The directive by the Nigerian Supreme Court is not being adhered to strictly.
Contrary to what the Bureau for Public Enterprises, BPE, want Nigerians to believe, last week’s letter to BFIGroup directing it to take steps to take over the $3.6 billion (N540 billion) plant from UC RUSAL may have been in blatant defiance of the Supreme Court order on the issue.
BFIG is the American-Nigerian consortium reinstated last year as the authentic winner of the 2004 bid for the Aluminium Smelter Company of Nigeria, ALSCON, in Ikot Abasi, Akwa Ibom, after its declaration as preferred bidder was nullified by the BPE, which transferred the plant to UC RUSAL, disqualified previously for violating stipulated bid guidelines.
The Supreme Court in its July 6, 2012 judgment in the case filed by BFIG against BPE gave an order for specific performance pursuant to BFIG’s reinstatement as the bonafide owner of ALSCON.
The apex court directed the BPE to ensure that it brought forward the agreement it signed with BFIG in 2004 for exhaustive deliberation, review and modifications by all parties to establish a mutually agreed and commercially reasonable share purchase agreement, SPA, for execution to move the process forward.
Fundamental to drafting a ‘mutually agreed SPA’ was the determination of the current value and condition of the plant after its management and control have been in the hands of UC RUSAL since 2006.
A scheduled visit by a stakeholders’ technical assessment team constituted by the National Council on Privatization, NCP, with a mandate to work with BFIG engineers on a comprehensive evaluation of the plant to determine its current condition and operational state pursuant to the apex court’s order, was aborted indefinitely on November 21, 2012.
UC RUSAL’s management, which has consistently rejected the Supreme Court’s ruling, had refused to guarantee the visiting delegation the necessary logistics, including provision for their security and safety, accommodation and other protocols required to achieve their mandate.
While BFIG management was putting on standby the 14-man technical team it mobilised from within and outside Nigeria pending when the visit to the plant would be rescheduled, the BPE, last week, went ahead to issue the letter and SPA, which close followers of the ALSCON crisis say is far from being finalised.
PREMIUM TIMES investigation reveals that the SPA issued by BPE along with its offer letter of January 29, 2013 to BFIG deliberately ignored the detailed amendments by BFIG to the initial draft agreement issued on October 8, 2012.
The amended draft SPA returned to BPE on October 23, 2012 captured, among other key issues, the fact of the current valuation of the plant at about N14.57 billion or $91 million, as reflected in the December 31, 2011 audited financial accounts of ALSCON prepared by the accounting firm of KPMG and filed at the Corporate Affairs Commission, CAC.
However, last week’s SPA, which the Bureau wants BFIG to execute, made reference to the Memorandum of Understanding, MoU that was signed by about 21 stakeholders that attended the May 20, 2004 pre-bid technical conference. At the conference, irrevocable commitments were made towards June 14, 2004 financial bid exercise, during which BFIG emerged the preferred bidder with an offer of $410million for ALSCON.
Further investigations revealed that BPE may have glossed over four fundamental decisions that should have preceded its letter last week asking BFIG to prepare to execute the SPA by paying 10 per cent of the offer ($41 million) within 15 working days of the signing of the SPA, to give effect to the Supreme Court order.
Smith Ekanem, an Abuja-based investment analyst and consultant queried BPE’s sincerity in handling the apex court order, pointing out that the privatisation agency appears not ready to hand over ALSCON to BFIG as directed.
Mr. Ekanem, who claims to have participated in similar transactions in places like U.K. and UAE, said before the letter and SPA to BFIG, BPE should have effectively retrieved ALSCON from UC RUSAL by formally revoking the share certificate issued to them in the wake of the controversial transfer of owner of the plant to the Russians on February 3, 2006.
“BPE cannot claim to have satisfied all the conditions spelt out by the order of the Supreme Court on the transfer of ALSCON to BFIG when it is yet to physically take possession of the plant,” Mr. Ekanem noted.
“With UC RUSAL still in possession of the share certificate of ALSCON, and the Board of Directors of ALSCON, currently supervised and operated by UC RUSAL, yet to be dissolved, and a change of ownership of ALSCON yet to be filed by the Ministry of Finance Incorporated with the CAC to reflect BFIG, it is doubtful if BPE is moving in the right direction”, he added.
According to the investment analyst, with none of these issues resolved, the letter and SPA issued by BPE appears fraudulent, as it would amount to putting the cart before the horse.
BFIG yet to react
Meanwhile, BFIG is yet to issue a formal statement since BPE transmitted the offer letter to its President, Reuben Jaja, last week.
But, Mr. Jaja, who spoke to our reporter on phone on Tuesday said the American-Nigerian consortium is fully committed and ready to fulfill all obligations necessary to enable it takeover ALSCON in line with the spirit and letter of the Supreme Court judgment.
“Yes, we have received the offer letter from BPE,” Mr. Jaja told PREMIUM TIMES. “We are happy that the offer letter finally arrived more than seven months after the order by the Supreme Court last July 6. We are still studying its contents closely and would soon make our response public at the appropriate time,” he said.
“But, let me assure all Nigerians that BFIG is fully committed and ready to take over full control of the plant in the spirit and intendment of the July 6, 2012 order of the Supreme Court to realise its full value that would meet the yearnings and aspirations of Nigerians.
“We have already assembled the best technical team that would partner with us to turn around the fortunes of the company. Our bankers are ready not only with initial payment as soon as the SPA is signed, but also the balance of the offer price that would be mutually agreed by all stakeholders,” he added.
BPE won’t talk
When PREMIUM TIMES contacted the BPE to explain its rational for taking the steps it took, its spokesperson, Chukwuma Nwoko, refused to respond to specific questions.
Mr. Nwoko, whose agency is at the centre of the storm, preferred to verbally assault our reporter instead of responding to the enquiries.
“Are you a lawyer?”, Mr Chukwuma snapped at the reporter on phone. “Look, that thing (letter and SPA) was drafted by lawyers. I am not a lawyer. If you are, I am not, and I am not going to entertain any questions on it. Are you working for BFIG?”, he said angrily before abruptly terminating the call.