Thursday, May 28, 2009

Nigeria Charges Three With $110 Million Fraud At Nitel

LAGOS (Reuters) - Nigeria's anti-corruption police charged the head of local conglomerate Transcorp and two others on Wednesday with fraud and embezzling about $110 million belonging to the ailing former telephone monopoly Nitel.
The Economic and Financial Crimes Commission (EFCC) told a Federal High Court in the capital Abuja that Transcorp Managing Director Thomas Iseghohi and two other top officials embezzled the money through the award of dubious contracts, payment of legal and consultancy fees and media adverts.
The three accused pleaded not guilty to 32 charges brought against them by the EFCC.
Trial judge Anwuri Chikere ordered that they be remanded in prison and adjourned the case to June 9 when their bail applications would be heard.
Transcorp bought 51 percent of Nitel and mobile unit MTEL for $500 million in August 2006, but has failed to raise enough cash to revamp its infrastructure, prompting the government to relaunch efforts to find a new core investor in March.
Nigeria had struggled to find credible investors for Nitel, which is heavily indebted and whose fixed line customers have fallen to less than 100,000 from five times that figure in 2001, before Transcorp acquired the company in 2006.
Nigeria first tried to sell Nitel in 2001, but the preferred bidders failed to pay the $1.3 billion price by a stipulated deadline.
Nigeria came close to selling the company in late 2005 to Egypt's Orascom Telecom, which had experience in countries with infrastructure problems, but rejected the firm's $256.5 million offer as too low.
The latest deadline for bids falls on May 30.

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