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Mystery Group Took Millions In Furlough Funds

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Furlough Funds

Mystery group took millions in furlough funds

A group of companies set up by an obscure entrepreneur received as much as £40m in furlough funds in a single month this year, despite little public evidence that the businesses have any staff.

The four companies, all registered to a virtual mailbox service in London, were paid between £20m and £40m in May from the UK government’s Coronavirus Job Retention Scheme, according to official data published this month.

The businesses claimed to be an IT services company, a corporate charity, a research hospital and a Jain religious institute, according to official filings. All use the word “Domain” in their name.

In unaudited UK accounts, Domain Corp Ltd and Domain Foundation, the IT business and charity, say they have 50 employees each.

The Domain Corp website says its virtual mailbox address in London serves as its European “corporate headquarters”, while the other entities have little trace online. The only LinkedIn account that references any of the four companies as a current or former employer is that of 44-year-old Rajanish Garibe, also known as Rajanish Jain, who incorporated the businesses, according to Companies House records.

The Financial Times was unable to reach Garibe for comment. After attempts to reach him via phone, letter and social media, the companies filed various backdated documents at Companies House changing his name from Garibe to Jain, and removing him as a director from the entities as of 2020.

The £70bn furlough scheme was set up in response to the coronavirus pandemic and involved the UK government paying much of the wages of non-working employees in order to incentivise companies to retain them.

More than 1m businesses have used the scheme, which expires later this month. Although the full circumstances of Garibe’s companies’ claims are unclear, the government has opened thousands of investigations into possible misuse of furlough funds.

The National Audit Office in a report last year said it expected the level of fraud and error in the scheme to be “considerable” and the Treasury has estimated that fraud and error could be as high as 10 per cent of total payments.

“We cannot comment on identifiable claimants or ongoing investigations,” said HMRC in response to questions about the Domain companies’ furlough claims.

The companies — Domain Corp Ltd, Domain Foundation, Domain International School and Domain Research Hospital — each received between £5m and £10m in furlough funds in May, according to government data. In each of the previous six months, the companies had either made no claims or claims no greater than £250,000. None of the companies made claims in June.

The companies were all incorporated by Garibe from 2016 onwards. Until this week he was listed as a director and person with significant control for all four. The entities are registered to an address inside Moorfield Eye Hospital’s Kemp House, near east London’s “Silicon Roundabout” tech cluster at Old Street, according to Companies House.

The address is a virtual mailbox operated by Capital Office, an office services provider whose website says it helps businesses “grow without the expense and hassle of employing staff or owning your own premises or equipment”. Capital Office receptionists at Kemp House last week accepted two hand-delivered letters from the FT seeking comment from Garibe and said they would be passed on.

After the FT attempted to reach Garibe, a flurry of filings at Companies House for the four entities updated his name to “Rajanish Jain” and added as a backdated director and person with significant control a 31-year-old American named Maria James. A company incorporated by James, Technotic Corporation, is also listed as a director and person with significant control for the entities.

James’ and Technotic’s address was given as suite 8 at 59 St Martin’s Lane, in London’s Covent Garden, the location of another serviced office provider. When the FT visited last week on two separate days to deliver a letter, no one answered the door to the suite and the building’s reception was unstaffed.

Domain Corp filed its 2020 accounts as a micro-entity, a status reserved for very small companies that must qualify by meeting two of three standards: a turnover of under £632,000, 10 employees or fewer and assets of less than £316,000. The accounts do not state revenues but claim that the company has £7.8m of assets and 50 employees.

In its 2019 unaudited accounts, Domain Corp lists its sales as exactly £85,000, the threshold at which companies must register with the government for value added tax purposes.

The company’s websites — domaincorp.ltd and domainllc.us — show little sign of actual trading. Each uses a template for a “IT services company website” from Wix.com, the website building service. The company’s tagline, “secure IT Solutions​ for a more secure environment”, is the same as the tagline on the Wix template, as are the “client” logos. Parts of the websites include unedited filler text from Wix.com, such as “I’m a paragraph. Click here to add your own text and edit me.”

Aa reference to Domain Corp Ltd on the websites was changed to refer to another entity, Domain Corporation Ltd, which Garibe incorporated in June 2021 and is also registered to the Kemp House mailbox. The domaincorp.ltd website subsequently went offline.

Domain Foundation, Domain Research Hospital and Domain International School also count similarly named entities registered in Washington DC and New York as corporate directors. There is also a New York-registered Domain Corporate LLC.

The address on the Washington DC company registry for Domain Research Hospital Inc and Domain International School Inc is occupied by an office supplies shop that offers PO boxes and whose front window was smashed when the FT visited last week. The official business registry does not publicly state any specific PO box number for either company. Staff at the shop declined to accept a letter containing journalistic enquiries unless a PO box number was provided.

Domain Foundation Inc and Domain Corporate LLC in New York are registered to a residential building in Manhattan that includes on the ground floor a UPS store that offers mailbox services. Staff at the store accepted a letter but said it was unlikely to be delivered as the mailbox had not been paid for since May 18.

The Domain Corp websites include external pictures of the buildings in which its London and New York mailboxes are based, referring to them as its European and North American “corporate headquarters” respectively.

UK and US phone numbers for Domain were unanswered last week. One US number on Domain Corp’s website played a recorded message of a US hedge fund’s client briefing about Venezuela. The fund, Torino Capital, did not respond to a request for comment. There is no suggestion it had any knowledge of or involvement with the furlough monies claimed by the Domain companies.

HMRC said it was “taking tough action to tackle fraudulent behaviour” in relation to Covid stimulus schemes, adding that anti-fraud measures were built into its business support programmes.

“We have blocked tens of millions of pounds of claims being paid out in the first place and we are using the full range of our powers to recover any incorrectly paid claims,” the tax authority said, adding that it had already recovered more than £600m of overpayments and had opened more than 23,000 inquiries.

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Marginal fields: NUPRC awards licences to 161 companies, rakes N200bn, $7m

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Marginal fields: NUPRC awards licences to 161 companies, rakes N200bn, $7m

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says the 2020 marginal field bid round exercise generated about N200 billion as well as $7 million in revenue for the federal government (FG).

Gbenga Komolafe, chief executive officer (CEO), NUPRC, made this known on Tuesday while issuing petroleum prospecting licences (PPL) to successful bidders in Abuja.

Marginal fields are smaller oil blocks developed by indigenous companies not exploited in the last ten years.

In May 2021, the Department of Petroleum Resources (DPR) — now NUPRC — completed the first successful bid programme after 18 years of bureaucratic bottlenecks.

Successful companies include Ardova Plc, Matrix Energy Ltd, Sun Trust Oil Company Limited, Deep Offshore Integrated Service Ltd, Island Energy Ltd, Sigmund Oil Field Ltd, among others.

Out of the 665 entities that expressed interest in the exercise, Komolafe said 161 PPLs were awarded to successful 2020 marginal fields companies while out of the 57 fields presented in the bid round, 41 were fully paid for.

He said 37 fields were also issued with the PPL, having satisfied all conditions for the award.

Komolafe said the marginal fields award initiative began in 1999 and was borne “out of the need to entrench the indigenisation policy of government in the upstream sector of the oil and gas industry and build local content capacity.”

He added that the scheme was also targeted at creating employment opportunities and encouraging increased capital inflow to the sector.

“Since its inception, a total of 30 fields have been awarded, with seventeen 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010. 10 years later, in 2020, 57 fields were put up for bidding,” he said.

“It is significant to note that the passage of the Petroleum Industry Act has brought an end to the era of marginal field awards. Section 94(9) of the Act states that ‘no new marginal field shall be declared under this Act’.

“Accordingly, the minister shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with sections 73 and 74 of the Act.”

Meanwhile, Komolafe said revenue earnings in the country is not reflective of the upsurge in international prices of crude oil owing to sabotage, theft, as well as other operational challenges.

Consequently, he urged potential licensees to take advantage of the current market realities and promptly bring their fields to production.

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Naira depreciates further to N614/$ at parallel market

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Naira depreciates further to N614/$ at parallel market

The Nigerian naira has dropped to N614 against the dollar at the parallel section of the foreign exchange market.

The figure signifies a depreciation of N7 or 1.2 percent compared to the N607 it traded last two weeks.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to TheCable in Lagos on Tuesday, said they purchase the greenback at N608/$, make a gain of N6, and then sell at N614.

At the official market, the naira also depreciated by 0.21 percent to close at N421/$ on Monday, according to information obtained from FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading.

Nigeria operates multiple exchange rate windows ranging from the importers and exporters window (I&E) window, where forex is traded between exporters, investors, and purchasers of forex, the SMEIS window where forex is sold to importers, and others.

International organisations such as the World Bank and the International Monetary Fund (IMF) have constantly advised the Central Bank of Nigeria (CBN) to unify the official and parallel market exchange rates.

But Godwin Emefiele, the CBN governor, had said that despite advice offered by IMF and the World Bank, developing economies such as Nigeria had the liberty of adopting “homegrown solutions to their economic problems.

According to him, the managed floating exchange rate, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand.

“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself,” he had said.

“When you allow that to happen, you will have an uncontrollable spiral on the naira.

“But what managed float means is that we have some measures in place to help control the spiral.”

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

These are challenging times for the federal and state governments as one major source of income to the federation account seems to be totally cut off.

On Monday, The National Petroleum Company Limited (NNPC) revealed it failed to remit monies to the federation account in May 2022 despite making N470.61 billion.

This is the fifth straight month NNPC has failed to credit the federal account while exporting crude at an average price of $100 per barrel.

Details of the June FAAC report obtained by The Harmattan News showed NNPC since the start of the year made N1.897 trillion, over N234.1 billion more than the expected revenue.

Sadly, however, NNPC said all the revenue had gone into various expenditure which includes petrol subsidy, oil search, Pipeline Security & Maintenance cost, National Domestic Gas Development and Nigeria Morocco Pipeline cost among others.

As expected, the bulk of the expenditure, N1.27 trillion, went toward recovery (also known as petrol subsidy).

In fact, NNPC said it has budgeted another N617 billion for petrol subsidy in June.

The report reads: “The Value Shortfall on the importation of PMS recovered from May 2022 proceeds is N327,065,907,048.06 while the outstanding balance carried forward is N617bn .”

“The estimated Value Shortfall of N845,152,863,012.97bn (consisting of arrears of N617bn plus estimated May 2022

Value Short Fall of N227,721,200,478.23) is to be recovered from June 2022 proceed due for sharing at the July 2022 FAAC Meeting,” it added.

The development means states have a tough road ahead and will have to look inwards to cover for the drop in federal allocations.

Already, some states have announced plans to slash workers’ salaries over dwindling income.

Kano Sate has already announced plans to slash workers’ salaries, following in the foot steps of the Ekiti State government that announced civil servants’ and political appointees’ salaries will be slashed in response to the present economic reality in the country.

Ekiti went further to suspend minimum wage implementation with no date of resumptions.

The Harmattan News had recently reported that pension contribution from governments dropped to a 16-year low in the first quarter of 2022.

From recent developments, it is more likely the figure will tank further.

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