Business

Mystery Group Took Millions In 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.

Business

Nigeria’s total debt hits N87.37trn in Q3 2023 — DMO

Director General of Debt Management Office (DMO), Ms. Patience, on Friday, disclosed that the country’s debt stock stands at N87.37 trillion as at 30th September 2023.

Ms. Oniha who disclosed this during the interactive session held at the instance of House Committee on Appropriations chaired by Hon. Abubakar Bichi, however, noted that while justifying the rationale behind the borrowing spree, she informed the Parliament that projects implemented by Federal Government during the three previous recessions were funded through borrowing.

She said: “Let me speak a bit about public debt as you requested in the letter inviting us

“The first point is that we have run budget deficit for many years for which the DMO has been raising funds locally and internationally to support the budget.

“The point I would like to make is that as the level of borrowings increases you have to service them so debt services increase also.

“Again, we run budget deficits because we have projects and programmes in the budget that the government wants to run. If we go back from 2015 and 2016, we know we have been through about two or three recessions. So, a lot of that bringing the economy out of recession was funded from borrowing.

“The DMO’s role is to manage that debt and make sure it is sustainable and that there is no default because borrowing is not a bad thing but when you borrow you use it well.

“Debt has been growing largely from new borrowings. You see the MTEF for instance that you have approved, it has borrowings in each of the years of 8.7, 10.2 and N11.58 trillion just to buttress the point that as you increase the funds the debt stock grows.

“So, it also also growing because we have issued Promissory Notes and again like I said, Ways and Means advances. We usually like to say that debt stock relative to our GDP is not the issue.

“That has grown from 23 percent in March to about 40 percent in June. The same way the debt stock grew.

“But we need to do, to focus on debt service revenue which is very high. That is why I said the discussions about revenue, we cannot stop talking about them enough.

“So, apart from trying to generate as much revenue as we should, what else should we be doing? We are advocates for a number of initiatives being taken. Should be privatized if those projects can be better managed. You can attract capital. Do the private-public partnership so not everything is on the budget. Because when you put everything on the budget, you cannot get a deficit for which you need to borrow.

“We should strongly support the Fiscal Reform and Tax Policy Committee, we really need to get that working to change the story of us.

“For this year 2023 the DMO was to provide about N8.8 trillion, 7 trillion of that is domestic; meaning we borrow it here on naira. And then there is 1.7 trillion that ordinarily in normal times, we would have issued Euro bonds or from other sources.

“So, out of the domestic of 7 trillion as we speak, we have raised the full amount. So, you can say we have raised a significant amount to fund this budget.

“If the international markets had been covered and we were investing in counties with similar ratings like Nigeria by now we would also have issued a Euro bond.

“We have been extremely supportive of funding the budget and the operations of government,” Ms. Oniha noted.

While speaking on funding of some of the proposed infrastructural projects, she disclosed that the present administration is to ensure direct support with the SUKUK.

According to her, “This year some of that 7 trillion we issued it by way of SUKUK and you will soon begin to see the roads across the FCT.

“Having spoken to what is in the 2023 of which we have raised 7 trillion out of the 8.8 trillion. So we know that in 2024, from the MTEF there is 8.749 trillion.

“So, the levels of borrowing are still high but I think as the MTEF is a rolling document, as the picture looks better on revenues maybe the numbers would be lower.”

Speaking earlier, Chairman, House Committee on Appropriations, Hon. Abubakar Bichi explained that the interactive session with heads of MDAs was aimed at addressing strategies for the rising inflation, reducing the burden of Nigeria’s debt profile, sectoral budgetary allocations, and the dynamics of budget releases.

“Others are economic diversification strategies, revenue generation forecasts, and any useful information that will facilitate the enactment of the bill and effective implementation of the Appropriations Act, 2024.

“Amidst concerns to address the infrastructural gap in the country, eliminate poverty, and generally achieve the 8-Point Renewed Hope Agenda, there is a need to ensure that all loose ends to revenue are tied, as this can have a gross impact on the government’s ability to implement the 2024 Appropriation Bill when passed.

“While the revised MTEF and FSP showed that revenue-generating efforts by the present administration are already yielding fruit, more needs to be done to ensure that government-owned enterprises optimize their revenue-generating potential.

“In light of the above, this interaction is designed to engage relevant stakeholders to provide insight on the perspective of the budget and enable the Committee to play its coordinating role in ensuing allocative efficiency in the 2024 appropriation process,” Hon. Bichi noted.

Business

PenCom Recovers N24.8b UnremittedFunds

The National Pension Commission, PenCom, recovered N24.8 billion of funds unremitted by employers in the third quarter of 2023.

Oguche Agudah, Chief Executive Officer of Pension Funds Operators’ Association of Nigeria made the declaration on Friday in Lagos.

He spoke at a media parley with the theme: “At the dawn of 20 years of pension reform, what are the gains?”

Mr Agudah said PenCom recovered N23.3 billion of such funds in the third quarter of 2022, while it recovered N2.23 billion in the third quarter of 2021.

He said also that the pensions industry recorded an Asset under Management of N17.35 trillion in the second quarter of 2023.

It made investments of N349.97 billion in infrastructure in the second quarter of 2023, up from the N333.02 billion invested in the corresponding quarter of 2022, Agudah added.

Investments in infrastructure, he also said, represented 2.02 per cent of total investments made in the second quarter of 2023.

Mr Agudah said the industry also invested N1.54 trillion in the equities market in the third quarter of 2023.

This, he explained, represented 8.88 per cent of total investments, as against the N964.84 billion invested in the corresponding quarter of 2022.

He said the pension industry would focus more on micro-pensions and revise its investment guidelines in 2024 when it celebrates the 20th year of pension reforms.

Business

Nigeria, China sign pact on $150m battery plant

The Federal Ministry of Power and the China Ministry of Ecology and Environment, on Friday, supervised the signing of an agreement for the construction of a $150m lithium-ion battery manufacturing plant in Nigeria by a Chinese firm.

Parties in the deal signed the agreement in Dubai at the United Nations Climate Conference, also known as COP28, according to a statement issued in Abuja on Friday by the Rural Electrification Agency.

The statement read in part, “The Rural Electrification Agency of Nigeria and the National Agency for Science and Engineering Infrastructure are poised to make a significant stride in climate action by signing a groundbreaking cooperation agreement with the SHENZEN LEMI Technology Development Company.

“The agreement was signed on December 8, 2023, under the leadership of the Nigerian Federal Ministry of Power and the China Ministry of Ecology and Environment.

“The partnership will facilitate the establishment of a lithium-ion battery manufacturing and processing factory in Nigeria. This initiative is backed by a $150m investment from LEMI, with operations scheduled to commence in phases, starting from the second quarter of 2024.”

The REA stated that the Chinese Ministry of Ecology and Environment, in collaboration with the Federal Ministry of Power in Nigeria, expressed enthusiasm for being part of the agreement.

“The signing of the cooperation agreement is anticipated to serve as a pioneer initiative for the Light and Belt Initiative in Africa, aligning with global efforts to drive climate technology development and transfer.

“This collaboration will strengthen NASENI’s mandate under the agency’s new leadership to manage the research and development of capital goods, production and reverse engineering to enhance local mass production of standard parts and services for the nation’s technological advancement with a special focus on the Nigerian electricity sector.

“Furthermore, the collaboration underscores REA’s commitment to bridging the climate technology gap and combating the adverse effects of climate change. It also aligns with Nigeria’s ambitious goals of achieving universal electricity access by 2030 and net-zero emissions by 2060,” the agency stated.

It further explained that the partnership would foster the development and transfer of climate technology, promote indigenous industrialisation, facilitate commercialisation, enhance public-private cooperation, and contribute to job creation, economic growth, and the extractive industry in Nigeria.

“Recognising the crucial role of energy storage in the transition to renewable energy sources, the investment in lithium-ion energy storage manufacturing signifies a significant step towards achieving a low-carbon economy,” the REA stated.