VASWANIS – THE ILLEGAL DEPORTATION
We represent a large group of Nigerian advocates and journalists who have common interests that include identifying issues that stand in the way of economic progress in Nigeria. The government has been fighting a fierce battle in handling corruption and other illegal practices whilst seeking further foreign investments into key sectors to accomplish rapid economic progress.
In such as scenario, with a great deal of concern we have watched things unfold on the case of the deportation of the Vaswani Brothers in May 2003. We noticed the adverse media propaganda supporting the action, when the government decided to take what was then perceived as a bold step in stemming corruption. However, we had also seen numerous publications and articles that projected the factors in support of the Vaswanis. The Vaswani Brothers also presented their version of the action in compelling manner citing relevant details.
With a resolve not to be fooled by media reports, we decided to embark on a thorough and detailed review of the episode to establish the truth – very essential for the Nigerian people to realize before it is too late.
The investigation turned out is very extensive and time consuming as we had to cover all the areas concerned for clarification, using our contacts in business and government circles.
The Deportation
First of all, we were surprised to find that as of date no formal charges have been filed against the Vaswani Brothers under any law or jurisdiction in Nigeria. It is public knowledge that EFCC had completed a very detailed scrutiny of all transactions made by the Stallion Group. The truth is that the results have been favorable to the Brothers whose businesses have been found to be fully compliant with local regulations and laws. If the basis on which the deportation was said to be taken was so substantial as to justify such a drastic action, it would have been quite easy to establish the evidence and file charges as necessary.
To the credit of the EFCC they had done an excellent job given the sensitivities of the situation and would have presumably reported positively to the government.
We also found that the government has opted for an out of court settlement when the action was challenged by the Vaswani Brothers in Nigerian courts. This is another clear pointer to the reality of the situation.
Therefore one could conclude that the action on deportation was baseless and could have been indeed a mistake by the government in reaction to adverse propaganda sponsored by the business rivals of the Vaswanis who were unable to take them on professionally in the market place.
Investments
We delved into the subject of the Stallion Group’s investments to establish the magnitude and criticality.
To achieve the objective, we visited the various business sites of the group and also verified most of the information from authentic sources of the government.
Firstly we figured that the group had invested billions into infrastructure that included manufacturing facilities, logistics, showrooms, commercial buildings and other properties.
Our visits included motor assembly plants, textiles factories, Banks, High density Industrial/Household plastic manufacturing factories, rice milling development sites, Agricultural farms, Deep Sea trawler operations, shipping, dry warehouses, cold storage units, showrooms, office buildings, developed land sites for large manufacturing projects and a host of other prime commercial equipment and real estate.
It was heartening to see that inspite of the deportation, the Vaswani Brothers had carried on with their additional and substantial investments into value addition projects in Nigeria, supporting government policies on self sufficiency and import substitution. These projects have enhanced employment opportunities significantly for local Nigerians – we could see thousands of Nigerians employed with the group who seem to have an excellent system of training locals in their jobs with minimal expatriate involvement.
It is unfortunate that the deportation slowed down development of certain large projects like the cement and sugar, wherein it was clear that the Vaswanis had worked in a professional manner to secure the necessary relationships with global giants.
In summary, we were amazed by the scale of investments done by the group as foreigners even during unstable economic situations – we would rank them as the largest private owned foreign investors in the non-oil sector.
It is also pertinent to note that the Vaswanis have chosen to invest their profits back into Nigeria over the years into new projects, rather than repatriate. This has boosted their investment magnitude significantly, coupled with inflow of fresh capital from abroad.
Avoidance of Duties/Taxes
Our investigations revealed that during the years 2003 and 2004, the companies operated by the Vaswani Brothers had paid in to the government coffers duties, taxes and other levies to the tune of N11bn and 12bn respectively. This makes them one of the highest tax payers in the country that is way ahead of other foreign investors.
To claim without substance that they defrauded the government to the extent of N40bn is therefore not tenable. This argument is strengthened by the fact that inspections by various Government agencies over the last three years since the deportation have not confirmed any of the allegations.
Given the experience of this investigation, one can conclude strongly that the Vaswani Brothers would never have risked defrauding the government for such a large sum, putting all their investments at risk in the country.
Business Relationships
It was demonstrable that many international companies have put their weight behind the Vaswani Brothers, expressing support and open cooperation. Their relationships over many decades have remained unaffected even through this major crisis. Global giants like Honda, Audi, Volkswagen, Hyundai, Mahindra and Skoda have continued through the difficult times with the exclusive representative/distribution agreements – this is sufficient evidence that the international business partners of the Vaswani Brothers have remained convinced of their integrity and have rubbished the adverse reports that have appeared in the press. If not, how would responsible multinational companies with globally acclaimed brands have business relationships with so called offenders?
Apart from the automobile giants, the other principals and suppliers are also major corporations who enjoy market leadership across continents. None have these companies seemed to have withdrawn their support and have in fact reinforced their relationships by increasing the intensity of business deals.
It is clear that the Vaswanis have operated in a highly professional and commendable manner to be able to secure the trust and confidence of these corporations. This factor seems to have helped them immensely through their period of crisis.
Nigerian Banks and Institutions
Till date our investigations reveal, the Vaswanis have not inflicted a single event of default with any of the Nigerian banks and financial institutions.
The creditworthiness of the Stallion Group in the Nigerian banking scenario has remained robust through the crisis.
Money Laundering and other allegations
We probed with interest into the money laundering allegation on Sunil Vaswani with regard to the Naresh Asnani case for US$ 6.5mn. Sunil Vaswani had always maintained that the funds were his and was pulled into the case for no fault from his side, along with numerous defendants (he was the 42nd defendant).
We did not have to waste much time on this matter as the Courts in London dismissed the case against Sunil Vaswani, clearing his name fully from any wrongdoing. This was pursuant to the Order made in the High Court of Justice Chancery Division by Master Moncaster on January 4, 2006 dismissing the case against Sunil Vaswani.
The Federal High Court in Lagos, Nigeria on July 20, 2005 also struck out a NAFDAC case against Stallion Nigeria with regard to expired fish, pursuant to withdrawal of the case by the prosecution. This seemed to again be the handiwork of competition trying to bring ill repute to Stallion quite unsuccessfully, as the inspection authorities did a highly elaborate survey of Stallion’s fish stocks and could not find any quality problems.
Conclusion
Our exercise was quite laborious but has proven to be a fruitful one, as we are now able to comprehend the reality in the sad episode of the deportation.
As a country we are now obliged from an ethical and moral point of view, to remedy the situation and deliver justice to the Vaswani Brothers. Even from a pure commercial viewpoint, at the time when the country is actively pursuing potential foreign investment this issue if resolved would provide the much needed impetus.
Under the circumstances we have established that the Vaswani Brothers have been victimized by greedy competitors, who managed to create falsified media frenzy that prompted the government action that in retrospect is clearly illegal.
Edward Ajayi
Nigerian Advocates
Lagos, Nigeria
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