Leno Adesanya, promoter of Sunrise Power and Transmission Company Limited, told the international arbitration tribunal in Paris that the $500,000 he transferred to Jennifer Douglas, now former wife of ex-Vice-President Atiku Abubakar, in January 2003 was part of a foreign-exchange transaction carried out for Atiku.
The payment was made on January 30, 2003 — less than four
months before Sunrise was purportedly awarded a build-operate-transfer contract
for the Mambilla hydropower project — through China Castle Investments Limited,
an offshore company controlled by Adesanya.
Details of the transaction and Adesanya’s explanation are
contained in the final award issued by a three-member International Chamber of
Commerce (ICC) tribunal in the arbitration between Sunrise and the Federal
Republic of Nigeria, reviewed by TheCable.
The tribunal rejected Sunrise’s claims against Nigeria and
ordered the company and Adesanya to reimburse the country for most of the legal
costs it incurred in the proceedings.
Douglas was a central figure in the corruption and money
laundering investigation that linked Atiku to William Jefferson, a convicted
former US congressman.
Atiku has consistently denied any wrongdoing in connection
with the case.
TheCable has contacted Paul Ibe, Atiku’s media adviser, and
Phrank Shaibu, his senior special assistant on public communication, for
comments.
During the arbitration, Nigeria alleged that the $500,000
transfer to Douglas was connected to the disputed award of the Mambilla
contract.
Sunrise and Adesanya denied that allegation, maintaining
that the payment had nothing to do with the project.
Adesanya said he had operated a bureau de change business
through Moneyline Ventures Limited and that the money sent to Douglas’s
Citibank account in the United States represented dollars purchased for Atiku
with naira.
A screenshot of Douglas’ bank statement
“I confirm that I made a transfer of $500,000 to the
Abubakars through my company China Castle Investments Ltd in early 2003,”
Adesanya said in his fourth witness statement, according to the award.
Under cross-examination, he also expressly acknowledged
transferring the money to Douglas.
However, the tribunal said Adesanya did not produce
documents showing the underlying naira payment, the exchange rate applied,
instructions from Atiku or his aides, correspondence concerning the
transaction, or any record establishing its commercial purpose.
Adesanya said the discussions relating to the transaction
were oral and that, more than two decades later, he no longer had access to any
written exchanges that might once have existed.
Neither Atiku nor Douglas gave evidence in the arbitration.
The tribunal said Sunrise and Adesanya did not submit a
witness statement or declaration from either of them to corroborate the
foreign-exchange explanation.
According to the award, Adesanya said he tried to secure
Atiku’s testimony but the former vice-president was reluctant to become
involved in proceedings concerning former President Olusegun Obasanjo. He said
Atiku remained an opposition politician and did not wish to be drawn into a
dispute involving the former president.
Adesanya initially suggested that Atiku, through his
lawyers, had confirmed that the payment was a foreign-exchange transaction.
During cross-examination, however, he said the explanation had been relayed to
him by “Dr Ndukwe”, whom he identified as Atiku’s medical doctor, while a later
confirmation came through lawyers.
Pressed on whether the confirmation actually originated from
Atiku, Adesanya described that as his “logical assumption”, saying he did not
believe Atiku’s lawyers would have supplied the information without consulting
him.
The tribunal treated the account cautiously, noting that
Adesanya produced no correspondence, telephone records or other evidence of his
alleged contacts with Atiku’s counsel, Ndukwe or the former vice-president’s
aides.
WHY DOUGLAS DID NOT TESTIFY
Adesanya also offered an explanation for his inability to
obtain evidence from Douglas.
During the hearing, he said she and Atiku had gone through a
difficult divorce and that she had fallen out with him because he opposed the
separation and supported Atiku and another wife.
“She would not even pick my call,” Adesanya was quoted as
saying.
The tribunal observed that this account conflicted with his
fourth witness statement, in which he had said he remained friends with
Douglas. He had also described her as a close friend and his first girlfriend
in high school.
The award additionally referred to a 2010 report of the
United States Senate Permanent Subcommittee on Investigations, which examined
offshore transfers into Douglas’s US accounts. The report said that, as banks
questioned the payments, she maintained that the funds came from her husband
and professed little familiarity with the offshore companies that transmitted
them.
The tribunal said the absence of corroborating evidence,
together with the inconsistencies in Adesanya’s testimony, meant it could not
accept his explanation that the $500,000 was a foreign-exchange transfer for
Atiku.
It also found that Adesanya failed to prove that Moneyline
held a bureau de change licence at the time. Although he offered during the
hearing to obtain the licence from his company secretary, no copy was
subsequently placed before the tribunal.
The tribunal said that even proof of a Moneyline licence
would not have resolved the issue because the money was transferred by China
Castle, not Moneyline. Adesanya accepted under cross-examination that China
Castle was not licensed to conduct foreign-exchange transactions and that such
transactions did not fall within its stated corporate purposes.
NEGOTIATIONS BEGAN IN 2021
The tribunal examined the payment against the background of
negotiations for the Mambilla project, which had started nearly two years
earlier.
On September 12, 2001, Sunrise and North China Power
Engineering Company met officials of the National Electric Power Authority and
expressed an interest in participating in the project.
Sunrise was incorporated in Nigeria on October 9, 2001, to
identify investment opportunities principally in the power sector. Adesanya,
his wife and Lenoil Holdings Limited, another company associated with him, were
its initial shareholders.
Six days after the incorporation, North China Power
Engineering Company and Lenoil Holdings met to discuss power-sector projects,
including Mambilla.
On October 18, Sunrise wrote separately to Obasanjo and
Atiku, informing them of its interest, with its Chinese partner, in developing
the hydropower project.
Atiku and his team met representatives of Sunrise and the
Chinese company on November 13.
According to the minutes cited by the tribunal, the then
vice-president said the project was expected to cost about $6 billion, while
the companies reaffirmed their interest in developing it.
Sunrise and the Chinese firm submitted a proposal to the
technical committee of the federal ministry of power and steel on December 12,
2001. Sunrise sought government participation in the ownership of the project,
arguing that it would strengthen the confidence of its foreign partner to
invest more than $4 billion.
The company also requested a waiver of the mandatory
$500,000 processing fee required by NEPA.
In January 2002, Obasanjo and Olusegun Agagu, then minister
of power and steel, invited Sunrise to preliminary discussions. The meetings
took place on January 21 and 24.
On March 1, Agagu informed the company that Mambilla would
be privately financed and that the federal government was considering a
minority equity interest of no more than 25 percent. The minister also said an
initial $100,000 tranche of the $500,000 processing fee should be put in escrow
to cover a non-refundable consultancy charge.
Atiku subsequently led a federal government delegation to
China in July 2002. The delegation included Aliyu, then minister of state for
power and steel, and Adesanya.
During the trip, Nigerian officials and the Chinese
companies signed a memorandum of understanding covering several power projects.
One of them was the first phase of Mambilla, then estimated to cost $4.5
billion and generate 2,600 megawatts.
In August 2002, Agagu supplied Sunrise with the proposed
principal terms and conditions for Mambilla. Sunrise completed and returned
them the following month.
Agagu later left the ministry to contest the Ondo
governorship election and was succeeded by Olu Agunloye.
On December 9, 2002, the ministry invited Sunrise to a
meeting scheduled for January 15, 2003, to discuss and agree on the principal
terms and conditions for executing the project.
Sunrise presented its tender to a multi-agency technical
committee on January 15 or 16. The committee included officials from the
ministries of power, water resources, and finance, as well as representatives
from the Debt Management Office, the Federal Inland Revenue Service, and NEPA.
It was about two weeks after that presentation, on January
30, that China Castle transferred $500,000 to Douglas’s Citibank account.
TECHNICAL COMMITTEE RECOMMENDED SUNRISE
On March 12, 2003, the technical committee issued its
report. It said seven international construction companies had expressed
interest in the project, but only four — Tafag Nigeria Limited, Lemna
International, Sunrise, and Propel Consortium — submitted detailed proposals.
After assessing the proposals and presentations, the
committee recommended Sunrise for the 3,960MW project on the basis of cost
effectiveness, capacity to execute the work and the project’s economic
implications.
It proposed further negotiations to refine the technical
committee’s terms and said Sunrise had offered a tariff of 2.1 US cents per
kilowatt-hour under a 40-year build-operate-transfer arrangement.
On April 7, Agunloye wrote to Obasanjo seeking approval to
issue Sunrise a letter of comfort, begin negotiations on the concession and the
source of financing, determine how the government’s proposed 25 percent equity
would be funded, and appoint technical consultants.
Obasanjo wrote on the memorandum on April 9 that he had no
objection to the request but directed the minister to present the matter to the
Federal Executive Council for deliberation.
Agunloye submitted a memorandum to the council on May 15.
The proposal came up at the council’s meeting of May 21, but its consideration
and the extent of any approval became central points of dispute in the
arbitration.
Obasanjo’s position was that the council did not approve the
contract and that he ordered the memorandum withdrawn. Sunrise relied on a
letter issued by Agunloye on May 22, 2003, as evidence that it had been awarded
the project on a build-operate-transfer basis.
That disputed letter became the foundation of Sunrise’s
multibillion-dollar arbitration claim against Nigeria.
TRIBUNAL EXAMINED ATIKU’S INFLUENCE
Sunrise and Adesanya argued that Atiku lacked the political
power to influence the purported May 2003 award. The tribunal found that
contention implausible.
It noted that Atiku was directly involved in discussions
about Mambilla from at least 2001, hosted a meeting with Sunrise and its
Chinese partner, and led the Nigerian delegation to China in 2002.
The tribunal also relied on a February 2003 US diplomatic
cable describing Adesanya as an “Atiku insider” and an associate of the
vice-president. The cable recounted a late-January conversation in which
Adesanya reportedly told US officials that Atiku had extracted major
concessions from Obasanjo during negotiations over their re-election ticket and
would become the “de facto head of government” if they won.
Adesanya did not deny the substance of his comments,
although he said the cable represented only an extract from a much longer
conversation. He said his point was that Atiku should not be discounted because
of his political strength in northern Nigeria.
The tribunal concluded that Atiku possessed a considerable
degree of power and influence in the federal government during the first half
of 2003.
However, Atiku was not a party to the arbitration, did not
testify before the tribunal and, on the materials reviewed for this report, was
not shown to have personally directed the transfer to Douglas’s account. The
tribunal’s findings addressed whether Adesanya’s explanation for the payment
was credible in the context of Sunrise’s contractual claim and Nigeria’s
corruption allegations.
SUNRISE LOSES, FACES COSTS
Sunrise commenced its first arbitration against Nigeria in
2017, seeking about $2.35 billion for an alleged breach of the 2003 agreement.
The parties later negotiated a settlement under which
Nigeria was to pay the company $200 million. A further dispute arose over the
settlement, with Sunrise seeking another $200 million as a default payment,
bringing its principal demand in the second arbitration to $400 million before
interest.
In its final award, the ICC tribunal dismissed Sunrise’s
claims and rejected its request for an order compelling Nigeria to pay the $200
million settlement sum and the additional $200 million default amount.
It also held that Adesanya was bound by the arbitration
provisions in the settlement agreement and its addendum, and that it had
jurisdiction over Nigeria’s counterclaim against him and Sunrise.
The tribunal ordered Sunrise and Adesanya to reimburse
Nigeria for 75 percent of its legal fees and expenses. Nigeria’s recoverable
costs were put at $11.82 million, of which $2.5 million was to come from funds
held in escrow by the ICC. The balance of about $9.32 million is payable by
Sunrise and Adesanya, with interest.
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