May.

Besides, the plaintiffs alleged that the said foreign firm was appointed without any bidding by local industry auditing or accounting firm, which was another breach of due process.

While pointing out the infractions, the plaintiffs stated that "under the provisions of Section 7 Content Development Act, NNPC ought to have submitted a Nigerian content plan to the second defendant (NCMB) demonstrating compliance with the Nigerian content requirements of the Act and under the provisions of Sections 10, 11 (1) of the Act, the submitted plan should contain provisions intended to ensure that first considerations shall be given to services provided from within Nigeria; Nigerians shall be given first consideration for training and employment in the work programme for which the plan was submitted and that the minimum Nigerian content in any project to be executed in the Nigerian oil and gas industry is consistent with the level set in the schedule to the Act.

"Under Section 11 (3) of the Act, all operators, alliance partners and contractors shall comply with the minimum Nigerian content for particular project item, service or product specification set out in the schedule to the Act." But the plaintiffs alleged that none of the requirements of the duly passed law in Nigeria was complied with before the decision to appoint the said foreign firm to audit NNPC account.

They added that despite separate letters to NNPC and NCMB on the need to respect the law and reverse the said appointment, nothing of such was done thereby depriving them and other Nigerian auditing firms the opportunity of bidding for the contract, a job which they claimed was reserved for Nigerian formed, and registered companies.

They are, therefore, seeking a declaration of the court that the appointment of PriceWaterHouse as forensic auditors of the NNPC was in contravention of Sections 10, 11 and 15 and other relevant provisions and schedules of the Nigerian Oil and Gas Industry Content Development Act, 1010, and to that extent the said appointment was illegal, null and void.

The plaintiffs also want an order setting aside the appointment and another order restraining NNPC acting through its Managing Director, directors, servants, agents and or privies or any supervising authority and or Minister of the Federal Republic of Nigeria, from appointing PriceWaterHouse or any other international accounting firm as financial advisers, financial management consultants, forensic auditors and or accounting service providers without complying with the Nigerian law.

Besides, they are also praying the court to direct the NNPC to submit a Nigerian content plan to the Nigerian Content Monitoring Board in compliance with the law and another order of mandatory injunction directing the NNPC to carry out a transparent bidding process for the acquisition of accounting, auditing or financial management services for the corporation in compliance with Section 15 of the Content Development Act, which according to the plaintiffs, requires the NNPC to give full and fair opportunity to Nigerian indigenous contractors and companies so as to appoint an appropriate forensic auditor for the corporation.

Copyright Daily Independent. Distributed by AllAfrica Global Media (allAfrica.com).

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