Arik Air, Arumeni, directors indicted for money laundering
ARIK Air Limited, its chairman, Mr Johnson Arumeni-Ikhide and directors have been indicted for money laundering by the Economic and Financial Crimes Commission (EFCC) and recommended for criminal trial.
The commission, which investigated the company for tax evasion totalling N5 billion, would also probe the sources of the firm’s funding.
Apart from Arumeni, others on the company’s board are the vice-chairman, Senator Anietie Okon, Mr. Michael McTighe, Olubiyi Sangowawa, Mr. Michael Arumeni-Ikhide, Mr. Dare Mabiaku, among others.
The commission, in its investigation which commenced on August 3, 2009, listed the laws breached by the company as;
•Money Laundering Violation: S. 14(a) of the Money Laundering Act - Money Laundering Offence predicated on the original illicit/illegal act of conversion of VAT (brings in the provision of 5.18 of Money Laundering Act to make the directors liable.
•Stealing/conversion: Contrary to S. 383(1), (2) (2)(e) and S. 387(f) of the Criminal Code Act and punishable under Section 390.
•Value Added Tax Act: Failure to keep proper records and accounts under Section 9 of Value Added Tax Act and punishable under S. 29 of the same act.
•Failure to submit returns contrary to S. 31 of Value Added Tax Act.
•Evasion of Tax contrary to S. 22 of Value Added Tax Act. iv. Effect of non-remittance of tax contrary to S. 31 of Value Added Tax Act.
•Offence by body corporate contrary to S. 33 of Value Added Tax Act - which makes every Director, Manager, Secretary, Management severally guilty of the Offence
“Investigation revealed that Arik Air Limited is a habitual tax evader. Their evasion history dates back to the period of commencement. Their account books are understated. The chairman does not consider tax as part of the company’s obligation. They collect tax on behalf of government and invest it in their business. They accepted liability with a payment plan which they refused abide with.
“For the reason that this investigation is holistic, I request your permission to allow it probe into the company’s source of funds. The company had 24 aircraft in its fleet when we commenced investigation about a year ago, information available to us reveals that it has acquired six more, yet the tax liability remains unpaid,” the commission said.
It was also revealed in an investigative report by the commission that the chairman of the commission, Arumemi-Ikhide, shunned four summons on him for interrogation in the course of the investigation.
Nigerian Tribune had reported, quoting a top source in the commission, that he finally appeared for interrogation on July 6, 2010, only to discover that he shunned the commission as usual, with only the acting Managing Director appearing for interrogation.
The commission had noted that “On August 10, 2009, the team commenced computation of the company’s tax liability and concluded on August 12, 2009.”
“The team invited the General Manager, Finance, Mr Steven Gharoro, on August 12 and 13, 2009 and his statement was obtained under the word of caution. He was, thereafter, released on bail.
“The Deputy Managing Director, Mr Chris Ndulue, was also invited by the commission on August 13 and 14, 2009 and his statement was accordingly obtained under the word of caution. He was also released on bail to a reliable surety.
“The chairman and managing director of the company were invited for a meeting on August 18, 2009, as the letter was delivered through the deputy general manager.
“On August 18, the vice chairman, Senator Anietie Okon, came in to represent the chairman at the meeting. He was cautioned and released on bail. He promised, through a written statement, to come with him on August 26, 2009.
“On that date, the chairman failed to honour our invitation. No reason was given for this action. The company maintained complete silence and did not deem it necessary to write to the commission.
“On August 31, 2009, the commission received a letter from the company that the chairman will be coming on September 4, 2009. He failed to appear on the said date.
“On September 7, 2009, the commission wrote a letter inviting the company’s chairman and his deputy managing director for a meeting in Abuja on September 10, 2009, this invitation was not honoured by the company.
“An investigation activities letter was written to NCAA and FAAN on June 18, 2010 for the current liability of Arik Air Limited to enable the team to conclude its investigation.
“The acting managing director was invited to Abuja on July 6, 2010, his addition statement was obtained and released on self recognisance to return on July 7, 2010 for processes but he never appeared.”
The commission, in its investigation, came up with findings which include:
•That, by its nature, the company is liable by law to pay such taxes as Company Income Tax, VAT, Withholding Tax, Education Tax, Personal Income Tax, Capital Gains Tax, Passenger Service Charge (PSC) and Ticket Sales Commission (TSC) to the government.
•That the company charges VAT, PSC, TSC, and CSC on all their transactions but do not remit to the appropriate authorities.
•That the company is on tax relief from company income tax and education tax for the period under review.
•That the company has been deducting but has not remitted withholding tax amounting to N155,917,998.15 for the period under review.
•That the company only remitted a negligible amount of N100 million out of its total VAT liability of N1,793,077,594.39 since they commenced operation in 2006.
•That the company has outstanding payments of PSC to FAAN of N221,406,446.61 as at October 2009.
•That the company has outstanding payments to NCAA in the form of TSC totalling N1,534,812,141.99
•That the company has outstanding payment N443,368,738.71 to NAMA as at October, 2009.
•That the company’s account is grossly understated but we were still able to come up with a liability of over 5 billion.
•That Arik Air Limited is a habitual tax evader.
•That the commission received a letter dated February 14, 2010 from Arik accepting a tax liability of VAT and Withholding Tax of N1,750,370,455.04, against our reconciled sum of 1,848,995,592.54 (they appealed for a deduction of N98,625,137.5 based on technical reasons).
•A payment plan was communicated to the commission through a letter dated 12th April, 2010 for which the sum of 150 million was to be paid by the end of April 2010 and another N100 million subsequently until the total amount is liquidated.
•That the company treats tax and levies matters with levity evidenced by their non-remittance to the regulatory authorities.
The commission, however, noted that Arik had not been faithful to its own promise of instalment payment of the accepted tax liability.