An indigenous company, Zenith Carex, has appealed to the Federal Government to intervene in a trade dispute between its and Global Fund, international financing, and partnership organisation.
Zenith claimed that Chemonics International refused to honor an agreement reached with it between May 2017 and March 2020.
But Global Fund accused Zenith Carex, a sub-contractor of Chemonics International, of ‘invoice fraud’ resulting ‘in substantial overcharging’ into Nigeria’s supply chain.
The investigation report is titled, ‘Nigeria Supply Chain Sub-contractor invoice fraud resulted in substantial overcharging,’ published on the Global Fund website and dated March 9, 2021.
Reacting to the report, Zenith Carex said the Economic and Financial Crimes Commission was aware of the matter and it has invited the Country Coordinating Mechanism, the representatives of Global Fund in Nigeria.
The company said it had helped Chemonics International to distribute cold chains to 774 local governments in Nigeria, and that the Global Fund accusation was based on an error in long-haul costing.
In a statement, the Nigerian company which is a sub-contractor of Chemonics International (‘Chemonics’), said it executed and managed an integrated supply chain for Global Fund Principal recipients in Nigeria and the United States Agency for International Development.
“But the problem started when Zenith Carex demanded the balance of the payments for the projects they have executed which amounts to thousands of US dollars and had been unpaid in excess of the contractually stipulated 30 days.
“Zenith carex voluntarily terminated the contract due to breach of payment terms.
“Global Fund alleged that Zenith Carex defrauded Global Fund-supported programmes of US$3 million by systematically inflating invoices for the distribution of health commodities to warehouses and health facilities throughout Nigeria.
“But, in an attempt to deny them the payment of their balance, the Country Team engaged the Global Fund Local Fund Agent to examine potential causes of the overspend, which led to the identification of numerous unsupported sub-contractor expenditures.
“Neither the outcome of the LFA work nor statements from Chemonics fully explained the root cause or extent of the budget overruns, the Global Fund OIG allegedly opened a proactive investigation into potential fraud in the supply chain.
“Global Fund came with spurious allegations, claiming that Zenith inflated distribution invoices up to ten-fold and misrepresented the services executed, resulting in overcharging of $3 million.
“They alleged that there was evidence of collusion between Zenith and Chemonics staff, including a key Director who approved all of Zenith’s fraudulent invoices and who sat on the tender evaluation panel.
“Zenith Carex appeals to Hon. Minister for Health, Dr. Osagie Ehanire, to intervene in a letter he tagged; ‘Imminent International Intimidation And Bilateral Blackmail Of A Business Relationship/Partnership By Chemonics International INC SAII And Its Associates’, stating all that transpired and the scope of their business relationship.”