Telecom Investment Turned Into a Prolonged Legal Dispute
Nine years after a controversial financing deal involving First City Monument Bank (FCMB) and the African Export-Import Bank (Afrexim Bank), uncertainty still surrounds the whereabouts of nearly $5 million linked to EMIS Telecoms.
The funds were initially released to support the company’s infrastructure expansion, with FCMB acting as the intermediary. What appeared to be a routine commercial arrangement, however, quickly fell apart. Payments were reportedly made to a foreign contractor for telecom equipment that was never delivered, effectively crippling the project before it could take off.
Without the expected infrastructure in place, EMIS Telecoms was unable to commence operations or generate revenue, leaving investors exposed and the company in a prolonged state of uncertainty.
The transaction eventually attracted the attention of the Economic and Financial Crimes Commission (EFCC), which launched an investigation into the handling of the funds. Documents reviewed by Entrust Media News indicate that the anti-graft agency found evidence of mismanagement and fraud, concluding that FCMB, Afrexim Bank, and COM-DEV conspired to defraud Em-International System Nigeria Limited (EMIS) of approximately $5 million.
A 2017 memo signed by Bawa Usman Katungo, then Head of the EFCC’s Bank Fraud Unit in Lagos, also identified COM-DEV and several individuals as key actors in the alleged scheme. According to the EFCC, Afrexim Bank played an active role in the transaction, while both financial institutions failed to exercise due diligence or comply with the conditions outlined in the tripartite agreement governing the disbursement of funds.
Investigators found that Afrexim made full payment to COM-DEV just one day after the agreement was signed an action described as a clear violation of the agreed terms. Despite receiving full payment, COM-DEV has yet to supply the telecom equipment, further reinforcing the EFCC’s conclusion that EMIS did not receive value for the funds disbursed on its behalf.
The report further stated that all three parties FCMB, Afrexim Bank, and COM-DEV benefited from the transaction, while EMIS was left bearing the losses. It described the actions of the institutions as marked by negligence and a failure to uphold professional standards, particularly in discounting promissory notes tied to invoices without confirming delivery of the equipment.
According to the EFCC, this lack of diligence significantly undermined EMIS as a business and contributed directly to the collapse of the equipment supply contract. The agency recommended that FCMB be held liable for corporate negligence and conspiracy, and that it refund all funds improperly deducted from EMIS accounts.
It also advised that Afrexim Bank should reimburse FCMB for any loan repayments made, including accrued interest, while pursuing recovery from COM-DEV through legal or arbitration channels. Notably, the EFCC pointed out that EMIS was not a signatory to the tripartite agreement and therefore lacked the legal standing to independently seek redress against COM-DEV.
Further findings established what the EFCC described as a strong nexus of criminal conspiracy among the parties, citing the rushed discounting of promissory notes just a day after the agreement was signed as evidence of intent to defraud. The commission also noted that Afrexim processed payments for both equipment supply and installation on the same day, despite the absence of delivery.
In its response, FCMB acknowledged facilitating the $5 million facility for EMIS through Afrexim Bank and confirmed opening accounts for the company. The bank, however, maintained that EMIS later became unable to service the loan, prompting the creation of commercial papers and bankers’ acceptances to manage the exposure.
The EFCC report also named several individuals for possible prosecution, including Ladi Balogun, Obaseki, Biodun Oyapero, Prof. Benedict Oramah, Keith Ainsworth, and Anita Davis, citing their alleged roles in the transaction.
Following the investigation, former President Muhammadu Buhari reportedly directed the Central Bank of Nigeria to ensure implementation of the EFCC’s recommendations. A memo signed by former Attorney-General of the Federation, Abubakar Malami, confirmed that the directive was communicated for necessary action.
However, findings by Entrust Media News suggest that the directive was not enforced, with FCMB yet to comply with the recommendations outlined in the EFCC report.
For many observers, the case has become emblematic of deeper systemic challenges within Nigeria’s financial and regulatory environment. It underscores the gap between investigative findings and actual enforcement, raising persistent concerns about accountability, investor protection, and institutional credibility.
Until the matter is fully resolved, it is likely to remain a reference point in ongoing discussions around governance, transparency, and the effectiveness of oversight mechanisms in Nigeria’s financial sector.
