SERAP Sues NNPCL over Alleged N5.9 billion Rebranding Expenditure

The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Nigerian National Petroleum Company Limited (NNPCL), seeking a court order compelling the oil company to account for about N5.9 billion allegedly spent on the incorporation, transition and rebranding of the Nigerian National Petroleum Corporation (NNPC) into NNPCL.

The Socio-Economic Rights and Accountability Project (SERAP) has filed a lawsuit against the Nigerian National Petroleum Company Limited (NNPCL), seeking a court order compelling the oil company to account for about N5.9 billion allegedly spent on the incorporation, transition and rebranding of the Nigerian National Petroleum Corporation (NNPC) into NNPCL.

The suit, filed at the Federal High Court in Abuja, was disclosed by SERAP in a statement detailing its legal action against the state-owned oil company.

The lawsuit was filed on behalf of the organisation by its lawyers, Oluwakemi Agunbiade, Kehinde Oyewumi and Andrew Nwankwo.

The report of the suit is coming exactly one month after SERAP urged President Bola Tinubu to direct an investigation into the N5.9 billion reportedly spent on the rebranding of the Nigerian National Petroleum Corporation (NNPC) to NNPCL.

What they are saying

SERAP is asking the court to compel NNPCL to provide a detailed reconciliation of the N5.9 billion expenditure, including information on the transactions involved, the contractors who received the funds and how the money was used in the rebranding process.

The organisation is also seeking an order directing the company to reveal the identities and official positions of government officials who approved the release and spending of the funds, as well as clarify whether the expenditure complied with procurement laws and due-process requirements.

• SERAP argued that, “There is a legitimate public interest in the disclosure of the details sought. The NNPCL has a legal responsibility to explain whether the ₦5.9 billion expenditure represents value for money, constitutes lawful spending of public funds, and complies with applicable due process requirements.”

According to the group, transparency over the expenditure is necessary to enable Nigerians assess whether the spending was properly authorised and whether due process was followed.

The organisation further contended that the alleged spending raises concerns about accountability and public trust, arguing that failure to provide details of the expenditure undermines citizens’ right to access information on the management of public resources.

Get up to speed

The lawsuit stems from concerns raised by the Senate Committee on Public Accounts over about N5.9 billion reportedly spent during the transformation of NNPC into NNPCL.

• According to details cited by SERAP, NNPC allegedly paid N2.9 billion for incorporation expenses from petroleum product proceeds, while the National Petroleum Investment Management Services (NAPIMS) reportedly charged another N2.9 billion to crude oil revenue for the same purpose, bringing the total expenditure to about N5.9 billion.

The Senate committee reportedly described the spending as excessive and unjustifiable, calling for further explanation, investigation and legislative scrutiny.

The rebranding exercise followed the enactment of the Petroleum Industry Act (PIA) 2021, which transformed NNPC into NNPCL, a commercially oriented limited liability company wholly owned by the Federal Government.

In its court filings, SERAP argued that NNPCL has a constitutional and legal obligation to ensure transparency and accountability in the management of public funds and resources.

What you should know

The lawsuit adds to a growing list of accountability-related concerns surrounding NNPCL.

• On March 6, the Senate Committee on Public Accounts summoned the immediate past management of NNPCL, including former Group Chief Executive Officer, Mele Kyari, over alleged financial discrepancies amounting to N210 trillion in the company’s audited financial statements between 2017 and 2023.
• Lawmakers said they identified about N103 trillion recorded as accrued expenses in NNPCL’s 2022 financial statements, including retention fees, legal fees and audit fees, without detailed breakdowns.

Meanwhile, SERAP recently secured a court victory against the National Assembly after the Federal High Court in Lagos declared unlawful the legislature’s controversial N110 billion expenditure on vehicles and allowances for lawmakers.

• The suit challenged plans by the National Assembly to spend N40 billion on 465 vehicles for lawmakers and allocate an additional N70 billion as support allowances for newly elected members amid worsening economic conditions.

The ruling reinforced calls for greater transparency and accountability in the management of public resources, a principle SERAP says also underpins its latest legal action against NNPCL.