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Bureau of Public Enterprises (BPE) and other stakeholders expressed concern over the exclusion from the recent renegotiated concession agreement on Ajaokuta Steel Company Limited (ASCL) and Nigerian Iron Ore Mining Company (NIOMCO).
The agreement was signed by Kayode Fayemi, minister of Solid Minerals on behalf of Federal Government while Global Steel Holdings Limited (GSHL).
According to the ministerial report, seen by BDSUNDAY, the failure of Global Infrastructure Nigeria Limited (GINL) to adhere to the terms of agreement and financial impropriety led to the cancellation of the concession of Ajaokuta Steel Company Limited (AICL) and Nigerian Iron Ore Mining Company (NIOMCO).
According to the document obtained by BDSUNDAY, Federal Government through the National Council on Privatisation (NCP) constituted a Committee to consider the arbitration case between Federal Government and GINL.
“After reviewing of relevant documents, the Committee recommended that the Federal Government should pursue the arbitration to its logical conclusion,” the report read.
Some of the infractions uncovered by the Committee include: “numerous loans taken from Nigerian banks were not utilised for the purposes for which they were taken,” as well as non-remittance of tax and pension deductions to the relevant tax authorities and pension authorities.
The Committee also observed that “the alleged transfer of 60percent shares in ASCL to GINL contravened the provisions of Public Enterprise Privatisation and Commercialisation Act, 1999 and was ultra vires.
“A claim in conversion for about N37 billion being the verifiable assets of ASCL wrongfully transferred cannibalized or vandalised by GINL contrary to clause 10.2 of the SPA.
“Conversion of premium scraps valued at about N203 million imported for ASCL by GINL. Conversion of billets in ASCL warehouse valued at $79,372.50 without payment.
“A claim in conversion for about N6.4 billion being the verifiable assets of NIOMCO wrongfully transferred, cannibalised or vandalised by GINL. Conversion of iron ore from NIOMCO valued at $1,078,544.50 was not paid for. Sale of 303,511 tons of iron ore concentrates was massively undervalued resulting in a loss of about $14 million. Non-payment of concession fees as per concession agreement on both companies,” and many others led to the planned prosecution of Messrs GINL.
The report however, noted that “Ministry of Justice secured Mr. President’s approval for an out-of-court settlement. This decision was taken to speed-up the conclusion of the protracted arbitration proceedings on ASCL and NIOMCO.”
Speaking at the investigative public hearing, Vincent Akpotaire, acting BPE director-general dismissed involvement in the processes that led to the modified concession of NIOMCO.
Akpotarie, who spoke before the House sub-committee on Steel, chaired by Babatunde Kolawole (APC-Ondo) on the signed modified agreement with GSHL and NIOMCO, explained that “the concession of NIOMCO was done by the ministry and not by BPE; so BPE doesn’t have the details.”
Akpotaire, who was represented by Dikko Abdullahi, added that the Bureau has not received any directives and instruction from NCP on the concession arrangement.
On his part, Sanusi Muhammed, executive secretary general of the African Iron and Steel Association (AISA), alleged that stakeholders in the sector were not involved in the modified agreement with GSHL insisting that it was illegal.
According to him, the “privatisation of NIOMCO is null and void since BPE, the technical partner of NCP in charge of privatisation did not participate.
“And the minister said it is a modified agreement but nobody is allowed to see it. No stakeholder was invited. So, we are interested in knowing what the agreement looks like.”
In his submission, David Esezobor, Co-chairman, Iron and Steel Development Committee under the Nigerian Society of Engineers (NSE), who queried the handing over of the company to GSHL, disclosed that there were outstanding issues with this modified privatisation which have to be sorted out.
Speaking earlier, Gabriel Kolawole, chairman of the House sub-committee on Steel, disclosed that the committee was in possession of documents that clearly stated why previous administrations declined to enter into any agreement with GSHL again.
“Now NIOMCO is back into the hands of Global Holdings, which had failed us in the past. And it is NIOMCO that supplies Ajaokuta Steel with raw materials,” Kolawole said.
The chairman explained that since the minister of solid minerals, Fayemi was absent at the investigative hearing, the meeting had to be postponed till Thursday next week.
KEHINDE AKINTOLA
