Global fund and Chemonics conspired to intimidate and blackmail Zenith Carex
The Global Fund, an international financing and partnership organization that aims to “attract, leverage and invest additional resources to end the epidemics of HIV/AIDS, tuberculosis and malaria to support attainment of the Sustainable Development Goals has unjustly refused to honor an agreement reached with a Nigerian indigenous company, Zenith Carex (‘Zenith’), between may 2017 and March 2020.
Between may 2017 and march 2020 Zenith Carex, a sub-contractor of Chemonics International (‘Chemonics’), successfully executed and managed an integrated supply chain for Global Fund Principal recipients in Nigeria and the United States Agency for International Development (USAID) , but in April 2019-March 2020, the Global Fund Nigeria Country Team alerted the Global Fund Office of Inspector General (OIG) after Chemonics made a request for additional funds and forecast multi-million-dollar budget overruns on their fixed-price Global Fund contracts due to the some exigencies during the execution of the project.
During the period, all transactions were properly documented. Consignments were duly delivered to the appointed/appropriate locations and all paper works signed.
But the problem started when Zenith Carex demanded for 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.
But, in order to oppress and cheat this indigenous Nigerian company, The Global Fund, an agency established by the United Nations, in a series of petitions, alleged that Zenith Carex defrauded Global Fund-supported programs 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 in an attempt intimidation blackmail and defamation of character of a Nigerian indigenous company, engaged the Global Fund Local Fund Agent (LFA) to examine potential causes of the overspend, which led to the identification of numerous unsupported sub-contractor expenditures.
As 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.
During their ‘gangaroo’ investigation, Chemonics’ Office of Business Conduct (OBC), cooperated closely with the Global Fund OIG and provided extensive documentation. The Global Fund OIG and Chemonics OBC conducted a joint field mission to Abuja in February 2020 and Zenith assisted investigators by attending interviews but, in order to oppress and cheat the Nigerian company, Global Fund, came with spurious allegations, alleging that Zenith inflated distribution invoices up to ten-fold and misrepresented the services executed, resulting in overcharging of US$3 million.
OIG/GF in a report that was filled with misrepresentation of facts and distorted information in a clear act of racist and also said; Chemonics’ controls were ineffective in identifying the fraudulent invoices. Staff were negligent in reviewing the invoices and supporting documentation, and approved inflated invoices that were not in line with the contracts, for over two years.
They also 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.
Saying Zenith’s tender submission contained willful errors and omissions, and suspicious bid pricing.
They also said Chemonics’ inadequate financial monitoring in the local office and Headquarters led to retrospective identification of cost overruns, making it more difficult for Chemonics and the Global Fund Secretariat to identify the fraud thereby asking for a refund of US$712,588, or 93% of the total charges, by invoicing for truck tonnage (the gross weight of the trucks used to transport goods) supplied by Zenith.
Meanwhile, Zenith Carex has written the 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.
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