A luxury yacht, ‘Galactica Star’ bought by Nigerian oil and gas businessman Kolawole Aluko for $82 million in 2013 is now a subject of litigation as Enron Nigeria Power Holdings (ENPH), a former unit of the energy-trading giant, Enron Corporation battles Nigerian and US governments over proceeds from the sale of the 213-foot vessel.
This litigation is coming 19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history.
The US authorities seized the Galactica in 2018 after filing a lawsuit to recover assets it said were acquired by Aluko.
Prosecutors alleged in a forfeiture complaint that Aluko bought the yacht with the proceeds of bribes paid to Diezani Alison-Madueke — the first female president of the Organization of the Petroleum Exporting Countries (OPEC) and a former Nigerian Petroleum Minister.
To defray the costs of maintaining the Galactica while the case progressed, the boat was auctioned for $37 million in 2019 and then renamed Illusion. In May, after Nigeria dropped its claim to the funds, a Texas court agreed that the proceeds should be retained by the US government.
The legal tussle pitting ENPH against the US and Nigeria over the yacht is an offshoot of a protracted saga centering on Alison-Madueke, who served as Nigeria’s oil minister from 2010 to 2015.
ENPH claims it is entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a power plant.
They further claim the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them, positing that Nigeria dropping its claims was “a recognition of the factual and legal basis” in a US Department of Justice (DOJ) court filing.
The vessel, which DOJ says Aluko bought for $82 million in 2013, was sold last year to avoid monthly maintenance costs of $170,000 that were eroding the sum that stood to be recovered from the vessel, according to court filings.
The overarching forfeiture claim against $144 million of assets the DOJ says was acquired by Aluko is currently on hold pending the resolution of a criminal investigation into related allegations, the filings show.
The boat features a glass-bottom jacuzzi, a sky lounge bar, and marble bathroom fittings. In his heydays, the boat had play host to numerous celebrities including Naomi Campbell.
Aluko and his business partner Olajide Omokore are alleged to have funded “a lavish lifestyle” for Alison-Madueke in exchange for lucrative contracts from the Nigerian National Petroleum Corporation, (NNPC) that generated more than $1.5 billion.
The two “laundered their illicit revenues into and through the US,” according to the complaint filed in 2017.