$8.8m Fraud Allegation: Truth About The Persecution Of Deepak Khilani, Sushil Chandra

$8.8m Fraud Allegation: Truth About The Persecution Of Deepak Khilani, Sushil Chandra

Wednesday, August 2, 2017 5:45 pm


By Kate Onyema

Thursday July 13, 2017, a Lagos High Court presided over by Justice Oluwatoyin Ipaye struck out frivolous fraud charges brought against two British nationals, Deepak Khilnani and Sushil Chandra by the Attorney- General of Lagos State. The decision of the court was sequel to a Notice of Discontinuance filed by the State Director of PublicProsecutions, Mrs. Titi Shitta-Bey praying the court to strike out the case in the light of a review of the case by the State Attorney General, Mr. Kazeem Adeniji.

It had been alleged by the Attorney General through the State prosecution team led by the then Director of Public Prosecution, Mrs. E.I. Alakija (now a serving judge of Lagos High Court) in a four count criminal charge that Deepak Khilnani and Sushil Chandra sometimes in 2008 defrauded a Nigerian company Green Fuels Ltd of about $8.8M, however there was apparently no evidence to support such an allegation

When the case started in 2015, the media was awashed with sensational headlines of how these British nationals had allegedly defrauded their Nigerian business partners. The truth was that the allegations against the defendants were baseless and unsustainable before any law court in the country. Although the presiding judge during the early stages of the trial dismissed a motion seeking to quash the charges, the State prosecution team still could not make meaningful progress in the matter because there was simply no evidence to prove the allegation against the Defendants. This was evident at the proceedings of 22nd October 2015 when the then DPP urged the Court to adjourn the proceedings indefinitely to enable her amend the Proof of Evidence. The fact was simply that a non-existence criminal implication was being imported into a purely business disagreement between Deepak Khilnani and his Nigerian partners.

The background to this civil dispute is that Ola Rosiji and Anil Ahluwalia who had formed a Company called Green Fuels Limited approached Mr. Khilnani’s Company in 2009 to join them in building a CNG gas distribution company – clearly this is a very technical businessand Mr. Khilnani’s company held experience and expertise in this area.

After protracted negotiations and discussions Green Fuels entered into a contract with Mr. Khilnani’s Company Gentec Energy, a UK PLC company to build theplant, train their personnel and provide technical management support to the business. The contract was signed by Mr. Anil Ahluwalia on behalf of Green Fuels Limitedandthe funds for the project were initially provided by Ola Rosiji’s Company Nigerian Distillers Ltd.

Mr. Khilnani was well known to Mr. Ahluwalia since 1997 and in fact Mr. Anil Ahluwalia’s son Arjun worked for Gentec Energy in the UK. Both Mr. Ola Rosiji and Mr. Anil Ahluwalia visited Mr. Khilnani at Gentec offices in the UK a number of times and at all times knew of his involvement in the Gentec UK business.

Gentec executed its contract with Green Fuels in full and created a very successful business in Green Fuels – further Mr. Khilnani facilitated an inward investment into Green Fuels which enabled it to grow its business to become the leading company in its field in Nigeria. The overseas investor Industrial Energy Africa Limited in fact invested and took a 75% investment inthe Company providing the necessary capital to establish and grow the business. After this investment Ola Rosiji’s shares were a mere 25% with 75% being held by Industrial Energy. Mr. Ahluwalia relinquished his shareholding in the company. This investment and the subsequent changes in the shareholdingwere approved by the Board of Green Fuels and duly filed at the CAC. Whilst these matters were approved by the board Mr. Ola Rosiji and Mr. Ahluwalia were both present and participated in implementing these decisions at the Board.Green Fuels continued to operate successfully with high profit turn over until 2012 when a management dispute led to a Court action instituted by Ola Rosiji and Anil Ahluwalia before a Federal High Court challenging the shareholding structure of the company. Rosiji and Ahluwalia in the suit number FHC/L/IKJ/CS/269/2012 are asking the Court for rectification of the Register of Shareholding of GFL in such a way that would give Rosiji, 87% shareholdings in Green Fuels. The matter is presently at the Court of Appeal, Lagos.

In all of this time, Industrial Energy, the majority Shareholder had been excluded from participation of the Company.

In 2014, Green Fuels under the chairmanship of Rosiji again filed another suit before the Federal High Court, Lagos claiming refund from Gentec for an alleged over invoicing of equipment supplied in pursuant of the agreement of 2008. Green Fuels also asked for damages against Deepak for breach of his fiduciary duty as a director in GFL. The matter is also still pending before the Federal High Court, Lagos.

While these two matters were pending in Court, a petition by Ola Rosiji was forwarded to the Nigeria Police, Zone 2 Lagos to investigate the allegation of over invoicing and forgery against Deepak in respect of the supply of equipment by Gentec Energy Plc. At the commencement of the investigation, Deepak was interrogated by the Police in relation to his involvement in the transactions that culminated to the complaint.

The Police team led by ACP Onaade S. Awoniyi (now a DCP) began its investigation in 2014 and after months of examining the company’s records of Green Fuels, invited parties in the matter for Arbitration. An audit firm, KPMG was also engaged by the Police to look into the company’s activities. Deepak did not participate in this Audit exercise because of a pending Ruling before the Federal High Court, Lagos in Suit No. FHC/L/IKJ/269/12 where upon the application of Green Fuels and on the objection of Deepak and Industrial Energy solely against the nomination of KPMG on the ground of an earlier biased briefing given to it by a personal staff of Rosiji. The court had heard arguments and adjourned the matter for Ruling to let it determine the appropriate firm to conduct the forensic audit on Green Fuels. Indeed, in deference to the pending matter and the Ruling before the Court, Delloitte had turned down the request by the Police to conduct the audit exercise.

It is now clear that the audit exercise was flawed from the start and in fact the report issued by KPMG confirms that the only information they relied on to generate the report was provided by Ola Rosiji and his associates.

At some point during the police investigation, Deepak’s lawyers sensing foul play challenged the move by the police to initiate an arbitration process which was outrightly one-sided and skewed in favour Ola Rosiji, who, being assured of Police full solidarity, proposed some egregious conditions as the basis for agreeing to a truce with Deepak.Consequently, an application to enforce Deepak’s Fundamental Human Right was initiated on behalf of Deepak at the High Court of Lagos state. Irked by the pre-emptive action of Deepak’s lawyers, the police hurriedly filed a charge before the Magistrates Court against Deepak and Sushil Chandra. However the Magistrate, Mrs. Omotosho after seeing the information had no option but to adjourn the matter since there was no proof that the defendants and their lawyers had been duly served with the charges.

While this was on, Deepak’s lawyers, Chris O.Okunowo& Co through a petition drew the attention of the then Inspector General of Police(IGP) to the perceived bias of his officers at Zone 2, Lagos. This prompted the IGP to set up another investigative team headed by DSP Yusufu Data and under the supervision of the Commissioner of Police in charge of SFU, Milverton, Lagos.

An intrigue was introduced into the scene at this point when Lawyers representing Ola Rosiji petitioned the then Lagos Attorney General, Mr. Ade Ipaye asking that the matter before the Magistrate Court be taken over by the State Directorate of Public Prosecution. Notwithstanding the ongoing investigation by the new team appointed by the IGP, the Lagos State Government took over the matter and subsequently filed Charges against Deepak and Sushil before Justice Oluwatoyin Ipaye.

After a detailed investigation the IGP’s Investigation team issued a report dated May 4th, 2015 asking parties involved in the case, that is Deepak, Ola Rosiji and Green Fuels Ltd officials to pursue their civil matter which is already at the Federal High Court, Lagos. An excerpt from the letter reads: “I refer to the Deputy Inspector General of Police Intelligence and Investigation Department letter No. CR: 3000/FHQ/ ABJ/VOL. 182/ 137 dated 21st April, 2015. He directed this office to inform all the parties to pursue their civil matter that is already in the Federal High Court of Lagos.”

With this letter, Deepak’s legal team wrote to the Attorney General asking for the review of his trial insisting that the issues which erroneously led to the charges being filed in the first place were contractual disputes which parties have already taken to the appropriate civil court for resolution. They also pointed out to the DPP that the allegation of filing wrong statement at the CAC lacked any basis on the ground that the Company Secretary of Green Fuels had in its statement to the Police admitted to filing and making all entries on behalf of the company at the CAC. The then DPP however remained adamant and continued with the shoddy prosecution which even attracted some uncomplimentary remarks from the trial judge.

At some point in the trial, the court was erroneously misled into issuing a bench warrant against Deepak and his co-defendant despite the fact that their counsel on record, Kayode Ajekigbe was not served with the Hearing Notice of the proceedings where the warrant was purportedly issued. Although, there was a pending application by Deepak’s lawyers challenging the warrant on the grounds that the requisite hearing notices were not served on them, some persons with vested interest continued to sponsor media reports which portrayed the defendants as fugitives of the law. Even when the motion challenging the warrant was still pending, newspaper advertisements were used to publish the warrants by persons who were not parties to the case but with less than noble intentions.

Mr. Khilnani has been a frequent visitor to Nigeria throughout this period and has never shied away from his legal obligations and has never at any time been a fugitive. In fact throughout these years his Companies have continued to bring substantial overseas investments into the Nigerian power sector, an area of critical important to the development of Nigeria. Deepakn is on record as stating that he has full faith in the Nigerian economy and her Judicial system and will abide by the decision of its Court which he has submitted himself to without reservation.

Knowing that the trial was a pure waste of the precious time of the Court and the resources of the State, formal requests were forwarded to the new Attorney-General for a proper review of the case and the basis upon which the Charges were predicated. The State on June 29, 2017 filed a Notice of Intention to discontinue the case. But those adamant on persecuting the innocent investors continued their intrigues by mobilising over 23 junior lawyers and rented crowds to protest and challenge the statutory powers of the Attorney General to institute and withdraw criminal proceedings. Surprised by the request of the lawyers, the presiding judge simply asked them to look elsewhere as they cannot compel her to review the lawful powers of the Attorney General to initiate and withdraw criminal matters before any court in Lagos State. She promptly struck out the matter and vacated the warrants initially issued against Deepak and Shushil.

It is pertinent to note that several attempts were made through newspaper publications to portray Deepak as a fraudulent foreign investor. As a Chief Executive Officer of a leading company with interest in the Nigeria Energy sector, Deepak could not have made so much significant impacts on the Nigerian economy for so many years through fraudulent means. The records of the impacts of his companies are there for everyone to see.

Portraying Deepak as a fraudster in Nigeria is therefore a cheap blackmail and an act undeserving of the huge investments and contributions he and his companies have made in this country.

That the present Attorney-General of Lagos State took a firm position against using the instrumentality of the Government through Ministry of Justice, Lagos to settle private causes and ensuring that persecution is not perpetrated in the name of prosecution, is an act that should be publicly applauded by all men of goodwill. This I believe is another most welcoming development in the administration of justice in Lagos State.

Kate Onyema is a Legal Practitioner based in Lagos

Join The Conversation

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.