Business News

Dangote Group Refutes Allegations of Forex Malpractice Amidst Economic Tensions

Dangote Industries Limited has recently come forward to address what it calls unfounded allegations of foreign exchange (forex) malpractices and money laundering purportedly involving a staggering sum of $3.4 billion.

This rebuttal comes after certain online media outlets began circulating stories suggesting the company’s entanglement in illegal forex dealings facilitated by the Central Bank of Nigeria (CBN) under the leadership of Mr. Godwin Emefiele.

The conglomerate, a mainstay in Nigeria’s industrial landscape and a significant player on the African economic scene stated that although it typically does not respond to spurious claims, the resurgence of an accusation that first emerged in 2016 compelled its hand.

The original report, alleged by Dangote Group to be an act of economic sabotage by competitors, was circulated as a paid advertorial in BusinessDay and Leadership newspapers on March 14, 2016.

Dangote Industries stresses that the narrative, which claims the money was funneled to its non-Nigerian subsidiaries, prompting illicit financial flows and round-tripping, was discredited and subsequently retracted by the newspapers after recognizing that the content was sponsored by a rival business group.

This latest round of allegations has been given new life, according to Dangote Industries, by one Ahmed Fahad, who is alleged to have repackaged the old accusations as a fresh petition to the newly inaugurated President Bola Ahmed Tinubu and Mr. Jim Obazee, the Special Investigator probing the CBN.

The company asserts that this has been done to the detriment of its corporate reputation, with various blogs and social media platforms spreading different versions of the claims.

“The attempt by the authors of this misleading allegation to give it a fresh life in the media is baffling as the two newspapers that were misguided into publishing it as advertorial then (2016) have since publicly apologized to the Management of Dangote Industries Limited in writing as well as retracted the advertorial in its entirety in their respective publications. Indeed, BusinessDay and Leadership Newspapers admitted that the advertorials were sponsored and paid for by Messrs. BUA Group.”

In its comprehensive press release, Dangote Industries provided detailed clarification. It emphasized its status as a global brand that adheres to the best practices of corporate governance, transparency, and compliance with laws and regulations across jurisdictions.

As evidence, the group referred to past approvals granted by the CBN between 2010 to 2018, allowing it to purchase forex totaling $3.755 billion for funding its projects across Africa, of which only 47.70% has been utilized to date.

Dangote Industries highlighted its success in establishing and commissioning projects in several African countries, including cement plants, which were built in accordance with regulatory requirements.

The company underscored that forex for these undertakings was sourced from the interbank market, with all transactions supported by Letters of Credit in line with international standards.

These Letters of Credit were mainly in favor of Sinoma International Engineering Co Ltd, the Chinese contractor responsible for over 75% of the expenditure, and were paid against the presentation of relevant shipping documents, without any funds being routed through a Dubai-based entity owned by Dangote.

The company also noted the economic benefits that its investments have brought to Nigeria, including the repatriation of foreign exchange earnings totaling USD 576 million through various banks in Nigeria. This includes a cash swap deal with Ethiopian Airlines, which was sanctioned by both the CBN and the National Bank of Ethiopia, resulting in significant forex savings.

Dangote Industries has defended its operations in host countries, explaining that certain payments to local vendors and contractors are mandated to be conducted locally for regulatory and tax reasons.

It assured stakeholders that all transactions were documented, audited, and in compliance with host country regulations, facilitating the repatriation of forex to Nigeria.

It assured stakeholders that all transactions were documented, audited, and in compliance with host country regulations, facilitating the repatriation of forex to Nigeria.

The group closed its statement by reiterating its position as Nigeria’s top private-sector job creator and taxpayer, highlighting its investments that surpass both local and international stakeholders. It affirmed its commitment to maintaining its reputation and invited government regulators to scrutinize its records.

Dangote Industries Limited’s emphatic response to these allegations not only seeks to clear its name but also aims to uphold the integrity of Nigeria’s corporate giants on the global stage.

The outcome of this dispute may have wider implications for Nigeria’s economic image and the conduct of foreign exchange business within the country.

The company remains resolute in its innocence, assuring all stakeholders that the allegations leveled against it are without merit, hoping that this clarity will preserve the trust and confidence placed in its operations by partners and the general public alike.

See the press release below

Download (PDF, 9.53MB)