Vaswanis get billions on Jonathan’s last day in office

The Stallion Group, which is owned by the controversial businessmen Vaswani Brothers, have been fighting since late last year to evade paying N17 billion in import duty slapped on them by the Nigeria Customs Service [NCS] for exceeding their 2014 rice import quota.Former Minister of State for Finance Ambassador Bashir Yuguda conveyed Jonathan’s approval of […]

The Stallion Group, which is owned by the controversial businessmen Vaswani Brothers, have been fighting since late last year to evade paying N17 billion in import duty slapped on them by the Nigeria Customs Service [NCS] for exceeding their 2014 rice import quota.
Former Minister of State for Finance Ambassador Bashir Yuguda conveyed Jonathan’s approval of the new 2015 quotas to NCS in a letter with reference F.4569\Vol V\295 dated May 28, 2015. Yuguda said the approval “was based on the recommendation of the inter-ministerial committee set up to review the policy.” The inter-ministerial committee itself was hastily set up by former Vice President Mohammed Namadi Sambo in mid-May following strong lobby by the Vaswanis to evade payment of the higher duty rate slapped on them by the Customs for exceeding their rice import quota under the dual tariff regime.
The committee met under Sambo’s chairmanship on May 14. Those who attended included then Finance Minister Dr Ngozi Okonjo-Iweala, then Minister of Industry, Trade and Investment Olusegun Aganga, then Minister of National Planning Dr. Abubakar Sulaiman, Bureau for Public Enterprises’ director general Benjamin Dikki and permanent secretary in the Agriculture Ministry Arch. S. T. Echono. Within a matter of days this committee adopted a new “national rice supply gap” of 782,000 metric tonnes. It then proceeded to allocate new quotas to 16 “existing millers with expanding operations” and four “new investors” in rice milling. The former group included Mascot Agro, a new company said to have been hurriedly registered by Stallion Group as a new rice importer since their main company Popular Foods was already enmeshed in a struggle with the Customs. NCS even shut the company’s warehouses over non-payment of the excess duty but were ordered by the presidency to reopen them pending the resolution of the case. Mascot Agro got a new quota of 100,000 tonnes under the preferential tariff regime.
Trouble had started for Stallion Group late last year when NCS calculated that it imported 475,000 metric tonnes of rice over and above its 2014 quota of 89,939 MT. NCS determined that this excess rice import is not covered by the preferential  rate of 10 percent duty and 20 percent levy. Since the national rice policy approved by Jonathan in May last year prescribed 20 percent duty and 60 percent levy for any excess imports, Customs calculated Stallion’s indebtedness at N15 billion. This increased to N17 billion when the group imported another 54,000 tonnes of rice through its Mascot Agro, which was not a recognised rice miller and had no quota allocations in 2014.  Since then, Daily Trust learnt that the Vaswani Brothers pulled all available strings in the Federal Government to dodge paying the duty. Incidentally, three companies that also exceeded their import quotas, Kereksuk Farms, Atafi Rice Industries and Arewa Rice Mill quietly paid the higher charge slapped on them by NCS.
The new, hurriedly done 2015 quota allocations were conveyed by then Vice President Sambo to Jonathan in a letter SH/VP/FMARD/01 dated May 26, this year. Jonathan approved it the next day and his approval was conveyed to Sambo in a letter PRES/143/VP/748 dated May 27, 2015. It was signed by Matt Aikhionbare, Senior Special Assistant to the President, Admin. Sambo then sent it to Yuguda who ordered the Customs Service to comply in a letter dated May 28, the administration’s last full day in office.
With this last minute “parting gift”, an authoritative National Assembly source told Daily Trust that Stallion Group will now use the additional quotas granted to Mascot Agro to evade payment of billions of naira in Customs duty even though the imports were illegally made in the first place. The source also said this massive import by Stallion Group far above its quota has already created a glut of parboiled rice in the local market and has totally defeated the aims of the National Rice Development Policy which is to encourage the import of husky brown rice that requires local milling.
The source said the relevant National Assembly committee will draw President Muhammadu Buhari’s attention to the hurriedly done quotas which merely helped Stallion Group to dodge paying duties.