Energy and Metals Industries Limited (EMI) has dismissed allegations of fraud against its Co-Founder, Dr. Innocent Ezuma, describing recent media reports linking him to the alleged diversion of about $120 million belonging to foreign investors as misleading and lacking the commercial, contractual and regulatory context.
In a statement in Abuja, the company’s management maintained that the business relationship between Ezuma and the foreign investment partners was established through formal investment and corporate agreements for the development of mining, energy and industrial projects in Nigeria, rather than a personal financial transaction.
Last month, the Economic and Financial Crimes Commission (EFCC) announced Ezuma’s arrest over allegations of defrauding a Ukrainian investor of more than $120 million.
According to the spokesperson of the anti-graft agency, Mr. Dele Oyewale, the 57-year-old businessman was arrested at his Abuja residence on 19 October and remained in the agency’s custody.
EFCC said that the businessman is being investigated over allegations of advance fee fraud, criminal breach of trust, criminal conversion, obtaining money under false pretences, theft and money laundering.
In its statement, EMI, however, explained that the relationship between Ezuma and the foreign investment partners dated back to a Memorandum of Understanding (MoU) executed on 23 March 2008, in Kyiv, Ukraine, which provided for the establishment and development of the company, including the acquisition of mineral exploration and extraction licences and the development of mineral production and processing facilities.
According to the company, the MoU contemplated an investment portfolio of up to $1.5 billion, with approximately 20% of the proposed investment to be provided by the foreign investor through interest-free credits, while the balance was expected to be sourced from independent financial institutions.
The company said that the arrangement was subsequently complemented by a corporate agreement dated 30 January 2013, which provided for the development of a coal-fired power generation project at Itobe, Kogi State.
EMI argued that these agreements and the associated corporate arrangements are essential to understanding the nature of the transactions between the parties and should be considered before drawing conclusions about the allegations.
Addressing suggestions that the mining projects were never implemented or that little was achieved despite the investment relationship, EMI said that substantial regulatory, exploration and technical activities were undertaken over several years.
The company disclosed that the old Federal Ministry of Mines and Steel Development (from which the Ministry of Solid Minerals Development has been created), granted reconnaissance permits, exploration licences and mining leases covering copper, gold, lead and zinc.
It stated that the 25-year mining lease became effective on 10 September 2014, and remains valid until 9 September 2039.
EMI further disclosed that exploration activities in Kogi State included 57 boreholes covering 6,025 metres, 11 trenches covering 970 metres and 78 test pits, alongside geological mapping and geophysical surveys.
In Zamfara State, the exploration programme involved geological mapping, 385 soil geochemical samples, geophysical surveys, trench investigations and shallow prospecting works, which produced a preliminary inferred gold resource estimate, the company said.
It also noted that the exploration programmes underwent technical reviews by SRK Exploration Services of the United Kingdom and CSA Global of Australia, including assessments of sampling procedures and quality assurance protocols.
According to EMI, the technical studies identified additional drilling, metallurgical testing, environmental assessments and full feasibility studies as necessary steps towards final investment decisions.
However, it maintained that the work already undertaken demonstrated that the projects had progressed beyond the conceptual stage.
On the power generation component, EMI disclosed that Itobe-1 Coal Power Limited obtained a Nigerian Electricity Regulatory Commission (NERC) licence for the development of a 300-megawatt on-grid coal-fired power generation project.
It added that the licence became effective in December 2014 and was subsequently renewed until 29 September 2031.
The company said the mining leases, exploration activities, technical assessments and power generation licence constituted tangible evidence of the regulatory and project-development processes undertaken in pursuit of the original investment objectives.
The company also addressed allegations concerning the purported diversion of investment funds to companies and individuals allegedly associated with Ezuma, including members of his family.
EMI rejected attempts to present such allegations as established facts without a comprehensive examination of the transactions, their commercial purposes, the entities involved and the relevant financial records.
It maintained that business or family associations, in themselves, do not constitute evidence of financial misconduct, adding that any allegations concerning specific financial transfers should be supported by verifiable evidence and assessed within their appropriate corporate and commercial context.
The company said it remained prepared to provide relevant corporate, investment and project documentation through appropriate lawful processes.
On references to the defunct Jos Steel Rolling Company in media reports, EMI clarified that its transaction team led the acquisition of the company’s assets in 2005, three years before the investment arrangement with the foreign partner was formalised in 2008.
It explained that Zuma Steel West Africa Limited acquired the assets of the defunct Jos Steel Rolling Company Limited from the Federal Government following a court-supervised liquidation process guided by the Bureau of Public Enterprises (BPE), with an asset purchase agreement executed.
The company also highlighted the longstanding challenges associated with unreliable and unaffordable electricity supply in Nigeria, noting that these have constrained the operations of energy-intensive industries, particularly mining, mineral processing, steel production and manufacturing.
According to EMI, such operating realities are important considerations in assessing the commercial progress and challenges associated with large-scale industrial and energy projects in the country.
On the legal dimension of the matter, EMI disclosed that the commercial relationship between the parties had resulted in ongoing judicial proceedings.
The company identified LCIA Arbitration No. 194203, Tooley Property Company Limited v. Energy and Metals Industries Limited, as one of five arbitral awards dated 17 January 2020.
It stated that since March 2020, the Zuma companies had been challenging the five arbitral awards before the High Court of the Federal Capital Territory, Abuja, on grounds including alleged illegality, misconduct and lack of jurisdiction.
EMI also disclosed that separate applications seeking recognition and enforcement of the awards, including the award involving the company, were filed in another suit, which the company and its associates have opposed.
The company said it would refrain from litigating the merits of the dispute through the media and would allow the courts to determine the matters properly brought before them.
It further stressed that a commercial dispute, the existence of an arbitral award and allegations of criminal wrongdoing are distinct legal issues that should not be conflated.
On the reported investigation by the EFCC, EMI acknowledged the commission’s statutory responsibility to investigate allegations of financial and economic crimes.
It stated that Ezuma remained willing to cooperate with lawful requests from the relevant authorities and that the company had no intention of obstructing any lawful investigation.
EMI, however, emphasised that allegations under investigation should not be presented as established findings of guilt, noting that Ezuma had not been convicted of any offence in connection with the allegations.
The company invoked the presumption of innocence guaranteed under Section 36(5) of the Constitution of the Federal Republic of Nigeria, urging the media and members of the public to exercise caution in drawing conclusions while the relevant issues remain subject to investigation and judicial processes.
The company called on media organisations to ensure that their reporting distinguishes allegations from facts established by a court of competent jurisdiction, takes account of the executed investment agreements and recognises the regulatory and technical milestones recorded in the development of the mining and power projects.
It also urged the media to acknowledge the ongoing judicial proceedings and provide affected parties with a fair opportunity to respond to material allegations.
EMI warned that the widespread circulation of unverified or materially misleading reports could cause lasting reputational damage to the company, its leadership, employees, business partners and other stakeholders.
