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Complaint Filed With UK Parliamentary Ombudsman on Alleged Misuse of Aid Cash by Private Equity Firms Linked to DflD

The DfID and its private sector arm, the CDC Group, have been accused of jeopardising criminal investigations into potential wrongdoing by two CDC-backed private equity funds.

8 May 2012

The Department of International Development (DfID) and its private sector arm, the CDC Group, have been accused of jeopardising criminal investigations into potential wrongdoing by two CDC-backed private equity funds and failing to investigate the alleged fraud of aid money thought to total $30m.

The claims have been renewed by British-born Nigerian campaigner Dotun Oloko following the sentencing last month of James Ibori, the former Nigerian state governor, for money laundering and fraud.

In a complaint submitted to the UK Parliamentary Ombudsman today (Tuesday 8 May 2012) by Mr Oloko’s MP, Caroline Lucas, the ombudsman will be asked to consider why there hasn’t been an independent investigation into investments by the two funds, Emerging Capital Partners and Ethos, in companies alleged to have acted as money laundering fronts for Mr Ibori.

It will also be asked to investigate why both DfID and CDC alerted the private equity funds directly of the allegations by Mr Oloko, in the process identifying him as the whistle blower making him fear for his life if he returns to Nigeria and the loss of his business in Lagos.

A report uncovered by Mr Oloko using the Data Protection Act, showed that Control Risks, a security firm acting on behalf of Emerging Capital Partners, placed both him and his family, including his children, under covert surveillance in the UK.Mr Oloko said:

“It is astonishing that at a time when the UK public are being asked to endure financial hardship DFID and CDC have failed and are still failing to refer credible allegations of fraud in excess of $30m in funds supported by UK taxpayers, to the appropriate criminal investigation agencies. On the basis of the same information that I provided at great personal risk in 2009 and, which DFID and CDC subsequently mishandled and dismissed, criminal investigations have commenced in multiple jurisdictions outside the UK.”

Caroline Lucas MP, said:

“The failure of DfID and CDC to properly investigate the allegations made by Dotun Oloko, who bravely raised the alarm about CDC-backed investments in Nigeria despite the threat to his personal safety, casts serious doubt on the checks in place to prevent UK aid money from lining the pockets of corrupt individuals.

“Furthermore, it is completely unacceptable that DfID was unable to protect the identity of this anti-corruption campaigner, resulting in his family being placed under covert surveillance right here on UK soil. It is fundamental to our Government's efforts to crack down on fraud that whistleblowers are able to come forward with impunity.”

Jamie Beagent of Leigh Day & Co, the solicitors who have advised on the Complaint, said:

“Dotun Oloko is a very brave man who risked everything to alert the authorities to institutional corruption on a huge scale. Those very authorities betrayed his trust and as a consequence he has lost his business and he and his family’s safety has been placed in jeopardy. I would urge the Ombudsman to carry out swift and thorough investigation into what went wrong, compensate Mr Oloko for what has happened to him and make recommendations to ensure this debacle is not repeated.”

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Jamie Beagent