CITIBANK SUFFERS WHIMS OF THE WELL-CONNECTED

C O N F I D E N T I A L SECTION 01 OF 03 LAGOS 000216

SIPDIS

SIPDIS

DEPT PLEASE PASS TO JAMES WILLIAMS, OPIC
DEPT PLEASE PASS TO TDA

E.O. 12958: DECL: 02/20/2017
TAGS: ECPS ECON EINV EIND PGOV PREL NI
SUBJECT: CITIBANK SUFFERS WHIMS OF THE WELL-CONNECTED


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1. (C) Summary: Doing business in Nigeria has its special
challenges, even for a well-known international bank such as
Citibank. In this instance, a loan gone bad has turned into a
criminal case with Citibank and its top officials as
defendants. Although Citibank received a civil court judgment
against the defaulting debtor, that debtor used his political
connections to initiate criminal proceedings against Citibank
in an effort to avoid debt payment. It has taken
cabinet-level intervention to bring some reason to this
rather peculiar affair. However, this matter, which has been
turned on its head by an incessant, politically-connected
debtor is not yet over. End summary.

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Background
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2. (C) Chief Mike Emerah, well-known and flamboyant owner of
a transport company in Anambra State and a lead figure in the
Anambra State chapter of the National Association of Road
Transport Owners (NARTO),in 2000 obtained a loan from
Citibank for the purchase of a fleet of imported buses. Loan
collateral was the fleet of buses. Things started going awry
when Emerah was caught by authorities attempting to clear the
buses through customs using fraudulent documentation so as to
reduce customs charges. Because of this brush with customs
and other complications, Emerah was unable to pay the loan
installments. Citibank called the loan and Emerah was unable
to cure the default. Consequently, Citibank paid the ensuing
fines and took possession of the buses. The buses were
eventually sold, and then Citibank obtained a deficiency
judgment against Emerah for the difference between the total
loan amount and the amount for which the buses were sold.


3. (C) Emerah apparently reached the conclusion that the best
defense was a good offense. In 2004, Emerah launched
accusations that Citibank defrauded him by illegally
obtaining customs clearances and then selling the buses.
Emerah then embarked on an energetic mission to find allies
in his hounding of Citibank. His first entreaty was to the
Economic and Financial Crimes Commission (EFCC),which did
not pursue the case. Emerah then approached the State
Security Service (SSS),where he was advised that he was in
the wrong and that he should satisfy his debt to Citibank.

4. (C) Undeterred, Emerah evidently began to seek a political
solution to his legal predicament. Apparently, he found a
sympathetic ear attached to someone in the office of Dr. Andy
Uba, Special Advisor to President Obasanjo. Uba is also the
PDP gubernatorial candidate for Anambra State, Emerah's home.
Uba's youngest brother, Chris, has a longstanding patron
relationship with Anambra's NARTO chapter. Once the police
and the attorneys in the Directorate of Public Prosecution
(DPP) Office were apprised that Emerah was known to the Uba
family, the wheels of justice started to spin in a rather
burlesque manner. A foreign ministry official told us that
after a DPP attorney was summoned to meet an official in Dr.
Uba's office, the DPP and police started giving their
attention to Citibank with an eye to taking the bank to count
and to arresting its top officials. Charges were filed and
arrest warrents were issued. Citibank suddenly had turned
from civil action creditor to criminal court defendant.


5. (C) A local court issued a bench warrant for Citibank
Managing Director (MD) Emeka Emuwa,s arrest after
information was presented that Citibank officials refused to
heed a court summons. However, Emuwa explained to us he
received no notice of such a summons and had seen no
explanation of the charges against him.

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Citibank Is Dogged By A Dissatisfied Customer
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6. (C) On February 13, police officers suddenly appeared at
the bank head office, asking for Emuwa. A quick-thinking
member of his staff had the presence of mind to divert the
officers from Emuwa's office. Emuwa was apprised of the
officers' presence. The diversion orchestrated by his staff

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gave him time to access a secondary exit and leave the
premises. Perturbed at not apprehending Emuwa, the officers
arrested three other bank officials, including the bank's
in-house attorney, although these officials were not subject
to any outstanding warrants. (For days after, Emuwa stayed in
seclusion and did not return to the bank.) The police stated
they would not release the arrestees unless Mr. Emuwa
appeared. Knowing he would be arrested, Emuwa did not appear
at the police station. Emerah had arranged for press to be at
the police in order to write a story on Emuwa's arrest.
Although Emerah did not net the fish he most wanted, negative
press stories were published in the local media.

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Despite High-Level Intervention, Matter Persists
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7. (C) Upon being contacted by Emuwa, the Consul General
placed phone calls to Police Inspector Ehindero (IGP) and to
the Assistant Inspector General Okiro, whose mobile phones
were conveniently turned off. With this avenue closed,
working together with local Citibank officials, we contacted
EFCC Chairman Nuhu Ribadu, who promised to look into the
case. We also contacted Federal Capital Territory (FCT)
Minister El-Rufai and the Special Advisor to the Foreign
Minister, who, in turn, engaged the Foreign Minister. Foreign
Minister Joy Ogwu subsequently spoke with Attorney General
Bayo Ojo, who was out of the country at the time. Ojo
discovered that attorneys within the DPP connived with Emerah
to file the unfounded criminal case against Citibank.


8. (C) The Foreign Minsiter and FCT Minister brought this
issue directly to the President. President Obasanjo ordered
the police and DPP to desist from arresting Citibank
officials. Upon further looking into the case, the President
ordered Chief Emerah's arrest, which was done. During this
period, Dr. Uba disavowed any involvement and stated he was
unaware that anyone from his office had helped instigate the
criminal case. Believing the case had been settled, the
President then diverted his attention to other matters, such
as the impending election. With the President's attention
elsewhere, the case was resurrected.


9. (C) During the last week of February, the Inspector
General of Police summoned both Citibank officials and Emerah
to produce all documentation supporting their claims. It
appeared the IGP was still attempting to help Emerah. During
their meeting, the IGP recommended to Citibank that they
should "settle with Emerah". Citibank MD Emuwa coincidentally
is also from Anambra State and is younger than Emerah. DPP
officials, police and others have pressed Emuwa that he was
not giving proper social deference to Chief Emerah. Emuwa's
retort has been that social status does not obliterate a debt
legally contracted and that Emerah, as the judgment debtor,
should be seeking to settle with Citibank, not the obverse.
Apparently still assisting Emerah, the DPP filed new criminal
charges against Citibank. Emuwa stated the new charges were
so sloppily crafted that the DPP inaccurately accused him of
engaging in fraud although he never had any personal
involvement in the loan transactions and was not in Nigeria
at the time. The DPP knows he was not involved in the matter
yet charged him nonetheless. Emuwa questioned how they could
charge him with criminal liability for something he did not
do. He is now considering suing the DPP attorneys for
malicious prosecution.

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Comment
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10. (C) Despite widely-touted economic reforms aimed at
creating a better business operating environment, the
country's highly personalized legal system can make simple
business transactions and legal decisions subject to the
caprice of well-connected adversaries. Citibank, which is no
minor player itself, fell victim to one such player.


11. (C) With the elections on the horizon, politicians are

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increasingly likely to influence the judicial process to
favor the likes of a Chief Emerah who can mobilize votes. In
this case, the police and judiciary were, at the least,
encouraged, if not pressured, to pursue Citibank.
Fortunately, Citibank has its own political connections as
well as having justice on its side in this matter. Yet, even
presidential intervention has not ended this matter. This
could have been a martial blow for a smaller firm that did
not have the clout and connections of Citibank. For the time
being, business as usual remains an unusual exercise in
Nigeria. End comment.
BROWNE