An unsuccessful bidder for Nigeria’s telecoms company, NITEL, has launched a legal challenge against its sale to NATCOM Telecoms, an investment vehicle jointly owned by some Nigerian businessmen and some foreign investors.
Controversy has continued to trail the recent sale of the NITEL, and its mobile subsidiary, MTEL, with some interested buyers alleging manipulation of the privatisation process.
A consortium led by the Chairman of Skye Bank, Tunde Ayeni, emerged the preferred bidder for the national carrier with an offer of $252.25 million (about N40.36billion).
Mr. Ayeni has acquired several public assets lately, including Ibadan and Yola Electricity Distribution Companies and Mainstreet Bank.
However, one of the 22 companies that submitted expression of interest (EoI) to bid for NITEL/MTEL, Arabian Amlak Investment Limited criticized the “guided liquidation” strategy adopted by the Bureau of Public Enterprises, BPE, saying it was designed to favour certain categories of bidders against others.
The chief executive officer of the company, Muazu Omolori, said on Monday during a telephone interview with PREMIUM TIMES that of the 22 companies that expressed interest based on the advert by BPE, only Arabian Amlak received a response from the privatization agency.
The letter dated November 16, 2011, was titled: Re: Expression of Interest for the Acquisition of NITEL, and signed by Director of Information and Communication, Allwell Ibeh, had promised to contact the company “as soon as appropriate to discuss” the proposal.
Mr. Omolori was speaking against the background of a statement by BPE on Monday claiming it had no record of Arabian Amlak’s participation in any of its previous attempts to privatize NITEL/MTEL.
The BPE spokesperson, Chigbo Anichebe, said the company, which has filed a legal action to challenge the sale, was one of the companies that submitted “unsolicited EOIs” in August 2011 to acquire NITEL.
However, Mr. Omolori, who said he would not be able to talk much on his company’s position against BPE’s decision, to avoid jeopardizing its case in court, said under a normal bidding process all interested parties deserved a level playing field.
The company in its legal application criticized the sale of NITEL through guided liquidation, wondering why the government preferred to take an amount far less than $920 million it claimed it offered the National Council on Privatisation on a willing-buyer willing-seller basis.
Mr.Omolori said in a normal three-option bidding process adopted since 2009, comprising bidding, willing buyer/willing seller, and liquidation, the first option failed as a result the inability of the preferred bidder to pay the full bid price for the assets.
The second option, he explained, was only opened to indigenous companies expressing interest as the willing buyer and core investor for the asset.
Based on the company’s offer, Mr. Omolori said Arabian Amalk was invited to a meeting with the NCP Chairman and Vice President, Namadi Sambo, and asked to provide proof of the company’s financial capacity to fund the transaction.
According to Mr. Omolori, the company had asked for the demand to be conveyed in a formal letter to enable it instruct financiers to make the necessary transfers to an escrow account.
He said he was surprised that government later abandoned willing buyer/willing seller option, opting to liquid the asset without recourse to due process.
But, Mr. Anichebe said Mr. Omolori’s decision to challenge the process was “based on its inadequate understanding of our (BPE) processes.”
He said neither the NCP nor BPE entered into negotiations with Arabian Amlak on its “unsolicited offer” nor was there any letter of offer issued, if it emerged as reserve bidder.