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Alleged fraud: Court struck out suit against two Britons

A frivolous fraud charge brought against two British nationals, Deepak Khilnani and Sushil Chandra, by the Attorney-General of Lagos state has been struck out by a Lagos High Court.

The decision of the court was sequel to a Notice of Discontinuance filed by the State Director of Public Prosecutions, 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 $8.8million.

However, there was apparently no evidence to support such an allegation. 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 business and 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 the plant, train their personnel and provide technical management support to the business.

The contract was signed by Mr. Anil Ahluwalia on behalf of Green Fuels Limited and the funds for the project were initially provided by Ola Rosiji’s Company Nigerian Distillers Ltd.

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 in the 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 shareholding were 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 asked 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. Mr. Khilani 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.

At some point during the police investigation, Mr. Khilani’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 Khilani.

Consequently, an application to enforce Deepak’s Fundamental Human Right was initiated at the High Court of Lagos state. Irked by the pre-emptive action of Khilani’s lawyers, the police hurriedly filed a charge before the Magistrates Court against Khilani 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, Khilani’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 Khilani and Sushil before Justice Oluwatoyin Ipaye.

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