Reps grill AMCON, BPE for selling $700m asset $30m

The House of Representatives Committee on Public Assets has begun investigation into the sales and collapse of the Delta Steel Company (DSC), Aladja, Warri in Delta State. The committee headed by Hon. Ademorin Kuye grilled the management team of Bureau of Public Enterprises (BPE), Asset Management Corporation of Nigeria (AMCON), Office of the Accountant General […]

The House of Representatives Committee on Public Assets has begun investigation into the sales and collapse of the Delta Steel Company (DSC), Aladja, Warri in Delta State.

The committee headed by Hon. Ademorin Kuye grilled the management team of Bureau of Public Enterprises (BPE), Asset Management Corporation of Nigeria (AMCON), Office of the Accountant General of the Federation (AGF) Ministry of Finance Incorporated (MoFI) among others over the sales and collapse of Delta Steel Company.

The committee is particularly probing into how the steel company which was worth over $700 million was sold below $30 million following a petition received by the House on the matter.

Kuye said the committee whose mandate includes oversight over the use, management and disposal of all federal government assets within and outside the country decided to probe the purported sales of the Delta Steel Company and the controversies surrounding its acquisition by AMCON.

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Briefing the committee, the Director General of Bureau of Public Enterprises, Mr. Ayodeji Ariyo Gbeleyi, said following the privatisation policy of the Federal Government, 80% shareholdings of Delta Steel Company was sold to Global Infrastructure Nigeria Ltd (GINL) in 2005 while Federal Government (BPE) retained 20% of the shareholdings.

According to Gbeleyi, the DSC was worth $700 million, but 80% of the asset was sold to GINL at $30 million

He said residential buildings and plots of land belonging to the Delta Steel Company were used to settle the workers and pensioners of the company.

Gbeleyi said the company, GINL, after privatisation used the assets of DSC as collateral to obtain a loan from Ecobank. However, he said due to non-performance of the loan, in 2015, AMCON acquired the assets and sold them to Premium Steel and Mines Ltd.

He said AMCON did not seek clarification from BPE regarding contractual agreement before it acquired the asset and sold it to another company.

The petitioners, including Association of Concerned Residents of Camp 2, 4 and 5 of Delta Steel Company, Aladja Warri, told the committee that prior to 2015 before the involvement of AMCON and Premium Steel and Mines in DSC assets, they had been staying in the estate and plots of land which were used to settle them based on the contractual agreement.

However, since 2015 till date, the petitioners claimed that they had been under constant intimidation and harassment by police and army personnel claiming to be acting on the instructions from AMCON and Premium Steel and Mines that they should quit the estates.

Speaking on behalf of the petitioners, Dr. David Emomotimi and Richardson Osifor, said the assets AMCON acquired were those used as collateral by Global Infrastructure Nigeria Ltd to obtain loans from Ecobank which did not in any way include the residential buildings.

Osifor said from the contract agreement and information at the Corporate Affairs Commission, the loan Global Infrastructure Nigeria Ltd obtained from Ecobank was N250 million but AMCOM jacked it up to N7 billion.

Similarly, the Director of BPE, Gbeleyi added that they were only aware of the loan Global Infrastructure Nigeria Ltd took from Ecobank but unaware of 3 other banks AMCON listed as the creditors.

In their submission, the representatives of AMCON, noted that AMCON acquired the assets of DSC used as collateral to obtain loan from four banks to prevent them from collapse.

Chukwuemeka Umunakwu (AMCON legal unit) said AMCON acquired the assets at N22 billion but sold it to Premium Steel and Mines at N32 billion.

In response to enquiry by the committee whether the office of the Accountant General of the Federation has the receipt of payments by both BPE and AMCON in respect of sales of Delta Steel Company’s assets, the representative of AGF, Kabiru Ademola (Director, Finance) acknowledged receipt of N3 billion in favour of BPE in respect of sales of 80% of DSC assets to Global Infrastructure Nigeria Ltd.

He said the AGF was yet to get any response from the Central Bank regarding claim of payment of N32 billion by AMCON in respect of DSC assets to Premium Steel and Mines Ltd. Though AMCON claimed the money was paid to FG account, (TSA), the agency was unable to provide the proof of payment to the committee.

The Managing Director/CEO of the Ministry of Finance Incorporated (MOFI), Dr. Armstrong Takang in his submission said though MOFI is responsible for overseeing the management of assets and investments in the country, the agency withdrew from the issue of Delta Steel Company due to so many controversies.

Takang expressed concern over the collapse and death of Delta Steel Company and similar entities in the country.

He said “If our forefathers who were less exposed and less educated would build such infrastructure and maintaining it by our contemporary leaders who are more exposed and educated than them will be a problem, I wonder what will be the future of the country.”

The committee directed AMCON and Premium Steel and Mines to desist from harassing the residents of the estate in Delta Steel Company until the investigation is completed.