25th July, 2017
Facts have emerged on why Lagos discontinued criminal proceedings of alleged $8.8m fraud case against a Briton, Deepak Khilnani.
Mr Khilnani, a chartered accountant and of Indian descent was charged before an Ikeja high court alongside his one other, an Indian national, Sushil Chandra, over an allege $8,776, 862 fraud belonging to Green Fuels Limited.
Although hearing commenced in the matter before Justice OluwatoyinIpaye May last year based on legal advice.
However, the court on Thursday, July 13 struck out the matter and adjourned sine die.
The decision of the court followed an application of discontinuance dated June 29, 2017 filed by the prosecution.
The prosecuting team led by Akin George informed the court that after reviewing the charges against the defendants, it was discovered that there was no need to pursue the trial.
Investigation however revealed that the case was recommended for discontinuation after a thorough review of available documents and facts disclosed in the police case file are insufficient to sustain the charges of stealing and fraudulent conversion preferred against the defendants by the state.
It was discovered in the course of prosecuting the case that several petitions were received by the office of the DPP.
Several other legal Issues were also said to have arisen in the course of preparing for the trial of the case before the court, necessitating a thorough review of the facts of the case.
It was discovered that the legal team, according to DPP sources, observed that if there is any issue to be made on the transaction between parties concerned in the matter, it is better made in a civil suit than in a criminal suit.
From the facts of the case, it was revealed that the complainants, Mr.OlajideRosiji, Mr.Ahuwalia and Mr. Deepak Khilnani came together to form a company known as Greenfuels Limited while the share capital of the company was distributed amongst the three promoters.
Sometimes in 2009, Greenfuels Limited reportedly procured some equipments from Gentec Limited, a company in which Deepak allegedly has interest.
Although Gentec Limited supplied the equipment, it was suspected that the equipment was overpriced after a comparison with the price of the manufacturer.
The suspicion arose from a KPMG report dated 2014 which alleged a marked difference in prices.
It was gathered that the audit firm alleged that the equipment may have been over-invoiced by USD2, 076,944 and on this basis the transaction was alleged to be fraudulent by Greenfuels Limited.
However, after a study of the contract for the supply of the equipment between the two companies, it was observed that Gentec Limited specifically highlighted the price regime of the equipment to be supplied and the modalities of the supply was duly agreed to by the contracting parties.furthermore, it was not a cost pass through contract but a supply contract which included installation of the equipment and other ancillary services.
On whether the defendants has committed a criminal offence through fraud, it was discovered that Gentec is a Limited liability company, a legal entity with a different legal personality from the defendants. If no criminal offence is disclosed the company certainly even if one of the defendants is connected to the company he cannot also be criminally liable for the transaction.
On how to sustain a charge of stealing, the team it was learnt went through decided cases particularly Godwin Chianugo(alias Godwin Isienei) & others Vs The State, (2001) LPELR-7006 (CA) where it was established that to prove a case of stealing, the prosecution must prove the following: the ownership of the thing stolen; that the thing stolen is capable of being stolen and the fraudulent taking or the fraudulent conversion.
Sources said it was discovered that there is absolutely nothing in the casefile to show that Gentec Limited or through its agents, defrauded or obtained the order by trick, by tendering for the procurement of the equipment even if done through an agent.
It was learnt that the legal team came to this conclusion because the complaint against the defendants is not that the invoice did not meet the order, ‘but that the invoice met the order but was expensive”.
The legal team which reviewed the case also came to a conclusion that the fact that Mr. Deepak Khilnani also has interest in Gentec Limited is not by itself evidence of fraud or trick .
They discovered that there was need to show beyond reasonable doubt that there was some orchestrated scheme to cheat or to defraud Greenfuels Limited by Gentec Limited for the charges to stick.
In this instance, they concluded that there is no evidence of such in the casefile.
It was further observed that from the information contained in case file that the equipment supplied was according to a contract between Gentec Limited and Greenfuels and that money was paid to Gentec Limited based on that relationship.
The team of the prosecution found that the money for payment of the equipment had passed to Gentec Limited legitimately and not fraudulently as allegedly claimed by Greenfuels Limited. It had become property of Gentec Ltd.
Based on their findings, they concluded that the issue of stealing the money either by Gentec (the defendants) should not have arisen.
Having considered the decision in ‘The State vs Osler (1991) 6 NWLR, Pt. 199 at 576′, it was their summation that if there is any claim as to inflation of prices by the complainants, “it should lie in a civil claim and not a criminal case’.
They also found out that there is nothing in the casefile to show that either of the defendants influenced the quotation of prices to Greenfuels or benefitted from any profit that could have been made by GentecLimitedbecause there is nothing that traced any profit of the sales to them or that showed that they influenced the alleged high prices presented to Greenfuels.
However, findings revealed that the first defendant was actually a representative of Gentec in Nigeria when he was approached to join in promoting the new company, Greenfuel Limited and that one of the complainants, Mr. Anil Ahulwalia knew about this fact.
On the issue of making false statement to the Corporate Affairs Commission with intent to defraud the shareholders and members of Greenfuels Limited, it was observed from the statements contained in the casefile that the responsibility of filing such documents and shares of the company lies with the Company Secretary of the company.
Findings revealed that one NnennaEjekam of the law firm acting as company secretary for Greenfuel Limited stated that, by a board resolution and agreement, the shares of Anil Ahluwalia were to be transferred to Mr. Ola Rosiji.
It observed that according to the company secretary, due to administrative oversight and procedural lapses on the part of the law firm, a formal instrument was not prepared to show transfer of shares between the two shareholders.
Although recommendations were later made on the procedure for correcting the lapses, but rather than accepting the recommendations, the directors went to court to challenge the transaction.
It was further observed that the company secretary had stated in the Form CO2 filed that based on information they were given and presented to the Directors and they duly signed.
On the other hand, Deepak Khilnani, findings revealed totally denied making any statement or submitting any forms to any officer of CAC and that there is no cogent evidence to suggest otherwise except speculative conclusion that he must have made the statement because he stood to benefit from the transfer.
The team alluded to the case of State VsGwangwan (2015) LPELR-24837(SC) where it was held that where there is doubt as to the suspect committing an offence, the doubt must be resolved in his favour.
It was the summation of the team that reviewed the case file that the allegation against the defendants is based mainly on speculation, suspicion and conjecture and mere suspicion and that no matter how strong, cannot take the place of legal proof.