Firm petitions Osinbajo, tackles MasterCard over $100m ID card investment

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An indigenous Information Technology firm, Chams Consortium Limited, has petitioned the Vice-President, Prof Yemi Osinbajo, accusing Mastercard of breach of confidence and frustration of the consortium’s National Identity Card Concession project to which it invested over $100m.

In a letter to Vice-President Yemi Osinbajo by the Chairman, Board of Directors, Chams Consortium Ltd., Sir Demola Aladekomo, dated April 24, 2019, the consortium alleged that Mastercard’s unwholesome business practices had brought great loss to the company and the nation.

It, therefore, sought the intervention of Osinbajo to persuade Mastercard to accept wrongdoing, apologise for the breach of contract and pay compensation to Chams Consortium Ltd. and Chams Plc for their accumulated losses.

Commenting on the alleged breach, Aladekomo said, “We bring to your attention the unwholesome business practice of Mastercard which has brought great loss to Chams Consortium Ltd, Chams Plc, Nextzon Ltd and the Nigerian economy. MasterCard joins the class of international companies that through underhand practices, have frustrated the National Identity project.

“In 2006, Chams Plc was invited by the Federal Government to bid for the National ID project. Chams Plc competed and emerged the preferred bidder for the Nigeria National Identity Card concession. Before and upon the execution of a concession agreement with the National Identity Management Commission, Chams Plc pursued the implementation of the NIC concession by incorporating Chams Consortium Ltd, a Special Purpose Vehicle with the sole purpose of implementing the NIC concession. Chams Plc holds a majority shareholding in CCL. Chams Plc also invited Mastercard to work with the Chams Group as one of its technical partners on the NIC concession. To our surprise and disappointment, Mastercard went on to collude with our client, NIMC, to frustrate the concession won by Chams.”

On receiving the Letter of Award on May 25, 2007, Aladekomo said Chams Consortium Limited invested to the tune of over $100m into the facilities/ infrastructure needed to implement the National ID card project and deliver cards to 100 million Nigerians by the Year 2009, according to the mandate given by the then former President Chief Olusegun Obasanjo’s administration.

The Chams boss listed the facilities to include 6,000 enrolment stations in six Chams Cities and all the Local Government Areas of the country, where 800 jobs were created; a card personalisation centre in its Abuja office, capable of delivering 1.75 million cards a day; and four data centres with identity and payment switching facility, designed to manage identities of 100 million Nigerians and their financial transactions.

According to him, the IBM and HP data centres in four locations with 300 workers have been frustrated by the malpractices of Mastercard.

Aladekomo decried further that the Central Bank of Nigeria granted the Chams Group various licences for prepaid card issuance, switching, mobile banking, independent ATM deployment, and POS deployment, purposely for the National ID project but were all frustrated and wasted by Mastercard.

Explaining the genesis of the alleged breach, Aladekomo said, “MasterCard Asia/Pacific Pte Ltd (MasterCard) entered a Memorandum of Understanding with Chams Plc by which the parties noted that they were considering working together to facilitate the issuance of identity cards to Nigerian citizens. On November 18, 2012, CCL also entered into a Customer Business Agreement with Mastercard, setting out the obligations of both parties. The CBA contained several clauses including non-disclosure and non-compete clauses.

“In the context of the Mastercard/Chams Agreements, Mastercard was provided with a copy of the exclusive and confidential Concession Agreement granted to CCL. Over a period of many months, Mastercard worked closely with Chams on the architecture of the National ID project designed by Chams. Chams exposed the entire architecture to Mastercard while working jointly to integrate Mastercard’s payment functionalities into the architecture of the National ID project. In the course of these developments, Mastercard received confidential information from Chams as contemplated under the CBA.”

Aladekomo explained that his company also formally introduced Mastercard to the NIMC as its technical partner, noting that Mastercard and NIMC had no business relationship prior to the formal introduction.

“CCL granted Mastercard access to NIMC as a signed-on partner under the concession agreement. Thereafter, Mastercard started having secret meetings with NIMC without informing, inviting, involving or updating Chams who brought them into the scene as partners,” he said.

He explained further, “As a product of these meetings, MasterCard eventually entered into an agreement with NIMC to the exclusion of ChamsConsortium, Chams Plc and Nextzon. This agreement was a direct breach of MasterCard’s CBA obligation not to compete with CCL or use any information disclosed under the CBA for purposes other than the CBA’s implementation.”

Aladekomo explained that since Chams Plc had no financial muscle to take legal action against Mastercard and seek redress against the clear breach of confidence and infidelity exhibited by Mastercard against Chams Plc, the company was persuaded to explore amicable settlement with the global payment solution provider.

The Chams boss recalled that a former Director General of NIMC, Chris Onyemenam, had publicly acknowledged that Mastercard didn’t disclose to the government-owned identity management agency that it had an agreement with Chams before NIMC signed its agreement with Mastercard. Onyemenam was said to have encouraged the two parties to resolve the matter.

“In a show of remorse following Onyemenam’s accusation of Mastercard, an onerous draft Technical Support Agreement was sent by Daniel Monehin of Mastercard to Chams Plc for execution in December 2013, offering a paltry sum of $500,000.00 against the more than $100m CCL had invested on the National ID project,” Aladekomo decried.

He added, “We are aggrieved by the betrayal of our trust and confidence by Mastercard. Mastercard willfully side-tracked Chams using the knowledge and opportunity provided by Chams. We consider this act of bad faith as not just a breach of a contractual obligation owed to Chams under the terms of the Chams/MasterCard agreements, but also a betrayal of our trust and a great disdain of our nation, Nigeria.”

He, therefore, asked Osinbajo to intervene but every effort made to get MasterCard to react to the petition through its Public Relations Agency, Weber Shandwick, proved abortive.

Our correspondent made several calls to the agency and sent an email but had yet to receive a response as of the time of filing this report.

Further efforts to reach the Manager for Africa, MasterCard, Geraldine Grealey, proved abortive as her number was not reachable.

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