Thursday, August 11, 2011

Sale of govt firms: Probe panel split over Obasanjo

More startling revelations emerged yesterday as the Senate continued its probe of Federal Government companies sold by the Bureau of Public Enterprises (BPE). The investigation, which began on Monday, has exposed many shady deals involving the sales which were allegedly not authorized by the supervisory agency, the National Council on Privatisation (NCP).

The Senator Ahmed Lawan-led Ad-hoc Committee on Privatisation and Commercialisation was yesterday split on whether or not to summon former President Olusegun Obasanjo, whose administration witnessed the sales. Obasanjo ruled the country between 1999 and 2007. However, Senator Lawan insisted that no ex-President will be invited.

The committee agreed to summon former Power and Steel Ministers such as ex-Governor of Ondo State, Dr. Olusegun Agagu, Cross River State Governor, Liyel Imoke and ex-Governor of Gombe State, now Senator Danjuma Goje. The committee was told yesterday how a businessman and Chairman of Global Fleet Limited, Mr. Jimoh Ibrahim, was indicted in an audit report of KPMG. NICON’s preferred bidder, Assurance Acquisition Limited (AAL) accused him of forging the signature of the MD/CEO of N-Glory Development Nigeria Ltd, Dr. Obiora Okonkwo in the acquisition of NICON in 2005. The audit report indicted Ibrahim of stripping NICON of N6.3billion.

But NICON Managing Director, Dr. Emmanuel Jegede, who stood in for Ibrahim at the committee hearing yesterday, said that the company had been turned around with the acquisition of Air Nigeria, which currently has 11 functional aircraft. Committee members were yesterday divided over a proposal to formally invite Obasanjo over some allegations on his alleged involvement in some of the privatized companies.

It was gathered that after some revelations made before the committee about ‘certain directives’ from the President concerning sales of some privatized companies, some committee members canvassed the proposal that the former President should be “given the opportunity to state his own side of the story.” Although some members said that Obasanjo should be given the opportunity to formally respond to some of the allegations, others insisted that his presence was “an unnecessary distraction.”

Senators who wanted the former President to testify before the committee noted that, “the allegations against him since Monday, when this public hearing started are too weighty to be ignored. “This is the right avenue and the right time for the former President to clear the air on some of these privatized companies, particularly those who have come before us to say that they won the bid for some companies but were denied the right to take up their offers.”

But speaking exclusively to Daily Sun during the panel’s lunch break, Sen. Lawan dismissed insinuations that the former President would be summoned to appear before the committee.
“We are not inviting any former President. We are not for any sensationalism here. We won’t work like that,” Lawan said.

He, however, confirmed that former ministers of power and steel have been formally invited to appear before the committee. “We’ve already written to all the former ministers. I believe the secretariat would have sent their letters…”
Meanwhile, the panel was told how Ibrahim allegedly forged Dr. Okonkwo’s signature to acquire NICON just as an audit report of the KMPG indicted him of stripping the company of N6.3 billion.

Ibrahim, a lawyer, was represented by Dr. Jegede, who told the committee that when Global Fleet took over NICON, the company had acquired Air Nigeria and presently has 11 functional planes. Jegede noted that NICON has 1, 500 workforce with 60 branches across the country.
“NICON is the only insurance company where Nigeria has equity, yet, does not patronize the company. PHCN owes us over N2billion while Ajaokuta owes N763million. I took over in December 2005 with staff strength of about 750, which has increased to 1500.”

The debts owed NICON, he said, “resulted in full provision of N13 billion for loss on receivables who are not paying. This is coupled with the avoidable expenditure of N130 million on insurance levy as the incomes were recognized prior to privatization.” Jegede told the panel that some NICON properties which were tagged as assets have been forcefully taken over. He cited the “adjacent plot to the head office owned by NICON valued at N4 billion (which) was taken over to develop the national secretariat of the Peoples Democratic Party (PDP).

The audit report of KPMG Professional Services alleged that Ibrahim stripped NICON of assets worth of N6.37 billion. The report tendered by KPMG before the committee yesterday states that,“ the total assets taken out of the company either directly or through companies of wholly-owned and controlled by Barrister Jimoh Ibrahim and not properly accounted for amounts to N6.3 billion.”

NICON preferred bidder, Assurance Acquisition Limited (AAL) accused Ibrahim of forging the signature with which he bought NICON.

In a petition submitted to the committee by AAL representative, Dickson Osuala, claimed that the preferred bidder for NICON insurance was AAL before Global Feet allegedly took over the company from preferred bidder. Osuala submitted in his petition before the committee that Global Fleet never bidded for NICON but allegedly acquired it through fraud and illegality.
His words: “The paramount and subsistent issue I want to bring to the notice of this committee is that another company bidded for NICON Insurance and by diverse act of illegality, forgery and fraud; it was handed over to another company – Global Fleet”; he alleged.

“You heard BPE say that they handed over the company to the preferred bidder and that they handed it to the AAL. In the paper that we have submitted to the committee, we brought documents to show what happened.“It is AAL, a consortium of about six to seven companies that made a bid and they had technical proposals on what to do with NICON Insurance in order to boost its profitability and make sure that stakeholders benefit from the objective of privatisation.

“Ibrahim came, he did not bid but he was representing the first citizen of Nigeria and he said he should be with them. And we told him we did not know him.“The next thing he did was to bring a letter of Acceptance of Offer and informed them that he was a Director of Oceanic Bank. Oceanic Bank was offering financial advice and we were partnering financially, hoping also to participate in the equity.

“At this point in time, they told him they did not know him and that they know only Oceanic Bank. What happened was that Global Fleet and another consortium of companies that were not assessed, that were not interviewed, processed, that were not tested and hydrated during the time of the consideration of the bid was not given NICON insurance. A consortium of companies that had no plan whatsoever for the insurance company.”

As soon as Osuala finished his submissions, NICON pensioners, represented by Mr. Awa Mmaju, accused Jegede, the NICON MD, of lying before the committee. Mmaju pleaded with the Senate to reverse the sale of NICON and give the company back to Nigerians through government.

“What Jegede has been saying were all lies. When the valuation of the entitlement was made, I told them that what they had done was not correct and I wrote BPE but each time the letter get to them, they will not take any action until recently. The privatisation of NICON is a bigger fraud.
“They are talking of 70 per cent sale and in the document I have here, it is stated that the company is entitled to 61.9 while the government is 39 per cent and they are talking about 17 billion as required by capitalization.

“You will remember sir that the government took over NICON in 2007 when they did that, they appointed the team of foreign auditors – KPMG, which came up with a report that between the time the corporation was taken over by Jimoh Ibrahim and the time government intervened, that they have made a substantial loss of N13billion.

“It was KPMG that recommended the co-investor to put in over N17billion to revive the company and they were directed to pay it into an Excess Crude Account in Central London.
“I want Jegede to confirm that this money was paid into the account. Everything about the sale of NICON was shrouded in doubt and there was no sale of NICON in the first instance.
“I urge that they give back the company to Nigerians. They have reduced the staff strength from 1100 that it was by the time they took over to 200. If you go to NICON plaza, it is in shambles.”

Meanwhile, the Conference of Nigeria Political Parties (CNPP) has expressed dissatisfaction over the revelations so far, saying, “it is now obvious that those who have been at the helm of affairs since 1999 merely appropriated Nigeria and her commonwealth to themselves through various fronts, including foreigners.”

In a statement issued in Abuja yesterday by the Secretary-General, Chief Willy Ezugwu, CNPP described as scandalous and willful, the sale of the nation’s enterprise at ridiculous give-away price when there were higher bidders for such.

“It is scandalous that some of Nigeria’s assets were sold for less than a tenth of what they are actually worth, as was the case of $3.2 billion ALSCON which was sold for $130 million.
“The illegal sale of some of these assets, sold while there was no National Council of Privatization seating, is also a source of concern just like the cases of the Bureau of Public Enterprises (BPE) selling off five per cent of the Federal Government shares in the Eleme Petrochemical Company Limited for a paltry N4.3 billion when it did not have the mandate to do so.

“There is also the mind boggling rot in the Nigerian Telecommunication (NITEL), which ‘interests in high place’ will not even allow Nigerians to understand at this point,” Ezugwu said.
In a related development, BPE Director-General, Ms Bola Onagoruwa, was ordered by the Senate Committee yesterday, to submit total earnings from sales of privatized companies from 1999 to date. Sen. Lawan handed down the directive.


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