INVESTIGATION: How Nigerian Breweries protected its Dutch CEO suspected of corruption

Heineken suddenly transferred the Managing Director of Nigerian Breweries, Nico Vervelde, to Singapore shortly after Nigerian police interrogated him for alleged corruption.

This case would have been buried if journalists Olivier van Beemen and Femke van Zeijl had not picked it up. They recently won De Tegel, the most prestigious award for journalism in the Netherlands, for their revelations about high-end corruption at Nigerian Breweries, a subsidiary of the multinational Heineken. Now PREMIUM TIMES presents their award-winning story for the first time to a Nigerian audience.

I – Nigeria, the Promised Land

On February 6, 2017, Nico Vervelde gives an interview to the Dutch weekly Elsevier. The managing director (MD) of Heineken’s subsidiary, Nigerian Breweries (NB), does not get any critical questions. At the Radisson Blu in Ikeja, Lagos, he talks freely about his life as an expat (‘I love an international environment’), the phenomenal success of his company and his love for golf and jogging. He has been living in the country for seven years and has no plans to move. ‘I’m having a great time in Nigeria.’

Less than three months later, Mr Vervelde suddenly resigns and is transferred to Singapore for a role that is yet to be specified. There is no successor yet. What went wrong?

Mr Vervelde is not just anyone. As the MD for Heineken in Nigeria, he’s considered to be one of the most successful managers of the world’s number two brewing company (after AB Inbev). Nigeria is in the top 3 of its most profitable markets in the world and by far the most important African country: it delivers about half of the brewer’s revenue continent-wide. At the international headquarters in Amsterdam (Netherlands), Nigeria is sometimes referred to as ‘the promised land.’

What the Elsevier story doesn’t say is that one month before the interview, Mr Vervelde was interrogated at the headquarters of the federal police in Abuja. The questions he had to answer there were considerably more challenging. The police wanted to know everything about a notorious corruption case in which his wife was the prime suspect and he a key witness. The case made headlines in Nigeria and internationally, but was never followed up.

To understand what has happened, we have to go back to a jet-set party in Lagos in 2013, attended by the oil trader, Amadu Sule. On that occasion, Mr Sule is introduced to Clémentine, a woman he describes as ‘not young but stunning’. She gives him a business card in the name of her company, Limitless Mind Africa, specialised in musical productions, conferences, artist management ‘and more.’

This is no exaggeration. Clémentine does more, much more. Consultancies, for instance, and managing a network of excellent connections. She has a nice proposition: Would Mr Sule consider becoming the oil supplier for Nigerian Breweries?

Coming from the Islamic north and remembering that his recently departed father had always forbidden him to do business with alcohol producers, he hesitates. But he is not that strict himself, and besides, it dawns on him that this is not a matter of a few barrels of diesel for some lorries.

Most of the breweries rely completely on generators that consume millions of litres every year. Of course, he’s interested!

But what about the public tender? As a listed company and part of a multinational with operations around the world, Nigerian Breweries has strict procedures for these kinds of contracts. Nothing to worry about, assures Clémentine. In exchange for a fee, she will arrange everything, starting with meeting the MD, Mr Vervelde. Mr Sule is impressed by her straightforwardness and has a good feeling. It is only when he arrives at his home and puts the two call cards next to each other that he notices they carry the same surname. But he considers it impolite to enquire further.

Shortly thereafter, Mr Sule is invited to the Vervelde home in upmarket Banana Island. Here, he also meets Jasper Hamaker, the finance director at Nigerian Breweries. Sule: “He saw opportunities for me,” Mr Sule says. And indeed there were. In the autumn of 2013, TMDK Oil Traders, Mr Sule’s company, became the oil supplier for the Kaduna and Ama breweries. The latter is Heineken’s largest brewery on the continent, located near the city of Enugu. The contract is valid for three years and Mr Sule claims he makes an oral agreement with Clémentine for another two years. Nigerian Breweries is expected to buy 3 million litres per month, making the entire deal worth some $60 million. They agree on a first payment: $200,000 in cash. “I paid and she chucked out the previous supplier,” the businessman recalls.

But the honeymoon does not last. Irritation arises when Mr Sule is accused of delivering sub-standard oil, supposedly causing a fire in the Ama brewery. An internal inquiry concludes there is nothing wrong with his product and rumours circulate that the fire may well have been the result of arson, an attempt to tarnish Mr Sule’s name. And then there is a drastic reduction in the monthly orders, as the breweries makes a partial change from oil to gas, another setback for Mr Sule. The oil trader says that this is in breach of his deal he had made with Clémentine. Meanwhile, she keeps asking for more money.

And she’s not the only one. “Everybody has to be bought off,” Mr Sule says, “also at the lower levels.”

A Dutch former internal source confirms that suppliers routinely have to pay bribes. “A guard charges you N100 to let you in. At a slightly higher level, you pay N1,000 and once you’re at the level of the financial controller, you easily need a couple of million naira if you want to get paid. That’s how it works.”

Mr Sule is fed up. His people, the Fulani, are known to be proud and headstrong, and he comes from an influential family: they are messing with the wrong guy. When the controller and a colleague demand another $20,000, he pays. But this time he does it through the bank, with proof of payment. He then confronts the top management of Nigerian Breweries and the auditing department. The company is forced to react: both employees are fired and an internal inquiry gets underway, leading to more dismissals. Amsterdam Head Office is also informed and starts its own investigation.

However, Clémentine Vervelde—nicknamed ‘Madame’—keeps asking Mr Sule for money. According to the businessman, the total amount is $878,000 at the time he discovers that Nigerian Breweries was swapping his company for another. He claims to know that the company in question is Forte Oil, a long-standing Heineken supplier, but the multinational insists that it is a different supplier. In the end, he finds himself deprived of the extra two years he says he has been promised and for which he claims to have paid ‘Madame’ an extra commission.

Mr Sule, now angry, visits the Vervelde’s residence, where he tells Mr Vervelde that his wife has been playing games with him. Mr Sule says the MD threatens him. “Don’t you dare take on Nigerian Breweries,” Mr Vervelde is supposed to have said. “Nobody does that, we’re too powerful. You had a three-year contract. That’s over now. It’s best you leave quietly.”

II – THE CRIMINAL INVESTIGATION AND INTELLIGENCE DEPARTMENT

The federal police headquarters is located at the Louis Edet House in Abuja, named after the first Nigerian inspector general, who took over from the British in 1964. It is an imposing white edifice, standing in an area with many other public sector buildings. The president resides in the Aso Rock Presidential Villa, a few minutes’ drive away; Parliament and the High Court are also nearby.

Louis Edet House — and more precisely the Criminal Investigation and Intelligence Department – is where Clémentine and Nico Vervelde present themselves on January 23, 2017. The department is a special elite unit of the Nigerian Police – it also deals with Boko Haram. Mr Sule is suing Clémentine for fraud and the case is taken seriously enough for her to be named as the suspect. Mr Vervelde and some other board members and managers at Nigerian Breweries are being heard as witnesses.

On this day in January, the police motto ‘The police is your friend’ doesn’t apply to the Verveldes.

The commissioner ignores telephone calls from influential compatriots, recruited by the beer brewer’s top management (according to an internal source) to put pressure on the police to drop the case. Before the interrogation, Nigerian Breweries’ lawyer was issuing threats: “This is a large company. Whatever it is you are planning to do, I’d be careful.” However, the police are not to be intimidated. Their case is solid, according to insiders.

Mr Vervelde has a hard time. “After twelve hours of questioning he looked terrible, he had suddenly aged ten years,” one of those present remembers. With Clémentine, it’s not as clearly visible, but she suffers too. From the same source: “The commissioner played a very smart game. He sat at his desk, behind a huge pile of papers. She could not handle the situation and just kept on talking. He was feeding her, waiting for the exact right moment to give her another morsel by asking the right question.”

At first, Clémentine denies everything, but in the end, she admits that she has taken money. For others, she adds. The commissioner piles on: “Well, in that case, I would imagine that it’s in your interest, too, that we pursue our investigation thoroughly.” Relieved, Clémentine wants to go home, but she needs a guarantor for her liberation or else, she would have to spend the night in a police cell. The commissioner comments: “I’m afraid you will find the accommodation we offer here not up to the standards you are accustomed to.”

Various sources state that the guarantor turns out to be Femi Otedola, Forte Oil’s top manager and one of Nigeria’s richest businessmen. Remarkably, Nico Vervelde has been on the board of this supplier since December 2016, as a supervisor. Clémentine may go, but she’s considered a flight risk and has to leave her passport behind.

In the end, it doesn’t come to a trial. Mr Sule agrees to a settlement of more than two million dollars, an amount largely in excess of what he has paid in commissions. Heineken decides to clean up its Nigerian subsidiary: those directly or indirectly involved have to look for other jobs and Mr Vervelde disappears to South East Asia.

Sources within the police say that the Heineken manager can count his blessings.

“Had this gone to trial, he would have been prosecuted for abuse of power. Why did Clémentine have an office paid for by Nigerian Breweries while the company did not employ her? Abuse of power is a form of corruption, which is punishable. The prison sentence depends on the evidence provided: it can be anything between three and seven years,” a police source said.

Moreover, and in relation to the case, the police also discover that Nigerian Breweries has been evading taxes.

“Each contract of this nature implies payment to the revenue authority. Nigerian Breweries had promised to pay N120 million in withholding tax on behalf of Sule, who later discovered that the company had only paid 19 million. So that is a N100 million fraud case,” the source said.

Heineken denies that its subsidiary was involved in tax evasion.

III – NOT AN INCIDENT, BUT A SYSTEM

“A good shopkeeper, a solid director, one that every company needs.” That is Nico Vervelde, as described by a former colleague: “But I did find him a little hesitant, slightly weak. And if your wife happens to be larger than life, you’re being overshadowed. It was never clear who was in charge:

Mr or Mrs Vervelde. That does not work in Nigeria. You must always be hyper-alert and radiate authority.”

The former colleague finds it strange that Mr Vervelde still works for Heineken. “This is not the first time his wife has been linked to controversial practices, and he has always maintained that he knew nothing of her activities. We found that questionable. I assume that in a marriage there is no Chinese wall.”

“Nico must have known,” says a former manager who worked frequently with him. “He comes across as someone with integrity and his reputation is good. At first, I really thought he didn’t know, that he was naïve. But it’s simply impossible. It’s too big, it has too many tentacles. And he’s the boss.”

Various sources within the company say that the TMDK Oil Traders affair is just the tip of the iceberg and that it is unfair to blame just Clémentine (and Nico) for everything. What emerges from a series of conversations with those directly involved is the image of senior managers, both Dutch and Nigerian, indulging in all kinds of controversial deals and shady business practices in order to enrich themselves. It infected the entire organisation. An insider speaks about a company “rotten to the core, with fraud and corruption happening at every level.” He remembers the first clean-up. “It was mainly cosmetic. The top echelon stayed in place and the system did not change. Almost everyone gets their share, so what you have is a tight and unbreakable chain.”

The system revolved around Clémentine. “Everyone in the industry knew that she held all the power,” says a former Nigerian manager. “If you wanted to get anything done at Nigerian Breweries, go see Clémentine.” Whether it was a house for a new expat or airline tickets for a business trip, everything went through her hands. With Limitless Mind Africa, her company, she frequently organised conferences for Nigerian Breweries, usually at the Eko Hotel on the luxurious Victoria Island in Lagos. According to insiders, the hotel director Danny Kioupouroglou, who was a good friend, would give her a substantial discount while she would overcharge the brewery and pocket the difference.

Clémentine was also involved in sponsoring contracts, from small cultural occasions to major television events, and again there are indications of misappropriation. One person involved says:

“You would go to such an event we were sponsoring to the tune of N40 million without any idea where the money had gone. The figures were often highly dubious.”

After the settlement with Mr Sule, many sponsoring contracts were abruptly ended. A prize for visual artists and a famous writers’ workshop organised by best-selling author Chimamanda Adichie did not survive. Heineken says these were austerity measures, but close associates are convinced that the real reason is that the managing director’s wife was involved. This time, a real house-cleaning was needed.

IV – GREAT CONNECTIONS WITH THE CEO

Clémentine Vervelde-Murekatete, which is her full name, was born in Rwanda where she maintains good relations and commercial interests. For instance, she mentioned to Mr Sule that RwandAir, the national airline with daily flights from Lagos into Kigali, could be another potential client. In Rwanda itself, Clémentine runs a transport company, about which a former Heineken top manager has this story: “She said that she’d be given a contract with our brewery to use those lorries but the director said: I don’t know anything about that, we don’t work that way. Next thing we saw was Ms Vervelde kicking up an almighty fuss, going all the way to the highest level in Amsterdam to get what she wanted. And again, Nico supposedly didn’t know. This I find hard to believe: a woman is investing in lorries to deliver beer, her husband is a man from the beer business—and they wouldn’t discuss these things?” Various inside sources say that, after the Executive Board intervened, Clémentine was allowed to distribute the crates of beer, which Heineken denies.

Nico and Clémentine met in the early 1990s after he had been appointed marketing director at the Heineken subsidiary in Rwanda. He succeeded none other than Jean-François van Boxmeer. Several sources who know the Vervelde couple confirm that they have had close ties with the chairman of Heineken’s Executive Board for well over twenty years and consequently enjoy some form of ‘protection’. One manager in Nigeria was struck by how quickly Clémentine knew about matters that had been relayed confidentially to Head Office. “Without protection, Nico would no longer be working for Heineken,” says a former colleague. Those in the know are also astounded by the fact that Mr Van Boxmeer allowed Nico Vervelde to take up the board position at Forte Oil, an important supplier. “That smells very strongly of a conflict of interest. In the Netherlands, this would very likely not have been permitted,” a former director in Nigeria says.

Has Heineken committed punishable offences in Nigeria? “If this story is correct, then we’re looking very likely at a classic case of corporate criminality, in this case, bribery and private corruption,” says Wim Huisman, a professor in criminology at the Vrije Universiteit Amsterdam.

“Bribery is often linked with governments but that does not need to be the case. When companies do it, the law applies as well. Mind you, it is not illegal to award contracts to those close to you, but when bribes have been paid it’s a different story.”

A former expat is outraged: “To me, this represents everything Heineken does not stand for.

“Everywhere in Nigeria, we write INTEGRITY in capital letters and we forbid our drivers to pay even the smallest bribe. We want to show that you can function in a climate where fraud pervades, that you don’t have to participate. And now that it is supposedly happening at the highest level it should all be swept under the carpet? No way.”

ON THIS STORY

Heineken asked us not to publish this story, not because it is not truthful, but because it would be too painful and damaging to Nico and Clémentine Vervelde. Nico Vervelde refused to be interviewed for this story. We were only allowed to ask written questions.

This article is based on almost a year of investigation, both in Nigeria and the Netherlands and on dozens of conversations with people involved. Many sources wish to remain anonymous, because of potential consequences. Their names have been shared with the editor of Follow the Money, the Dutch website where this story was first published.

HEINEKEN’S REACTION

Heineken reacted extensively to this story and does not deny the settlement took place, nor that there was widespread corruption taking place within its Nigerian subsidiary. Heineken states that the Verveldes claim themselves they are not corrupt (but the company doesn’t state: De Verveldes are not corrupt).

Heineken writes that it conducted several internal investigations, ordered both by the mother company and NB, after the complaint on corruption from Mr Sule. For the company, the results were no cause for disciplinary actions against Nico Vervelde. However, the situation had become ‘unworkable’. Mr Vervelde resigned and was offered another position, “partly because of his experience and track record.”

Heineken admits that CEO Jean-François van Boxmeer and Nico Vervelde have known each other for a long time, but claims that does not give Mr Vervelde any privileges. The company states its Integrity Commission is carefully examining allegations of corruption and fraud, with the help of the Global Business Conducts and Internal Audit departments.

Heineken denies that Clémentine Vervelde got a contract for beer transports in Rwanda and claims there was no question of tax fraud in Nigeria. “There is no withholding tax for the local delivery of goods, in this case, petrol and diesel. There is only withholding tax for the delivery of some services, which has been applied in this case because TMDK delivered not only diesel but also service. So there is no base for these allegations.”

Source: https://www.premiumtimesng.com/news/headlines/350188-investigation-how-nigerian-breweries-protected-its-dutch-ceo-suspected-of-corruption.html