The Federal Government on Tuesday said it had finally commenced moves to resolve the over 13-year-old crisis over the sale of the $3.2 billion Aluminium Smelter Company of Nigeria, ALSCON, Ikot Abasi, Akwa Ibom State.
The Minister of Mines and Steel Development, Kayode Fayemi, told State House correspondents at the end of his meeting with President Muhammadu Buhari in Abuja that the government was committed to bringing ALSCON and Ajaokuta Steel Company back to life.
“I came to brief Mr. President on the efforts that Mr. Vice President has been leading to ensure we have a definitive solution to the sale of the Aluminum Smelting Company (of Nigeria) in Ikot Abasi,” Mr. Fayemi said.
“We also moved forward in the resolution and agreement reached on Ajaokuta Steel so that we get ready for the second concessioning,” he added.
Mr. Fayemi did not give details of what was being done to resolve the dispute over ALSCON.
There are two orders of the Supreme Court on the matter that the federal government had refused to obey.
The minister, however, said a technical adviser has been appointed for the concession of Ajaokuta Steel Company, while a new management has been put in place following the expiration of the tenure of the previous leadership.
The latest move to resolve the ALSCON crisis is coming more than five years after the Supreme Court’s definitive ruling on July 6, 2012 after more than eight years of tussle over ownership of the plant.
Roots of crisis
In 2004, a Nigerian-American consortium, BFIGroup, was declared winner of the bid for ALSCON by the National Council on Privatization, NCP, with an offer of $410 million, after UC RUSAL lost out following its disqualification for violating bid guidelines.
But, the bid result was later cancelled in controversial circumstances by the Bureau of Public Enterprises, BPE, which reinstated the Russians.
The handing over of the plant to UC RUSAL in 2006 on the orders of then President Olusegun Obasanjo triggered a protracted legal tussle with BFIG till July 6, 2012 when the Supreme Court ruled in favour of BFIG as the recognized winner. UC RUSAL, backed by BPE, resisted the ruling.
Seven months later, on January 29, 2013, the BPE, ostensibly obeying the Supreme Court order, sent an offer letter to BFIG for “Purchase 77.5 percent shares of the Aluminium SHELTER Company of Nigeria, ALSCON”, a non-existent company, instead of Aluminium SMELTER Company of Nigeria, ALSCON.
The letter was accompanied by a 16-page SPA, which was rejected, as BFIG declared it was never interested in acquiring the shares of the ‘Aluminium SHELTER Company of Nigeria’.
Rather, the consortium said the only legal and acceptable document ordered by the Supreme Court was the 58-page SPA for ALSCON sent by BPE on October 8, 2012 for its review and approval.
BFIG said the SPA, which was similar to the one UC RUSAL signed in 2006, covered a list of 17 key items, including financial statements, post-acquisition plan, liabilities, assets, gas sales and purchase agreements.
BFIG’s refusal to sign the SPA for the non-existing ‘Aluminium SHELTER Company of Nigeria’ was used by BPE as reason to, again, disqualify it, forcing a return to the Supreme Court for an order to compel the BPE to fully comply with its 2012 order.
But on July 11, 2016, the apex court in a unanimous ruling reaffirmed its July 6, 2012 order, dismissing an application by UC RUSAL on November 4, 2015, that sought a review and vacation of the previous judgment.
In each of the two separate rulings, the Supreme Court had ordered the Federal Government, through its agencies – BPE and NCP, to invite BFIG and negotiate a mutually agreed share purchase agreement, SPA, with a view to handing over ALSCON.
UC RUSAL also sued the Federal Government at the London Court of International Arbitration, LCIA, seeking an award for alleged breach of contract, apparently to stop the execution of the Supreme Court judgment. But, the Russians were ordered to return to Nigeria to continue the case.
With the refusal of the Federal Government to obey the Supreme Court ruling, operations at ALSCON came to a halt, with the workers asked to go home.
Fayemi’s final games
Curiously, in April 2017, apparently in defiance of the pending Supreme Court order, Mr. Fayemi visited ALSCON and was received by UC RUSAL’s managing director, Dimitriy Zaviyalov, despite the company’s sack from the plant.
During the visit, Mr. Fayemi not only promised to work with the Russians to reactivate the plant, but also assured them of government’s commitment to “encourage the Supreme Court to expedite action on the ruling,” to “free the complex of any encumbrances.
Almost five months later in August, PREMIUM TIMES reported exclusively about a secret meeting brokered by the minister in an attempt to get BFIG to accept an out-of-court settlement deal with UC RUSAL in defiance of two subsisting Supreme Court orders on the issue.
The report revealed how the minister, along with BPE Director-General, Alex Okoh, and other officials, met with UC RUSAL agents, Danba & Associates Limited, led by its Chairman/CEO, Saadina Dantata, to compel BFIG to accept an offer to relinquish its legal rights to ALSCON on the strength of the Supreme Court ruling of July 6, 2012.
Mr. Dantata was appointed in a letter to BPE by UC RUSAL as representative and leader of a delegation from Danba and Beltech Exim to negotiate in the disputes over the ownership of ALSCON.
The minister has not denied the report more than two weeks since the publication, despite mails and text messages sent to his official and private emails and telephones.
His spokesperson, Yinka Oyebode, scrambled to exonerate his boss of any involvement in a plot to side step the rule of law, accusing our reporter of attempting to bring his integrity to disrepute.
But during the meeting on August 21, an initial $30 million offer was table by Mr. Dantata on behalf of UC RUSAL payable to BFIG over 20 years if it agrees to sign off all settlement agreements to terminate all outstanding legal cases in court in relation to the deal to acquire ALSCON.
It was gathered that following the rejection of the offer by BFIG officials, a follow-up meeting on August 28 later resolved to send an adjusted final offer of $35 million, consisting $20 million initial payment, plus another $10 million spread over 20 years, on the same conditions “in the spirit of an amicable settlement.”
BFIG’s rejection of the offer, it was gathered, angered Mr. Fayemi that he threatened to invoke government powers to revoke the entire ALSCON sale transaction if they refused to change their stance.
The consortium, however, confirmed its position on September 18 in a written formal response to the BPE Director-General, Alex Okoh.
Copies of the response were sent to both the Vice-President, Yemi Osinbajo, who is the NCP Chairman, and Mr. Fayemi, restating BFIG’s readiness and willingness to commence the initial takeover inspection of ALSCON aborted unilaterally at the last minute by BPE in 2012.
Following the failed deal, PREMIUM TIMES learnt the NCP meeting of September 26 was to consider options for resolving the crisis, including the decision to resend to BFIG the controversial 16-page SPA that was rejected in 2013.
When contacted on Tuesday, BFIG President, Rueben Jaja, confirmed receiving from BPE a SPA the company intended to execute before the close of work.
“We received a SPA from BPE. But, we intend to execute it strictly in line with the order of the Supreme Court on July 6, 2012. The order of the Supreme Court was very clear and unambiguous. We intend to abide by it to the letter in accordance with the rule of law,” Mr. Jaja said.
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