Nigeria’s House of Representatives has directed the Bureau of Public Enterprises to account for about N10.4 billion reportedly used to register two subsidiaries of the Nigeria Postal Service (NIPOST).
The Chairman of the House Committee on Public Accounts, Hon. Bamidele Salam, made the call at the resumed investigative hearing of the committee on federal Ministries, Departments and Agencies (MDAs)
The lawmaker expressed serious concern that the registered companies had collapsed even within one year of the registration exercise, describing the development as undesirable for the public finance system.
According to him, the two companies, namely NIPOST Transport and Logistics Limited, and NIPOST Property Limited, commenced operations in May 2023 and were ordered to fold up through a Presidential directive in May this year.
Salam rued: “No reasonable Nigerian will believe that N10.4 billion was spent to register the two companies. The companies eventually folded up one year after takeoff.”
Reacting to the lawmakers’ allegation, the privatization agency’s Head of Finance and Accounts, Mr. Imam Rilwan, who represented the Director-General, said that of the amount, N10 billion was released for the commencement of operations of the two entities.
Rilwan, who disclosed that the approval for the registration of the subsidiaries was given in 2017, explained that the balance N400 million was given to the BPE to facilitate the take-off of the companies.
He clarified that this made the Bureau to spend about N423 million to register the two NIPOST’s subsidiaries as well as other logistics for the formal kick off of the entities.
According to him, the BPE secured premises for the two companies in 2022 by paying the rent, the companies eventually took over the facilities in May 2023 and were folded up in May this year.
The financial officer of the agency said that following the wounding up of the companies, all their assets had been handed over to the management of NIPOST.
In his response, the Chairman of the committee pointed out that spending money from government’s coffers before such funds are released was illegal and a violation of the Public Procurement Act.
The committee subsequently directed the BPE Director-General, Mr. Ayodeji Gbeleyi, to appear before it on September 11 with all relevant documents relating to the transactions on the registration and operations of the two defunct NIPOST’s subsidiaries.
