$500m insurance contracts: NIGCOMSAT breachs due process – Reps

Shocked by the company’s action, the Lower House Ad-hoc Committee probing the insurance companies’ pay-outs to Ministries, Departments and Agencies (MDAs), invited NIGCOMSAT’s former Manag­ing Director, Alhaji Ahmed Ru­fai and all the former directors of finance to appear before it on Monday next week.

During the appearance of the Managing Director of NIGCOMSAT, Mrs. Bimbo Alale, the committee’s chair­man, Hon. Adekunle Akinlade, claimed that the insurance con­tracts were not advertised as prescribed by the Public Pro­curement Act before they were awarded.

He further said that they were awarded to unlicensed insurance brokers.

In her defence, Alale told the committee that until 2016, NIGCOMSAT only selected in­surance companies based on a list provided by the National Insurance Commission of Ni­geria (NAICOM) and also re­lied on approval from the Pres­ident.

She maintained that she was unaware that the firms used were unlicensed but re­marked that most indigenous insurance companies refused to give cover due to the high risk involved in insuring a satellite.

Alale said: “Until 2016, we never advertised. We just called for a meeting of firms given to us by NAICOM and organise a workshop for them. It was af­ter the workshop that we chose which participating firm to award the contracts to.

“In 2013, I didn’t know that FASAHA was not licensed. We tried to get other firms includ­ing Leadway Assurance but it was difficult. Most of the local companies refused to take the cover policy because the risk is high but we have been able to split it into two.

“Before now, it was 80% that goes to foreign under­writers but now, we have split the cover to 30% and 70%. The 70% is taken by foreign under­writers while 30% is taken up by local insurance underwrit­ers,” Alale said.

A member of the commit­tee, Hon. Onyewife Gabriel, who cited sections 34, 35 and 37 of the Insurance Act, which prohibits the engagement of unlicensed companies, high­lighted the penalties for con­travening the law.

He said: “Madam, I will like you to know that the penalty for violating the Act, you will refund all the money paid to that unlicensed company and you risk a two-year jail term if you are convicted with no op­tion of fine.”

Also, Hon. Prestige Ossy told the managing director that “if you did not advertise the jobs, it means you brought in people of your choice with your interest thereby short-changing the government.”

Alale will return on Mon­day next week to provide the committee with all the docu­ments covering every transac­tion from 2013 till date.

The breakdown of the $500 million showed that in 2013 NIGCOMSAT expend­ed $188.883 million, $168.135 million in 2014 and in 2015 it spent $143.775 million on in­surance without advertising the jobs.