Nigerian-American consortium, BFIG, wins 8-year legal battle to recover ALSCON from Russian firm, UC Rusal

The Supreme Court on Friday ruled that BFIGroup, the Nigerian-American consortium that emerged the preferred bidder for the Aluminium Smelter Company of Nigeria (ALSCON, Ikot Abasi, Akwa Ibom State, in 2004, but was disqualified in controversial circumstances by the Bureau of Public Enterprises (BPE), was the valid winner of the bid.

BFIGroup, which was pre-qualified as one of the two core investors interested in acquiring the 77.5 per cent Federal Government equity in the $3.2billion plant, was declared winner of the bid for the plant by the National Council on Privatisation (NCP) after its $410million offer proved superior to the $160million by its, UC Rusal.

Conditions prior to the Bid

Prior to the June 14, 2004 scheduled financial bid opening exercise, BFIGroup was prequalified to stand for the bid having completed due diligence on the plant as well as other necessary processes stipulated by the NCP, including conditions spelt out in a resolution during the May 20, 2004 Technical Bid Conference by all participants in the bid process.

Some of the conditions included the payment of $1million cash bid bond, submission of a list of preferred banks in Nigeria and overseas where the bond could be procured, and a court of notarization of the bid bond. 

Other conditions included written guarantee of the commitment by all bidders to abide by the stipulated guidelines covering presentation of the Year 2003 audited financial accounts of ALSCON by May 24, 2004;  plan to dredge the Imo River Channel, the gas purchase/supply agreement, the export processing factory status, and the bid price payment schedule.

Despite satisfying all the conditions and getting clearance to participate in the bid exercise, which it later won, BFIGroup was curiously disqualified by the BPE on July 9, 2004 through a letter signed by the then Director General, Julius Bala, on allegation that the consortium failed to meet the deadline stipulated for the payment of the mandatory 10 per cent of the total bid offer.

Conspiracy from the top

In line with the terms of agreements reached at the Technical Bids Conference, the winner of the bid was expected to pay 10 per cent of the bid price within 15 working days of signing the share purchase agreement (SPA), while the outstanding 90 per cent would be paid within 90 calendar days.   

However, in the letter issued by BPE on June 17, 2004, proclaiming the preferred bidder curiously gave BFIGroup only 15 days within which to pay the 10 per cent of $410million or risk disqualification.

Rather than listen to several pleas by BFIGroup for a reversal, the BPE stuck to its decision, with the then Minister of Power & Steel, Liyel Imoke, declaring that the decision was irrevocable. 

Former President Olusegun Obasanjo, was to affirm the decision when he said in an answer to a reporter’s question during his state visit to Akwa Ibom on August 7, 2004 that the Federal Government had indeed commenced negotiations with UC Rusal to take over the plant despite its defeat by BFIGroup. 

“We have opened negotiations with the Russians. If that negotiation goes on very well, I want to assure that before the end of this month the issue of ALSCON would be put behind us,” President Obasanjo had said then, adding “if they (NCP, BPE) were doing it correctly, they should not have disqualified them (UC Rusal) for asking for certain conditions others considered unimportant.

“If our screening had been right, that group (BFIGroup) should have been disqualified, because that group has no technical or track record of performance in this area (aluminium industry).”

BFIGroup goes to court

Dangote adbanner 728x90_2 (1)

Frustrated, BFIGroup, in September 2004, dragged the BPE before an Abuja High Court for overturning its victory and handing over ALSCON to UC Rusal, which was earlier disqualified by the NCP for submitting a conditional bid in violation of the privatization rules and guidelines.

In the suit No. FHC/ABJ/SC/406/04, filed on its behalf by Adeniyi Akintola (SAN) and Company, the BFIGroup asked the court to restrain the BPE from disqualifying it as the preferred bidder and core investor and “inviting any person(s), group or company to make a bid for the purchase of any share or any of the shares being held by the Federal government of Nigeria in the capital of Aluminium Smelter Company of Nigeria (ALSCON)”.

Apart from restrain BPE from giving any effect to its July 9, 2004 letter, BFIG also asked the court to stop it from imposing any term of payment for the purchase of ALSCON outside those terms and conditions of agreement and understanding reached at the May 20, 2004 meeting.

Specifically, the company asked the court to determine, among others, whether or not the confirmation of Understanding/Agreement reached at the Technical Bids Conference of 20th May, 2004 is binding on the parties; whether or not the confirmation of Understanding/Agreement reached at the Technical Bids Conference of 20th May, 2004 is the foundation of the share sale/purchase Agreement between BFIG and BPE.

The company also asked the court to determine whether or not the BPE can unilaterally alter the bid price payment schedule, i.e. the standard of Bid price payment in relation to the payment of the initial 10 per cent of the purchase price as stipulated in paragraph ‘F’ of the confirmation of Understanding/Agreement reached at the Technical Bids Conference of 20th May, 2004.

Battle in U.S. court

In another case filed in the United States, the Californian-based consortium asked for a restraining order against alleged, “dubious arrangement in British Virgin Island – as it pertains to Dayson Holdings Limited, now hidden under a private Trust called Commonwealth Trust Limited to take over ALSCON.

Similarly, in a paid Caveat Emptor published in various national dailies in January 2005 on its behalf by its legal counsel, Adeniyi Akintola, (SAN), the BFIGroup warned the general public and the international business community “to steer clear of the sale of ALSCON by BPE”, threatening to “join in the pending litigations any person or persons, groups or company of any nationality who show the slightest interest in the sale of ALSCON” pending the disposal of the cases.

Winning in several fronts

Several months later, the ruling of the court in favour of BFIGroup did not go down well with the BPE, which filed an appeal, with an amended statement of claim to justify its decision, saying the company was disqualified on ground that it did not have a valid contract to pursue in the case.

After being defeated at the Appeal Court, BPE proceeded to the Supreme Court. But, he Supreme Court in its ruling on Friday declared BFIGroup Corporation, as the rightful winner of the bid ALSCON.

The apex court, in a unanimous judgement read by Olusola Fabiyi, said that by virtue of the fact that BFIGroup was cleared to stand for the bid, which it won, having fulfilled all conditions stipulated in the bid guidelines issued by both BPE and the NCP prior to the commencement of the process to privatise the aluminium plant, including the payment of a $1million cash bid bond, it had a subsisting and valid contract that is binding.

It therefore directed that BFIGroup be recognised immediately as the authentic winner of the bid for the plant. 

Judiciary upholds rule of law

BFIGgroup President, Reuben Jaja, described the ruling as a good judgment and hailed the judiciary as the hope of the oppressed man, by returning a fair verdict that is consistent with the rule of law, justice and equity.

Mr Jaja said BFIGroup would be ready to move in to the plant immediate UC Rusal has carried specific directives of the Supreme Court pursuant to the terms of its agreement with BPE.

“In over eight years, fighting with the Federal Government and the corrupt elite and multinationals was not easy,” he said. “The plant has suffered tremendous decay. We have given in everything we have in the fight to recover the plant. We have suffered damages, including partners who have since forgotten about the project as well as others who livelihood have been negatively impacted.

“We are determined to work with our partners to do to ensure that we turn the plant around to the benefit of the people, particularly the people of the Niger Delta for which the plant was built.”   


Coronavirus factsheet


PT Mag Campaign AD

All rights reserved. This material and any other material on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from PREMIUM TIMES.

Support PREMIUM TIMES' journalism of integrity and credibility

Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.


TEXT AD: To advertise here . Call Willie +2347088095401...

BE THE FIRST TO KNOW! Subscribe to our newsletter

* indicates required


Now available on

  Premium Times Android mobile applicationPremium Times iOS mobile applicationPremium Times blackberry mobile applicationPremium Times windows mobile application