Ex-CEO of Federal Mortgage Bank granted N100 million bail in alleged $65m ‘fraud case’

The Federal High Court in Abuja has granted N100 million bail to a former Chief Executive Officer of the Federal Mortgage Bank of Nigeria (FMBN), Mr. Gimba Kumo Yau, who is accused of allegedly awarding a $65,000,000 real estate contract to an allegedly incompetent firm, Good Earth Power Nigeria Limited, in 2012.

Justice James Omotosho granted N100 million bail each to Yau and co-defendants Bola Ogunsola and Mr. Tarry Rufus on Wednesday, in the matter filed by the Independent Corrupt Practices and Other Related Offences Commission‘s (ICPC) lawyer, Dr. Osuobeni Ekoi Akponimisingha, in the charge sheet marked FHC/ABJ/CR/333/24.

Good Earth Power Nigeria Limited and T. Brend Fortunes Limited were also joined as defendants, having been sued for their alleged contravention of the Public Enterprises Regulatory Commission Act and Section 19 of the Money Laundering (Prevention and Prohibition) Act, 2022.

Facts of the case 

• In ICPC’s five-count charge, the anti-graft agency accused Yau of making payment to Good Earth Power Nigeria Limited in the sum of N3,785,000,000.00 out of the total contract sum of $65,000,000 for the development of 962 units of residential housing in Kubwa, Abuja, named “Goodluck Jonathan Legacy City,” contrary to accepted practice.
• The ICPC maintained that the former bank CEO allegedly contributed to his organization’s failure at the time by approving $65,000,000 to a firm that could not carry out and complete the real estate project.
• The allegations stated that Mr. Gimba Kumo Yau and Bola Ogunsola, in their roles as  chief executive officer and executive director of the bank in August 2012, had secured a loan of N14 billion from Ecobank Nigeria PLC on behalf of the bank.
• This loan was said to be earmarked for the development and completion of 962 residential housing units in Kubwa, Abuja, named “Goodluck Jonathan Legacy City,” within 18 months.
• ICPC further alleged that Mr. Gimba Kumo Yau, as the bank’s CEO, awarded the $65 million contract despite knowing that the company lacked the capacity to carry out the contract.
• ICPC added that the project remains incomplete as of today, thereby amounting to “economic adversity” for the bank and in violation of Section 68(1) of the Public Enterprise Regulatory Commission Act, CAP P39, Laws of the Federation, 2004.
• The other defendants were accused of giving and receiving $3,550,000.00 of the contract sum in cash in contravention of the Money Laundering Act.
• When the charges were read out to the defendants in open court, they had pleaded not guilty.
• Subsequently, their legal team applied for bail.

What transpired in court 

• The defendants had argued that bail is at the discretion of the court and that the applicants are entitled to bail, being presumed innocent under the law.
• They also assured that their clients would not jump bail when granted bail, as one of the defendant’s counsel also submitted that the charge against his client is not one punishable by death.
• On the part of the ICPC counsel, he did not oppose the applications for bail.
• Ruling on the bail applications on Wednesday, Omotosho held that bail is premised on the presumption of innocence, which an accused person enjoys until he is declared guilty by the court.
• He also said that bail is at the discretion of the court.
• Subsequently, he granted N100 million bail to each of the defendants with two sureties in like sum.
• He ruled that each of the sureties must be owners of property worth N100 million and that they must swear to an affidavit of means and show evidence of tax payment for the past three years.

“The sureties and defendants shall submit their recent passport photographs and certified bank statements. 

“The Defendants shall submit their international passports to the registrar of this court,” the judge said.  

• He also ordered that the registrar of the court shall verify these documents and issue a report while the defendants are remanded pending the perfection of the bail conditions.

Backstory  

In 2021, the ICPC had declared Tarry Ruffus, Mr. Gimba Yau Kumo, and Mr. Bola Ogunsola wanted in connection with issues relating to the diversion of public funds for real estate to the tune of $65 million.

• The ICPC, in a statement on its website dated August 29, 2021, said that it recovered N53 billion from a real estate developer for the Federal Mortgage Bank of Nigeria.
• Former Chairman of ICPC, Prof. Bolaji Owasanoye, had disclosed during a meeting with the House of Representatives Ad-hoc Committee Investigating the Operations of Real Estate Developers in FCT at the time.
• According to him, the developer took the money without providing houses for its subscribers.
• The Senate Committee on Public Accounts had also summoned Mr. Kumo over the irregular award of an N3 billion contract under his leadership.

The summons was based on a 2015-2018 report by the office of the auditor-general of the federation (AuGF) against the bank.

Kumo had reportedly told the ICPC that he had nothing to hide following its allegations