A hedge fund registered in the Cayman Islands, an Irish businessman and an English lawyer will split between themselves and their associates more than $11bn of Nigeria’s public money if the West African state loses a landmark case before England’s High Court.
Internal documents and High Court testimonies seen by The Africa Report reveal that an amount equivalent to eight times Nigeria’s 2023 federal health budget could end up in the hands of just one private company and eight individuals – an extraordinary transfer of wealth that would threaten Africa’s biggest economy while making billionaires out of several beneficiaries.
Nigeria is indebted to Process & Industrial Developments Limited (P&ID) since January 2017, when an arbitration tribunal in London ruled that the state must pay $6.6bn to P&ID in compensation for the government’s breach of a gas contract with the offshore firm. That is equivalent to all the theoretical profits that P&ID might have made over the lifetime of the contract. Nigeria has refused to pay those damages, which have since risen to $11.5bn with compound interest.
‘Monumental effect’
President Muhammadu Buhari’s government said that P&ID had secured the gas contract through corrupt payments. The case dates back to a deal struck in 2010 under which Nigeria’s petroleum ministry agreed to supply gas to a gas-fired power and processing plant to be built and run by P&ID in Cross River State.
But the plant was never built; P&ID complained that Nigeria had not released the land for the project, not the promised gas. Nigeria says it has evidence that the deal with P&ID was fraudulent from its inception.
The government alleges that P&ID bribed officials, including the petroleum ministry’s then head lawyer Grace Taiga, to secure the gas contract, making the deal and subsequent arbitration illegitimate. Both P&ID, which is registered in the British Virgin Islands, and Taiga deny the allegations.
In a two-month trial earlier this year, the government petitioned the High Court to invalidate the arbitration award. The court’s decision is pending.
If Nigeria loses the case, it will be legally bound to pay P&ID what amounts to a third of the country’s foreign exchange reserves.
“In this period where the external debt is high and the revenue coming in is low, coupled with the recent government policy to withdraw subsidy of petroleum prices and the attendant effects on the people, losing this case would have a monumental effect on the economy,” Philip Olomola, professor of economics at Obafemi Awolowo University in Ife-Ife, tells The Africa Report. “It would affect investments and all fiscal decisions, and in the long run it would affect the people, too.”
Meanwhile, the Cayman-registered hedge fund VR Capital and English lawyer Seamus Andrew, who together acquired P&ID in October 2017, would stand to make billions.
But the precise division of the proceeds has long been kept secret. Andrew declined to answer The Observer’s questions on that subject last year.
In a tweet in March, former Nigerian senator Shehu Sani highlighted the lingering opacity.
“If we lose the P&ID case in London Court,” Sani wrote, “$11bn of our money will go to some people whom we never knew.”
Until now.
‘Beyond the dreams of avarice’
VR Capital, which has a controlling stake in P&ID, stands to receive 25% of the proceeds, and Andrew’s company Lismore Capital 75%, as revealed by a shareholders’ deed dated October 2017 that The Africa Report has seen. Lismore’s portion will be split between Andrew and Brendan Cahill, the Irish businessman who co-founded P&ID alongside the now deceased Michael Quinn, according to an undated litigation management agreement between Lismore and Cahill also seen by The Africa Report.
Andrew is to receive 35% of the proceeds and Cahill 40%, as per that contract. Both deals remain valid, Andrew told the High Court under oath in January.
But VR, Cahill and Andrew will likely not be the only beneficiaries. The agreement between Lismore and Cahill stipulates that Cahill will be responsible, from his share, for “any payments” to former employees or associates of P&ID, as well as to Quinn’s family, to whom Cahill recognises “an ethical obligation” because of his and Quinn’s “long personal and professional relationship”.
Cahill told the court that he and Adam Quinn, the son of Michael Quinn, would end up with similar shares of more than $2bn each.
Likewise, Andrew told the court that Lismore felt “a moral obligation” to share its portion of the proceeds with the lawyer Trevor Burke, a nephew of the late Michael Quinn.
“The agreement does not state explicitly that Mr Burke is to receive anything, but I imagine that Lismore will pay him something,” Andrew said. Andrew is the sole owner of Lismore.
Burke, who worked on P&ID’s arbitration lawsuit as co-counsel alongside Andrew, told the court that he expected to receive 10% of the ultimate recoveries. But he recognised that no written agreement supported his claim to a share of the proceeds.
Adding to the uncertainty, Burke said that his share would come not from Lismore, as Andrew had said, but from Cahill.
All three men do, in any case, expect their financial resources to surge thanks to this case. Andrew told the court that his personal wealth stood at “a lot less than 10 million”, and that a legal victory against Nigeria would earn him well over $2bn.
“It would be a huge amount of money,” Andrew commented.
Burke, meanwhile, told the court that he hoped to earn a considerable multiple of his lifetime earnings with this case. For his part, Cahill acknowledged that, if P&ID won, he would receive “riches beyond the dreams of avarice”.
‘Gentleman’s agreement’
Burke is not the only one who hopes to receive money despite not having a formal claim to the award’s proceeds. Neil Murray, a former associate of P&ID, told the court that, in the event that Cahill received $2bn, he would aspire to get a cut of several million.
“You are part of the gang of ‘lads’ and ‘boys’ who is hoping to share in the dishonest bounty. Correct?” Nigeria’s barrister, Mark Howard, asked Murray in February. Murray replied: “Hoping, at best. Yes.”
Grace Taiga, the former government lawyer accused of being in a corrupt relationship with P&ID, also revealed that she hoped to receive a share of the arbitration proceeds.
‘I held no stake, nor did I have any expectation to hold a stake in P&ID and/or to profit from any award to P&ID following the arbitration,’ Taiga wrote in a sworn witness statement in October last year. But when accused by Howard, the barrister for Nigeria, of having lied in that statement, she acknowledged to the court under oath in February: “I do have expectations.”
Asked by Howard how much she expected Cahill to share with her, Taiga said: “I did not put my mind on a particular ceiling.”
Cahill said that he was aware that Taiga expected to receive some of the Nigerian money, but he denied that she was promised a specific percentage.
“I sought to reassure her that she would be looked after to some degree,” he told the court. “I didn’t specify how or when.”
In one document from 2017, Cahill recorded a ‘commitment’ of $200,000 to ‘Grace T’; in another, from 2019, the ‘commitment’ stood at $500,000. The Africa Report has seen both documents. In court, Cahill called these figures “doodles” rather than firm commitments to Taiga.
Commenting on the loose, unwritten arrangements that govern the sharing of some of P&ID’s future proceeds, Helen Taylor, senior legal researcher at the British NGO Spotlight on Corruption, told The Africa Report: “With more than $11bn up for grabs, it’s incredible that those who secured the arbitral award are relying on a gentleman’s agreement to divide the spoils among the very people alleged to have masterminded an elaborate scheme to defraud the Nigerian people. This complete lack of any transparent or formalised arrangement is highly irregular …
“Suspicion is only heightened by the suggestion that a senior government lawyer who had a hand in awarding the lucrative gas contract might receive a payout under this vague deal,” Taylor added.
Two former Nigerian associates of P&ID also expect to receive payouts.
Adetunji Adebayo, a businessman who represented the company in settlement negotiations with the government, stands to receive 10%, Andrew told the court, adding that Cahill should be the one to pay. In a sworn statement dated May 2022 seen by The Africa Report, Cahill wrote that ‘Mr. Adebayo was promised 10% of the income from the arbitration’. But Cahill added: ‘There was and continues to be a lot of uncertainty around the amount (if any) that will be paid out.’
Mohammed Kuchazi, a former National Party of Nigeria politician who assisted P&ID in its relationship with the petroleum ministry, told the court that he believes himself to be entitled to 3% of the $11.5bn, as per an agreement he said he reached with Michael Quinn. In his sworn statement, Cahill confirmed the existence of that deal.
Asked for further comment, Kuchazi’s lawyer, Eric Onokif Ifere, told The Africa Report that his client’s entitlement to “a 3% commission” was supported by a written agreement with P&ID. He declined to share that document.
Nigeria accuses Cahill, Adebayo and Kuchazi of having bribed officials, and Murray of having assisted P&ID’s corrupt practices. P&ID, Cahill, Murray and Kuchazi denied the accusations before the High Court. Adebayo, who did not appear before the court, did not respond to a request for comment.
Nigeria further alleges that P&ID led Taiga to believe she would receive a share of the award in order to keep her from airing what she knew of the company’s criminality.
“They’re keeping you on side now for the purposes of this litigation,” Nigeria’s barrister told Taiga. P&ID and Taiga both deny that charge.
A lapsed deal?
In April, The US Sun reported that ‘two of Hunter Biden’s closest associates’, Jeffrey Cooper and Devon Archer, ‘personally stand to gain hundreds of millions of dollars’ from the realisation of the P&ID arbitration award. The report cited a document shared with The US Sun by Marco Polo, the Trump-aligned organisation famous for publishing data apparently retrieved from a laptop that had belonged to the second son of US President Joe Biden.
That document, ostensibly a ‘consultancy agreement’ between P&ID and Cooper’s company 1800 Industries, set out that P&ID would owe 1800 a 10% share of the recovered award proceeds for ‘assistance to the client towards achieving a settlement of the award’.
Marco Polo has also shared that consultancy agreement with The Africa Report, which has independently confirmed the existence of a contract between P&ID and 1800 Industries that matches the key clauses contained in the document shared by Marco Polo. The Africa Report could not independently verify the existence of a further deal, which, according to The US Sun, granted Archer half of the 10% share owed to 1800.
Cooper and Archer have both done business with Hunter Biden. Joe Biden’s son has no known ties to the P&ID case.
Seamus Andrew, the P&ID shareholder, told the High Court in January that the 10% deal with 1800 was superseded by the litigation management agreement between Lismore and Cahill, which Andrew said entered into force in May 2020. That agreement made no allocation for 1800.
(The Africa Report)
