Post mortem of N2.9b trial, conviction of ex-Eunisell CEO and firm

The Federal High Court, Lagos, in a bold statement against diversion, conversion and breach of trust, sentenced a businessman, Kenneth Amadi, to 18 months imprisonment over N2.9 billion fraud.

The court found, among others, that Amadi, while an employee of Eunisell Limited owned by a businessman, Chika Ikenga, abused his position and diverted the proceeds of sale of the company’s goods to a firm operated by him and his wife.

The case highlighted the growing problem of trust deficit among highly-placed employees handling sensitive employer business. In the year 2000, seven years after Ikenga set up Eunisell Limited in Victoria Island, Lagos, he hired Amadi – an ambitious university graduate fresh out of the National Youth Service Corp (NYSC) programme – as a salesman.

As Eunisell’s chemicals importation, distribution and manufacturing business grew, so did Ikenga grow the welfare and work conditions of his employees, including Amadi, who soon rose to the position of Chief Executive Officer (CEO) with a salary of N2.5million plus $4,000 monthly (according to his employer), an official Lexus SUV, business class tickets for travels, and free medical care abroad, all paid for by Eunisell, as of October 2016.

The convict left Eunisell on October 28, 2016, as CEO following an enquiry by one of Eunisell’s foreign suppliers and partner, Lubrizol, which manufactures lubricant used in manufacturing engine oils and other types of lubricant used in vehicles.

Lubrizol wrote to the convict and copied Ikenga in July and told them that their competitor called Oronite had appointed a distributor in Nigeria and they wanted him to find out about this local distributor called A.B.D. Energy Solutions Ltd.

Ikenga said Amadi did not get back to them with the information and gave no reason for that. He stated that he then asked his lawyers to find out from the Corporate Affairs Commission (CAC) the particulars of the company so that he could furnish the foreign firm with the information.

According to him, the search from the CAC revealed that his CEO, Amadi was the owner, shareholder, promoter and director of A.H.D. Energy Solutions Limited. Ikenga said he was shocked, considering all he was doing for his CEO.

Ikenga further stated that the convict had been going to the Research Development and Technology of his company’s suppliers in the Britain for training. He stated that the research centre “was the heart of his business, therefore the defendant would have been sharing market information with Oronite.” He also said that when the convict was confronted, he resigned on October 28, 2016.

According to Ikenga, who was the Prosecution Witness 1 (PWI) in the trial, upon the defendant leaving, an audit was carried out to reconcile the accounts of the big companies he was managing.

He stated that the audit revealed that payments that had been coming into PWI’s company’s bank account were from the convict and his firm, IDID Nigeria Ltd. PWI said he wrote to the bank on why the payment coming into his company’s account did not have a narrative or details of the buyers. The bank wrote back, giving the details of the payer, who were Amadi and IDID.

“On further search at the CAC, it was revealed that the 2nd defendant (IDID Nigeria Limited) was owned by the 1st defendant and his wife being both directors and shareholders,” he told the court.

PWI said he reported to the Police and investigation revealed that the 1st defendant was receiving PW1’s company payment from A-Z Petroleum and Ammasco International for the goods that PWI’s company sold to them.

PW1 said the company sent goods to A-Z Petroleum and Ammasco International via waybill and the company gave the convict the invoices to send to them, of which he would give the customers his own bank account and retain the money paid into it for a while before remitting it. PW1 said that the convict’s duty as CEO did not empower him to pay money into his account as he has no mandate to do so.

PW1 testified that he wrote to his bankers because the payment was coming without details of the payer and it was discovered that the persons paying money into the bank account were Amadi and IDID who received the money from his two main customers A-Z. Petroleum and Ammasco International, totalling over N2.9billion.

Ikenga told the court that Amadi used Eunisell’s funds to operate IDID. He alleged that Amadi altered the invoices to Ammasco and A-Z Petroleum to enable him to receive Eunisell’s payment “without authority, mandate and approval and diverting funds to build up his profile and credibility. PW1 also testified that the convict forged documents to carry out fraudulent activities.”

Ikenga further testified that Amadi made payments into the company’s account without narratives from January 1, 2016 to October 28, 2016, and from January 2012 to December 31, 2015, which were discovered during the police investigation.

It was on account of those discoveries that the Federal Government through the office of the Attorney General Federation (AGF) filed a five-count criminal charge marked FHC/L/355C/2019 against Amadi and IDID on October 2, 2019, for allegedly obtaining Eunisell’s N2.9b by false pretence and with intent to defraud from A-Z Petroleum Ltd and AMMASCO International Ltd.

He was also accused of forgery of invoices and waybills, as well as suppression of data concerning financial transfers to Eunisell “with intent to confer economic benefits” on himself.

Counts 4 and 5 of the charge read in part: “That you Kenneth Ndubisi Amadi and IDID Nigeria Limited, sometime in 2016, in Lagos, while being trustees of the sum of N2.9b belonging to Eunisell Ltd did convert same without authority to create sufficient deposits to promote the credibility of your own company (IDID Nig Ltd) and you thereby committed an offence contrary to Section 434 of the Criminal Code Act, 2004 and punishable under the same Section of the Act

“That you Kenneth Ndubisi Amadi and IDID Nigeria Limited, sometime in 2016, in Lagos, while serving as the Chief Executive Officer of Eunisell Ltd, at Lagos, did receive the sum of N2.9 billion belonging to Eunisell Ltd and with intent to defraud, omitted from making full and true entry thereof in the books and accounts of the company and you thereby committed an offence contrary to Section 435 of the Criminal Code Act, 2004 and punishable under the same Section of the Act.”

The FG arraigned him and his firm on June 25, 2021. He pleaded not guilty. The trial commenced on October 15, 2021, with the prosecution calling Ikenga as PW1 to open its case. It also called several other witnesses who corroborated some of PW1’s testimony.

Other witnesses included Eunisell’s Finance Manager, Phillip Odekina, who had worked with the firm for 10 years, and testified that no one had the right to nominate any account details, other than Eunisell’s, to a customer, except with the approval of the firm’s board of directors.

But in his defence, Amadi through his lawyers prayed the court to hold that he had no case to answer. He contended that no document said to be in possession of the prosecutor was tendered to show that he defrauded Eunisell “of the bogus amount of N2.9b…” He also submitted that the charge was an abuse of court process, adding that PW1 and PW2 gave contradictory testimonies, regarding the auditing of Eunisell’s banking activities.

The defendants also submitted that Ikenga claimed N2.9b at a time, “but later claimed that N103 million was unaccounted for…” They said that based on the evidence of PW1, 2, 3 and 4, “the prosecution’s evidence is replete with contradictions, which resulted in the prosecution’s failure to prove its case beyond reasonable doubt.”

The defendants urged the court to hold that the prosecution failed to prove essential ingredients of the offences beyond reasonable doubt and therefore, urged the court to dismiss the case.

However, the court disagreed with him. On January 30, 2023, Justice Ambrose Lewis-Allagoa convicted and sentenced Amadi to 18 months imprisonment. Justice Alagoa arrived at the decision, after finding him guilty of counts 4 and 5 of the charge.

The court held that the conviction was without an option of a fine. It equally ordered that IDID Nigeria Limited be liquidated with immediate effect. Amadi was, however, discharged on counts 1, 2 and 3.

Justice Allagoa held: “I am in agreement with the submission of counsel for the prosecution in paragraph 9.1. of his final argument that the position of the 1st defendant occupied as the Chief Executive Officer of Eunisell, that he is in a position of a trustee even if he is not expressly so appointed.

“He owes the company the duty of care to discharge his duties honestly and conscientiously and not to act in a dishonest manner by receiving the company’s invoices but concealing them and instead deciding to transact with the company’s customers via telephone and also without authorisation nominating the account of another company IDID Nigeria Ltd owned by himself and his wife as shareholders to the customers to make payments due to his employer Eunisell for goods supplied.

“More particularly, the evidence of the accountant of AMMASCO International is demystifying to the defendant’s case when he testified that since they started doing business with Eunisell represented by Amadi, they never saw the invoice of Eunisell Ltd, they only received Eunisell’s waybills without invoice, while all negotiation about the price of goods supplied was unilaterally negotiated by the 1st defendant with word of mouth on the telephone.

“The mere act of diverting the proceeds of the sale of Eunisell’s goods (his employers) and as Executive Officer to a company where he is the alter ego different from his employer’s account constitutes conversion.

“I have, therefore, come to the conclusion that the 1st defendant and his company IDID Nigeria Limited are guilty as charged in Count 4, the prosecution having proved its case beyond reasonable doubt.”

The judge held that there was an obvious “intention to defraud.” Consequently, count 5 was also proved beyond reasonable doubt by the prosecution and the defendant was accordingly found guilty as charged.

In passing sentence, the judge said: “I have heard counsel for the defendant plead allocutus, I have also taken cognisance of the fact that the defendant is a first-time offender and all the other circumstances of the case.

“Ordinarily, the defendant is supposed to serve seven years imprisonment in each of the two-count charges in count 4 and 5, but I have looked at the side of mercy and the defendant is hereby sentenced to 18 months imprisonment in count 4 and 5 respectively.

“All the sentences run concurrently and there shall be no option of fine. As for the 2nd defendant, I hereby liquidate the company having been found guilty of the offence.

Dissatisfied, the convict lodged an appeal against his conviction and filed for bail pending appeal, which was graciously granted by the court. All eyes will now be on the three wise men to know if the conviction stands or not.