Chairman of Zenith Bank Plc Jim Ovia is ready to refund £10,892,166 he is alleged to have dodged in tax payment while importing luxury aircraft into the European Union between 2007 and 2012.
Ovia and Godwin Emefiele, Nigeria’s Central Bank governor and ex-CEO of the Zenith, were among the world’s rich men uncovered in an artificial leasing scam to avoid paying value added tax in Europe.
The scam was uncovered and reported as more than 380 journalists from 96 media organisations in 67 countries pored over leaked 1.4 terabyte data German newspaper Suddeutsche Zeitung, and the International Consortium of International Journalists (ICIJ) obtained from Appleby and Asiaciti Trust and 19 secrecy jurisdictions around the world, including The Man’s Island in Europe.
Paradise Papers, as the investigation is now known, contains 13.4 million records. The ICIJ said it is no doubt one of the biggest leaks in history.
But Ovia said although Zenith Bank Plc was an end user of the aircraft, it did not acquire it.
“In order to ensure that there is no misunderstanding, Mr. Ovia has asked us to make clear that no funds of Zenith Bank were used to acquire the aircraft,” Mr. Ovia wrote through his lawyers, Clifford Chance, in a response dated October 27.
“You are aware that professional advice was taken from Ernst & Young LLC at the time of the transaction that VAT was properly recoverable by Oviation Limited. Had the advice been that VAT should not have been recovered in full or in part, we are instructed that the company would not have made the relevant claim.
“Oviation Limited has no reason to doubt the original advice, but if that advise were ever to change, we are instructed that Oviation limited would repay the relevant VAT. This illustrates the good faith at all times of Mr. Ovia.”
On October 23, the Isle of Man Government announced it has invited Her Majesty Treasury to conduct an assessment of the practice for the importation of business jets into the EU through the Isle of Man, with a focus on the VAT treatment of aircraft leasing arrangements.
The government said it took that step after consistent and coordinated enquiries on the matter by media organisations associated with the ICIJ.
More than 120 politicians and country leaders, and businessmen in nearly 50 countries across the world showed up in the record.
Nigeria’s Senate President Bukola Saraki again came up in Paradise Paper, just like he did in the Panama Paper the group broke last year.
Emefiele and his former boss incorporated three offshore companies to parry the VAT. The shell companies are Vitesse Asset Management SA (incorporated in Switzerland in 2007); Oviation Asset Management Limited (a Bermuda company established in 2009); and Oviation Limited (an Isle of Man company incorporated in 2012).
The aircraft acquired include Gulfstream 450 for $33 million and a $51 million G550 jet in November 2015 imported it into the Isle of Man, a European territory, where one of their shell companies – Oviation Limited – is domiciled. Oviation Limited then leased it to another of their companies, which in turn leased it to Zenith Bank.
Oviation tax adviser was by Ernst and Young, a multinational professional services firm headquartered in London.
Tax experts and journalists believe that the leasing schemes adopted for these transactions were structured to avoid tax, and that tax authorities should demand repayment of the amount.
It remains to be seen how the CBN Governor Mr Emefiele intends to explain himself out of this growing controversies.