The controversy over the sale of the Aluminium Smelter Company of Nigeria (ALSCON) in Ikot Abasi, Akwa Ibom State, came to an end yesterday with the Federal High Court sitting in Abuja ruling that the Bureau of Public Enterprises (BPE) should accept $41 million, being 10 percent of the purchase price from the BFIG.
Justice Abdul Kafarati, in his ruling, granted an order of perpetual injunction against the BPE from inviting further bids or negotiating with any other party, except the BFIG, the investor that won the 2004 financial bid.
The ruling, which brought to a close a litigation that has dragged since 2006, also granted BFIG’s application to fully enforce the Supreme Court judgment of July 2012 which gave it the right to ownership of ALSCON.
“I hereby grant the application of BFIG to fully enforce the Supreme Court judgment of July 6, 2012 to the purchase price of $410 million,” Justice Kafarati said.
“I also rule that BPE should accept 10 percent of the purchase price to be paid in 15 days from today, or latest 30 October 2014 and the remaining 90 percent to be paid in 90 calendar days, in line with the current audited account of ALSCON,” he added.
He also ruled that BFIG be granted unrestricted access to ALSCON, just as he ordered the inspector-general of police and other security agencies to ensure that this order was fully enforced.
The Federal High Court ruling is predicated on the Supreme Court ruling of July 6, 2012 which declared BFIG as the original buyer of ALSCON and hence compelled the BPE to discuss with the Group. The ruling also compelled both BPE and BFIG to have a mutual agreement on the sale of the plant.
Reuben Jaja, chairman, BFIG, lauded the judicial system, noting that the verdict had further reinforced his faith in the judiciary as the last hope of the common man.
He said the next move after the judgment was to “contact BPE and arrange for a respectful, friendly and cooperative dialogue as to the process of taking over”, adding that BFIG was ready to work with BPE to seek headway to revive ALSCON.
“We know that BPE has done its best by working with the then guidelines and rules and we are bound to respect it and work with them for us to put our hands together to revive ALSCON to make it what this country intended it to be. It is a plant that is cited in the Niger-Delta region to give the people hope and empower them and improve the economy of the region as well as the entire nation,” said Jaja.
“We hope this [judgement] will be the finality to the whole struggle so that we and BPE can put our hands together to rehabilitate and commission the plant to move forward,” he said, while also expressing BFIG’s readiness to pay the 10 percent and do everything possible to meet that commitment.
Taiwo Osipitan, counsel to BPE, was absent in court and his representative declined comments on the judgment.
Although negotiations commenced in 2012 based on the Supreme Court ruling, they have, however, been locked in disagreement over the Share Purchase Agreement (SPA) that was mutually agreed by both BPE and BFIG in October 2012 and the final document sent to the group on January 29 last year for execution and payment.
An SPA is a document that certifies a transaction between the BPE and buyer of a sold enterprise.
BPE had on October 8, three months after the ruling in 2012, sent an SPA to BFIG for modification. The group returned the SPA on October 23 with acceptance of the purchase price prescribed by the BPE.
The October SPA was 70 pages and included ALSCON’s 2011 valuation prepared by KPMG. The audit firm in its valuation put the plant’s worth at N14.57 billion or $91 million.
BPE indicated in section 2.5 of the agreement that the initial purchase price for ALSCON was $250 million, the same price given to Dayson Holdings ltd (Rusal of Russia) in 2006 for which only $130 million was claimed to have been collected.
However, BPE in a 16-page SPA sent to the group in January last year made a turnaround and demanded a payment of $410 million for 77.5 percent of the enterprise.
Benjamin Dikki, acting director-general, BPE, who declined then to give details, confirmed the transmission of the SPA to the group.
“We have transmitted the SPA and BFIG acknowledged receipt,” he had said.
Further findings show that the January 2013 SPA did not take into cognisance the 2011 valuation of ALSCON by KPMG ($91 million) which was far below the $1.03 billion 2004 valuation for which the bureau requested $250 million payment.
Frank Scherer, executive president, public relations, BFIG, confirmed the SPA but noted that it fell short of expectation.
“We have received the supposed BPE’s SPA and found it violently in defiance to the Supreme Court order and decree of July 6, 2012 that asked the two parties to enter into a mutually agreed SPA to enable BFIG pay the agreed amount,” Scherer said.
“The BPE’s initial SPA that we have been negotiating since October 2012 was suddenly abandoned and replaced with a unilateral new SPA given to us for the first time at about 6pm on 29 January, 2013 with a bullied order to remit payment in 15 days of execution,” he added.
He said what troubled them the most was that the abandoned SPA was the same that BPE executed with RUSAL/Dayson, adding that the new SPA the BPE claimed was negotiated on May 20, 2004, about one month before BFIG was declared winner on June 14, 2004, was a lie and their counsel had responded accordingly.
Besides, several issues bordering on impropriety as shown in the BPE’s covering letter were said to have stalled the negotiation.
Findings show that ALSCON’s share certificate is still with Rusal/Dayson Holdings and it is the basis for its arbitration proceedings in the United Kingdom. Rusal/Dayson Holdings is equally seeking $502 million as damages from the BPE. The board of directors has not changed, which connotes that Rusal/Dayson Holdings is still in control of ALSCON.
BPE, findings also show, has nothing to offer presently because it has not taken physical possession of the plant. In addition, the Corporate Affairs Commission (CAC) has not been notified to effect change in the ownership structure in line with the stipulations of Companies and Allied Matters Act (CAMA).
BADEJO ADEMUYIWA & KEHINDE ABDULSALAM
