ALSCON: Nigerian Minister Fayemi ‘ignores’ Supreme Court rulings on multi-billion Naira firm

Kayode Fayemi, Minister of Mining and Steel Development
Kayode Fayemi, Minister of Mining and Steel Development [Photo credit: Premium Times]
This
week’s pledge by the Minister of Mines & Steel Development, Kayode
Fayemi, to work with a Russian firm to reactivate the Aluminium Smelting
Company of Nigeria, ALSCON, in Ikot-Abasi, is in clear violation of a
Supreme Court judgement, PREMIUM TIIMES can report.
The Supreme
Court, Nigeria’s apex court, had on two separate occasions ordered that
the company be taken away from the Russian firm, UC RUSAL.
On
Wednesday, Mr. Fayemi’s aides distributed a statement indicating the
minister’s visit to ALSCON and his pledge to work with UC RUSAL.
The
Chairman/Chief Executive of BFIGroup, Reuben Jaja, who was reacting to
Mr. Fayemi’s visit to the plant, said the minister’s action was not only
illegal, but contemptuous of the Supreme Court, which has ruled twice,
sacking the Russians from the company since 2012.
BFIG is the
Nigerian-American consortium that was declared winner of the bid for
ALSCON in 2004 by the National Council on Privatisation, NCP, but was
later disqualified by the Bureau for Public Enterprises, BPE, in
controversial circumstances, triggering a lingering ownership legal
tussle.ab:c
After a tour of the plant and its adjoining harbour,
Mr. Fayemi commended UC RUSAL, led by its managing director, Dimitriy
Zaviyalov, for ensuring the “machines were kept in good shape, despite
the absence of production activities, occasioned by a legal tussle over
ownership.”
Although the minister said government could not do
anything about the legal tussle, he assured the Russians that government
would “encourage the Supreme Court to expedite action on the ruling,
which would free the complex of any encumbrances,” an indication Mr.
Fayemi is either ignorant of the Supreme Court rulings or has decided to
ignore them.
ALSCON Plant
The
minister cleared the Russians of accusations of asset stripping, saying
“contrary to reports that UC RUSAL was involved in asset stripping at
ALSCON, the fact on ground showed the Russian group maintained the
plants as well as a small work force, since it stopped work.”ab:c
“Government
is fully prepared to tackle other administrative issues that crippled
production processes at the plant once the legal aspect had been
resolved.
“Specifically, the ministry is ready to assist the
company in resolving all administrative issues with some organisations,
including the Nigeria Export Processing Authority, NEPZA, the Nigerian
Gas Company and the Bureau of Public Enterprise, BPE, in the bid to
ensure the plant comes alive again.”
Although his action appears a
clear violation of the Nigerian law, the minster restated the Buhari
administration’s commitment to the rule of law.
“This is a
government that believes in the rule of law. So, we cannot influence the
judiciary over the matter. But we will help to resolve all other
administrative issues that may arise between the company and other
organisations in the interest of our economy,” he said.
“It is in
our interest for the issues to be resolved. I am sure the Vice
President, who is also the Chair of the Privatisation Council of
Nigeria, would invite all the parties concerned once I brief him on my
findings.
“We cannot have such a huge national asset like ALSCON
and allow it to go into ruins. If privatisation must work, there must be
sanctity of contractual agreement,” Mr. Fayemi said.
But in his reaction, Mr. Jaja faulted Mr. Fayemi’s stance on the ownership of ALSCON.
“The
minister is being misguided to think the case against ownership of
ALSCON is still at the Supreme Court,” Mr. Jaja said. “The minister
should know the Supreme Court had ruled on the matter on two occasions,
and the verdicts were very clear and unambiguous.
The businessman made reference to two Supreme Court judgements PREMIUM TIMES had reported about.
“On July
6, 2012, the Supreme Court in a unanimous verdict of 5 to 0, upheld
BFIGroup’s legal right to acquire ALSCON and ordered BPE to comply.
Again, on July 11, 2016, the Supreme Court rejected any arguments by BPE
(Bureau for Public Enterprises) and UC RUSAL to vacate the judgment of
2012.
Supreme Court of Nigeria
“So,
for the minister to call for the Supreme Court to expedite action in
the case now shows he is not up to date with the current information on
ALSCON. If the minister believes in the rule of law, he should know that
romancing with UC RUSAL on a matter the Supreme Court has already ruled
twice is illegal and contemptuous. This a matter BFIG lawyers intend to
take up with the minister,” Mr. Jaja said.
On the continued
closure of the plant, Mr. Jaja said in line with Supreme Court ruling,
the BPE was supposed to provide the share purchase agreement for
BFIGroup to execute, pointing out that the privatization agency was yet
to come forward with the already developed agreement, for signature.
On
the minister’s comment that the plant’s assets were not stripped, Mr.
Jaja said that against the value of ALSCON in 2004, put at about $1.3
billion by the accounting firm, KPMG, its value had dropped
significantly to less than $120 million.
“What would be the
minister’s explanation to this significant decline, if not the massive
degradation of the plant by the company illegally entrusted with its
management,” he said.
PREMIUM TIMES tried to reach Mr. Fayemi on
why he appears to be ignoring the Supreme Court rulings on the matter.
The minister did not pick or return calls, nor respond to a text
message.  His spokesperson, Yinka Oyebode, however, said his boss would
await a letter by BFIG before making a statement.ab:c

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