Socio-Economic Rights and Accountability Project, (SERAP) has sent an open
\nletter to President Muhammadu Buhari requesting him to use his \u201cgood
\noffices and leadership position to revisit and refer the allegations of
\ncorruption and abuse of process in the privatisation of public enterprises
\nin Nigeria between 1999\u20142011 to the Economic and Financial Crimes
\nCommission (EFCC) and the Independent Corrupt Practices and Other Related
\nOffences Commission (ICPC) for further investigation, and if there is
\nrelevant and sufficient admissible evidence, for anyone suspected to be
\ninvolved to face prosecution.\u201d<\/p>\n
The organization urged Buhari to \u201creform the Bureau of Public Enterprise
\n(BPE) to remove opportunities for corruption in privatisation process, and
\nto instruct the EFCC and ICPC to ensure the recovery of proceeds of
\ncorruption. We request that you take the steps within 14 days of the
\nreceipt and\/or publication of this letter, failing which SERAP will
\ninstitute legal proceedings to compel your government to act in the public
\ninterest.\u201d<\/p>\n
In the letter dated 1 December 2017 and signed by SERAP executive director
\nAdetokunbo Mumuni the organization said: \u201cSERAP has obtained and carefully
\nread the full report of the Senate Ad-Hoc Committee on Investigation of
\nthe Privatisation and Commercialisation Activities of the Bureau of Public
\nEnterprise (BPE) from 1999 to 2011, which contains damaging allegations of
\ncorruption, presidential interference, and abuse of due process in the
\nselection of core investor, valuation of public enterprises, pricing of
\nshares\/assets, determination of workers terminal benefits, and use of
\nproceeds of privatisation.\u201d<\/p>\n
According to the organization, \u201cMany cases of presidential
\ndirectives\/interference during the period under review (1999-2011)
\naffected the process of core investor selection. The BPE was negligent and
\nineffective in monitoring of privatised companies. In some cases, BPE
\nnever monitored the companies for the entire lock-in period and in other
\ncases their reports were complete opposite of what was on the ground.\u201d<\/p>\n
The letter copied to Vice President Yemi Osinbajo, who is also the chair
\nof the National Council on Privatization (NCP), read in part: \u201cIt is in
\nthe public interest that any sales of public assets will get the best
\nvalue but the Senate report shows exactly the opposite. By revisiting the
\nprivatisation process and referring the allegations of corruption
\ndocumented in the report to the EFCC and ICPC, your government would be
\ndemonstrating that it\u2019s willing and able to fight impunity of perpetrators
\nof corruption, which is responsible for legacy of grand corruption and
\nabuse of office in the country.\u201d<\/p>\n
\u201cSpecifically, the committee among others found that: A total sum of
\nN301bn was realised as proceeds of privatisation from 1999 to 2011. N900m
\nof that was used as loan to Nigeria Re-insurance Plc for recapitalization,
\nin violation of section 19(2) of the Public Enterprises (Privatisation and
\nCommercialisation) Act 1999. Folio Communications Limited pledged the
\nassets of Daily Times Nigeria Plc to obtain loan from bank(s) and utilized
\nthe loan to pay for the share of the company.\u201d<\/p>\n
\u201cCore investor converted the premises of Volkswagen Nigeria Limited into
\nbonded warehouses for storage of contrabands mainly rice, vegetable oils,
\nfertilizer, but was not reported by the BPE. Former Director-General of
\nBPE, Mrs Irene Nkechi Chigbue sought and received direct approvals of
\nformer President Olusegun Obasanjo for many privatisation transactions, in
\nviolation of Section 11 of the Public Enterprise Act and the Bureau
\nProcedure Manual.\u201d<\/p>\n
\u201cAluminium Smelter Compny of Nigeria (ALSCON)\u2014BFIG Corporation of the USA
\nwas declared preferred bidder and winner with a bid of $410 million after
\ngoing through the bidding process but was denied its legal right to
\nnegotiate terms, sign Share Purchase Agreement and pay 10% initial
\npayment. However, BPE approved a Willing Seller Willing Buyer to
\nRusal\/Dayson for $250m and cancelled BFIG Corporation $410m offer.
\nAluminium Smelter Company of Nigeria was grossly undervalued, having being
\nbuilt for $3.2bn and was privatized by BPE for $130m excluding $120m Imo
\nRiver Channel Dredging cost from the purchase consideration.\u201d<\/p>\n
\u201cMichelle Nigeria Limited emerged as the preferred bidder of the Apapa
\nPort Complex Terminal \u201cC\u201d but it was given to ENL Consortium Limited which
\nalready had one, in breach of Ground Rule 7, which states: \u201cNo single
\nbidder\/concessionaire would be allowed to have more than one concession in
\nApapa Port Complex.\u201d BPE reversed the process instead and gave Terminal
\n\u201cC\u201d to ENL Consortium Ltd without cancelling the Michelle Nigeria Limited
\noffer, in breach of the core investor selection process.\u201d<\/p>\n
\u201cFormer Director General of BPE Ms Bolanle Onagoruwa abused the approval
\nprocess in the sale of 5% Federal Government\u2019s residual shares in EPCL to
\nIndorama Group, in contravention of the First Schedule of the Public
\nEnterprises (Privatisation and Commercialisation) Act 1999. Indorama Group
\nhas already acquired the maximum 75% shares reserved for core investor in
\nEPCL as provided in the First Schedule Section 1(1) no. 6 of the Act.\u201d<\/p>\n
\u201cThe share purchase agreement created an escrow account into which all the
\nmonies shall be paid. However, the escrow account was not opened. The
\nenterprise was handed over to the purchaser without payment of the
\npurchase consideration. Former president Olusegun Obasanjo approved the
\naddendum, in violation of the Privatisation Act and the share purchase
\nagreement.\u201d
\n\u201cAll former Directors-General of BPE (Mallam Nasir el-Rufai-1999-2003; Dr
\nJulius Baba-2003-2004; Mrs Irene Chigbue-2004-2009; Dr Chris
\nAnyanwu-2009-2010; and Ms Bolanle Onagoruwa-2010-2012) established several
\naccounts with various commercial banks, in violation of Section 19(1) of
\nthe Public Enterprises (Privatisation and Commercialisation) Act 1999.\u201d<\/p>\n
\u201cAll former Directors-General used privatisation proceeds to pay
\ntransaction expenses, consultancy fees and staff terminal benefits without
\nappropriation by the National Assembly, in violation of Section 19(2) of
\nthe Public Enterprises Act. Former Director-General of BPE Mrs Irene
\nChigbue used privatisation proceeds to execute capital projects (Office
\nextension) in 2007 in violation of this provision.\u201d<\/p>\n
\u201cThe process of privatisation of public enterprises was totally set aside
\nin the concession to Global Infrastructure Holdings Limited and Global
\nInfrastructure Nigeria Limited by the then Federal Ministry of Power and
\nSteel Development in breach of Section 11(c) of thee Public Enterprises
\nAct. BPE later converted the Concession Agreement to a core investor
\nagreement, in breach of the transaction process.\u201d<\/p>\n
\u201cThe N1.9bn Privatisation Proceeds loaned for recapitalisation of Nigeria
\nRe-insurance Plc and Nicon Insurance Plc was not used for that purpose and
\nthe BPE is yet to recover the money. Contract for dredging Imo River
\nChannel was overvalued at $120m by BPE. This would cost less than $100
\ntoday (2011). 43 enterprises of 122 privatised companies are not
\nperforming.\u201d<\/p>\n
\u201cThe core investor of Transcorp Hilton Hotel agreed among others to within
\n3 years construct a shopping mall within the Hotel grounds; and construct
\nshort\/long stay serviced apartments on the available land within the hotel
\npremises. However, to date the core investor has failed to deliver in
\nbreach of clause 8.4 of the share purchase agreement and BPE also failed
\nto apply sanctions as provided in clause 10.\u201d<\/p>\n
\u201cThe core investor of Abuja International Hotels Limited (Nicon Luxury
\nHotel) agreed to invest at least additional N2bn to complete the
\nfurnishing of the hotel and provision of ancillary services to a 5-year
\ndeluxe status within 9 months. However, the core investor has failed to
\ncomply, in violation of clause 7.3 of the share purchase agreement and BPE
\nhas failed to apply sanctions as provided in clause 9. Also, the core
\ninvestor of Sheraton Hotel and Towers, Abuja has failed to comply with the
\nshare purchase agreement, in violation of clause 8.6 and the BPE has
\nfailed to apply sanctions as provided in clause 9.\u201d<\/p>\n
\u201cThe core investor in Nigerian Cement Company Plc (Nigercem) has woefully
\nfailed to fulfil its technical and financial obligations several years
\nafter privatisation. The core investor in Delta Steel Company agreed to
\ninvest $100.65m within 15 months but no evidence of such investment. The
\nDelta Steel Township 1 Housing Estate is comprised of 4,500 housing units;
\n1,109 unauthorised plots were illegally sold\/allocated by the BPE.\u201d<\/p>\n
\u201cDr Julius Bala should be investigated by anti-graft agencies for giving
\napproval to Folio Communication Limited for the illegal sale of assets of
\nDaily Times Nigeria Plc. Ms Bolanle Onagoruwa showed gross incompetence in
\nthe management of the BPE and she illegally and fraudulently sold 5%
\nFederal Government residual shares in Eleme Petrochemicals Company Limited
\n(EPCL).\u201d<\/p>\n
\u201cPoor privatisation monitoring, skewed share purchase agreements in favour
\nof investors in many instances and abuse of process in utilizing
\nprivatisation proceeds further marred the privatisation programme. Some of
\nthe share purchase agreements were skewed in favour of private investors
\nagainst public interests. In the Nicon Insurance Plc share purchase
\nagreement, the BPE deliberately removed the protective clause on sales of
\nassets without BPE\u2019s written consent within the first 5 years.\u201d<\/p>\n
\u201cBid bonds are usually refunded to bidders after closure of bidding. In
\nthe case of crystallized bid bonds transaction expenses are deducted
\nbefore refunds. BPE abused this process in the sense that National Council
\non Privatization (NCP) approvals for funds are kept for years without
\npayment.\u201d<\/p>\n
\u201cTerminal benefits of workers of companies slated for privatisation are
\nusually computed by management or by an appointed BPE Actuarial Consultant
\nbefore payment. The processes are often abused by BPE. In NITEL, workers
\nwere forced to accept less than 5 years pension buy-out where it was
\nagreed earlier for 5 years. BPE owed workers in Delta Steel Company
\n(N5.2bn); and ALSCON (N2.7bn). In Federal Superphosphate Fertilizer
\nCompany the Actuarist computed and recommended full payment of N457m but
\nBPE paid only N383m leaving a difference of N73m.\u201d<\/p>\n
\u201cWorkers of National Steel Raw Materials Exploration Agency, Kaduna are
\nowed gratuities of N150m by Nicon Insurance Plc. Workers often benefit
\nfrom allotments of shares in companies undergoing privatisation on
\nrequest. The reserve shares are however not granted on free carriage in
\ncompliance with provisions of the First Schedule Section 1(1) in line with
\nNigeria Individuals Participation as Percentage Post Privatisation. Out of
\nthe 122 privatised public enterprises only 14 enterprises had shares
\nreserved for workers. 11,000 jobs were lost in Nitel\/M-Tel; 2000 jobs were
\nin Daily Times; and 1000 jobs were lost in ALSCON.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Socio-Economic Rights and Accountability Project, (SERAP) has sent an open letter to President Muhammadu Buhari requesting him to use his \u201cgood offices and leadership position to revisit and refer the…<\/p>\n","protected":false},"author":1,"featured_media":49993,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-60367","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\n