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L-R: Right Honourable Mark Simmonds, Senior Consultant, Kroll; Bolaji
Balogun, Chief Executive Officer, Chapel Hill Denham and Alex Booth, Associate
Managing Director, Kroll at a Meeting in Lagos recently
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Leading strategic intelligence and advisory firm Kroll continues to see real interest amongst its clients for the exciting investment opportunities offered by the Nigerian market.
Kroll is working for Nigerian clients, many of them corporates, energy companies or banking groups, which are seeking to expand overseas or raise money on the international capital markets. In addition, the rise of internet-enabled crime has seen increased levels of interest amongst Nigerian clients for Kroll’s cyber security services.
International and regional investors are increasingly engaging Kroll for support in Nigeria – to increase their understanding of the country, or to deal with operational and strategic issues – despite the economic headwinds the country is currently facing.
Although 2016 has been a challenging year for Nigeria – low oil prices have subdued economic growth, acute currency pressures continue, and policy direction has often been uncertain – the outlook in the medium term for this large and dynamic market remains highly favourable.
As well as being Africa’s largest oil producer, Nigeria is an agricultural and soft commodities powerhouse, and has substantial under-exploited mineral reserves, with real potential to scale up output. Coupled with its important and diverse services sector, growing consumer markets, and vibrant and entrepreneurial business community, the country continues to attract a wide range of international and regional investors.
Kroll is often engaged by these investors to support their entry to the Nigerian market. We gather intelligence through our networks and draw on our deep regional knowledge to help our clients identify commercial opportunities in Nigeria, assess risks, analyse competitors, and carry out due diligence on acquisition targets or joint venture partners. The scale and sophistication of the Nigerian market generates high levels of interest, and in 2016 Nigeria accounted for just over half of Kroll’s business intelligence casework across Africa.
During one of his regular visits to Lagos, Associate Managing Director in Kroll’s Africa team Alexander Booth said:
“Our unparalleled investigative pedigree and forensic accounting capabilities also see us engaged frequently in Nigeria to combat fraud, bribery and corruption. We are ideally equipped to support private sector Nigerian clients which have suffered thefts of money, stock or sensitive data, and to support Nigerian government agencies involved in President Buhari’s laudable and ambitious initiatives to prosecute state corruption, reduce tax avoidance, and recover stolen sovereign assets from foreign jurisdictions.”
Recent Kroll cases in Nigeria have included:
- Asset tracing and recovery: Kroll was retained by a leading Lagos-based banking group to conduct a global asset search into a high-profile Nigerian businessman active in the midstream and downstream domestic energy sector. Against the backdrop of a steeply declining oil price and reduced margins in the petroleum distribution business, the target had defaulted on multiple and substantial loan obligations to the bank. Kroll’s role was to identify assets – held by him, his registered companies or his numerous family members who had been named on loan documentation as guarantors – that might be attached or liquidated as part of an effort to reduce the bank’s exposure.
We conducted a comprehensive international investigation, drawing widely on publically-available material, such as corporate records, media reports and legal and regulatory filings, supplemented by and cross-referenced against commentary from well-placed sources within the Nigerian business community. These sources – some drawn from Kroll’s longstanding network in Nigeria, but others identified, cultivated and debriefed specifically for the purposes of the assignment – were to prove instrumental in pointing towards new lines of enquiry. Our source intelligence originated in Nigeria but typically led outside the country, shedding light on the target businessman’s lifestyle, profile, relationships, international patterns of movement, and personal asset base.
Over a period of two months, we identified a wide range of assets across several jurisdictions, including Nigeria, South Africa, UK, Dubai, Canada, US, France, Switzerland, British Virgin Islands (BVI), Mauritius, Jersey, Guernsey and Isle of Man. The assets identified included petroleum storage depots, coastal oil tankers, numerous corporate shareholdings in Nigeria and elsewhere, domestic real estate, two private jets, overseas apartments, polo ponies and polo stables, high value sports cars and other personal assets. In parallel to our primary role identifying international assets through research, Kroll also worked closely with the bank’s legal counsel to advise on the “recoverability” of the assets, their estimated market value, the suitability of the jurisdiction for attachment/enforcement action, the recommendation of effective legal partnerships outside Nigeria, and the broader case strategy.
- Market entry strategy: We recently advised a multinational consumer goods company on its move into the Nigerian market, helping them to navigate the complicated Nigerian political system and to understand more about their supplier and distributor risks. This enabled the client to structure its entry in a way that would allow it and its local partners to take best advantage of what is a very exciting opportunity in a market of some 170 million.
- Fraud investigation: We recently helped a UK-based private equity firm investigate a large scale fraud in relation to diesel procurement in one of its portfolio companies in Nigeria. This involved imaging the laptops and email servers of the suspects, carrying out a forensic review of the books and records and supplier payments, interviews with members of staff, and intelligence gathering on the external actors who had colluded with the employees to make the fraud possible. We were able to quantify the scale of the loss, to support their legal team in making recoveries, and to advise on procedures to reduce the chance of a similar fraud re-occurring.
- Anti-bribery and corruption: We are currently supporting an emerging markets focused financial services business which is expanding into West Africa, including Nigeria. We are helping to ensure they are hiring capable in-country staff who have the right credibility and reputation, and to screen investment and partnership opportunities for bribery and corruption risks. This will ensure their regional expansion takes place in a way that keeps their assets, their brand – and most importantly their customers – secure and prosperous.
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L-R: Right Honourable Mark Simmonds, Senior Consultant, Kroll; Bolaji
Balogun, Chief Executive Officer, Chapel Hill Denham and Alex Booth, Associate
Managing Director, Kroll at a Meeting in Lagos recently
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