Court ruling on ALSCON an error — BPE

The Bureau of Public Enterprises, BPE, on Tuesday dismissed as an “error” a ruling of a Federal High Court, Abuja, ordering it to enforce the July 6, 2012 Supreme Court ruling on the bid for the Aluminium Smelter Company of Nigeria, ALSCON, Ikot Abasi, Akwa Ibom State.

The reaction by the privatization agency is coming exactly two weeks after the High Court, presided by Justice Abubakar Abdul-Kafarati, upheld an appeal by BFIGroup, the Nigerian-American consortium that emerged winner of the bid for ALSCON, seeking an enforcement of its win.

BFIGroup’s lawsuit sought an enforcement of a judgment setting aside the nullification of its winning in 2004 by the BPE.

Justice Abdul-Kafarati, in his judgment of September 30, 2014 in suit No. FHC/ABJ.CS/901/2013 Supreme Court Appeal No. SC12/2008 by BFIG, had ordered BPE to “fully enforce and give effect to the meaning and intendment of the judgment of the Supreme Court dated 6th July, 2012 by signing and executing forthwith the mutually agreed Share Purchase Agreement, SPA.”

The judgment further directed BPE, based on the said Supreme Court ruling, to “forthwith take full control and possession of ALSCON from anybody, including UC RUSAL, et al, and prepare same for handover/transfer to the Applicant subject to the payment by the Applicant” of 10 per cent of purchase price.

BPE was also directed to accept the payment of 10 per cent of the purchase price of ALSCON, $41million, from BFIG within 15 working days of the enforcement order, not later than October 24, 2014.

The balance of $369million, the court said, should be paid as per Audited Financial Statement to be conducted by KPMG as at September 30, 2014.

To give effect to the judgment, the court said that BFIG, “its employees and agents shall forthwith have full, uninterrupted and unrestricted access to ALSCON to conduct a firsthand assessment of the business affairs of the Company, including engineering, technical, financial, accounting, facility, environmental, personnel, dredging and legal records pursuant to the decisions of the NCP (National Council on Privatisation.”

However, BPE in a statement on Tuesday by its Head, Public Communications, Chigbo Anichebe, denied handing over ALSCON to BFIG, or any other group for that matter, other than the present managers, RUSAL.

RUSAL, disqualified by the NCP during the bid exercise in 2004 for violating the bid guidelines, was later in 2006 handed over the management of the $3.6 billion plant in controversial circumstances.

“It is important to note that the Bureau only hands over Federal Government assets to those who bid and fully pay the bid consideration. BFIG has not paid a kobo,” Mr. Anichebe said.

According to Mr. Anichebe, BPE’s position on the issue has always been that it had performed its obligations under the Supreme Court decision of July 6, 2012, while BFIG failed to perform its part of the obligations.

“The result, in our opinion, is that BFIG has no right to the said shares,” the BPE spokesman said. “The decision of 30 September 2014 of the Federal High Court in Abuja in BFIG’s case against BPE to “enforce” the Supreme Court judgment, in our opinion, is in error.”

Mr. Anichebe pointed out that the High Court’s decision was already a subject of an appeal, which BPE and the NCP expect would be reversed in the appellate court.

BPE, he said, stands by its position that BFIG, having failed to comply with the Supreme Court judgment of July 6, 2012, has no right to the shares in question, or to the ALSCON plant.

The September 30 ruling by the High Court was the second by the Nigerian court ordering the BPE to respect the rule of law and uphold the decision of the NCP, which declared BFIG winner of the bid for ALSCON in 2004.

The Supreme Court had in unanimous ruling on July 6, 2012 ordered BPE to comply, by sacking UC RUSAL, current managers of the plant, and reinstate BFIG as the authentic winner of the June 2004 bid to acquire ALSCON.

The Court had asked BPE to invite BFIG and conclude negotiations they began in 2004 to establish a mutually agreed share purchase agreement for execution.

The order had included a perpetual injunction restraining BPE and its agents from unilaterally terminating the contract to BFIG. However, BPE had ignored the order.

Rather than invite BFIG to open negotiations based on the Supreme Court order, BPE issued a controversial offer letter dated January 29, 2013 entitled: “Offer to Purchase 77.5% shares of the aluminium shelter company of Nigeria, ALSCON.”

The letter was accompanied by a 16-page share purchase agreement, SPA, dated May 20, 2004, for execution by BFIG, rather than the 58-page agreement transmitted to it (BFIG) on October 8, 2012 for review and approval.

That agreement had captured detailed issues jointly negotiated with RUSAL in 2004 and later executed by the Russians on February 3, 2006 after ALSCON was transferred to them by BPE.

BFIG on receiving the letter, wrote to BPE seeking clarifications on the discrepancy on the unilateral “invitation to acquire aluminium shelter”, instead of the aluminium smelter it bidded for and was declared the preferred bidder.

However, rather than comply with the Supreme Court order, BPE, like it did in 2004, again revoked the offer, ignoring the discrepancies it the offer letter and SPA, which BFIG had sought clarifications to on more than one occasion.

The revocation of the offer had compelled BFIG to return to the court to seek the enforcement of the ruling in 2013.

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