Daily Independent Online.
*
Monday,July 19, 2004.
BFI Group alleges BPE
conspiracy over failed ALSCON bid
By Sanya Adejokun
Senior
Correspondent, Abuja
Facts are beginning to
emerge as to the intrigues which characterised the troubled privatisation of
the Aluminium Smelter Company of Nigeria (ALSCON) that saw the nullification of
BFIGroup Corporation’s $405 million
(N56.7 billion) bid.
Combined effort by the
Bureau of Public Enterprises (BPE) and a powerful security officer in the
Presidency is allegedly responsible for the “systematic
frustration” which ensured that the American group failed to sign the
share sale agreement (SSA) and the share purchase agreement (SPA) before the
deadline expired on July 8.
This is contrary to
earlier claims by the BPE that after initial postponement of talks on the deal,
at the instance of BFIGroup, “negotiations were subsequently held between
officials of the BPE and BFIGroup where a final agreement was reached but
BFIGroup was not available to sign the SPA”.
But BPE Director
General Julius Bala has dismissed the claims, describing BFIGroup as bad losers trying to create
confusion.
According to a
BFIGroup source, there was delay in signing the SPA because the BPE inserted
some clauses which ensured that all those who had promised them financial
backing were scared away.
Said he: “If you
look at the share purchase agreement, section 9 (6) states that we the
purchaser would not have the right to borrow, pledge or finance anything on the
property for six months after we bought it. So our investors now said if we pay
you off in 90 days, why do you have control over our property for six
months”.
A perusal of the SPA
showed that sections 9.6 to 9.8 are strange clauses that had not featured in
privatisation transactions since the exercise began in the country.
Aside from that, the
SPA stipulated that “BFIGroup shall not undertake bank borrowing against
the asset of ALSCON, trade credit and similar facilities required by the
company; change auditors of the company; alter adversely the terms of
employment of any employee of the company; and that the purchaser should make
provision for any liability that may arise in respect of employees pension and
gratuities from the company in the sum required to the purchaser’s
holding on the company”.
The official said
after seeing the agreement, “our financiers said the only way they could
be sure of the genuineness of the transaction, given the reputation of Nigeria,
is to put the $41 million deposit in an escrow account and that the government
should also put the title deeds of the company in an escrow account so that
after final payment in 90 days, each would collect what belongs to it. But the
BPE prevaricated”.
With the way the
transaction was heading, the official alleged that his group wrote a letter to
President Olusegun Obasanjo on June 28 through the BPE, asking for an extension
to the deadline, but this was denied.
Two other requests for
extension were written with the one on July 6 signed “by our legal
counsel Mr. Thomas Graham asking that the letter be given to the President,
which the BPE boss did not disclose to the President”.
He alleged that Bala
had from the beginning warned him to steer clear of the transaction as a
powerful security officer in Aso Rock was the backer of rival bidder Rusal
Aluminium of Russia (RUSAL).
However, in an
interview on Sunday, Bala dismissed the allegations, describing BFIGroup as bad
losers.
According to him,
there have been recent media due diligence reports on the BFIGroup proclaiming
“only one person as BFIGroup and having only $1,500 in his account in the
United States”.
He said it took the
group more than three months to produce the $1 million bid bond and that
“they are only creating unnecessary controversy”.
