Some key aides of ex-President Olusegun Obasanjo and others who benefited from his privatisation programme are set for a showdown with the Federal Government over moves to reverse sales of some companies based on the Senate’s decision.
They are insisting that contrary to the report of the Senate’s Ad Hoc Committee on Privatisation, most of the companies in question are about 67 per cent viable.
The Senate had on Tuesday rolled back Obasanjo’s privatisation exercise by asking the administration of President Goodluck Jonathan to revoke the sale of some companies.
The Senate also asked the government to reprimand former Directors-General of the Bureau of Public Enterprises, including Mallam Nasir el-Rufai, Julius Balat, and Irene Chigbue.
The Senate also recommended the removal of the present DG of the BPE, Mrs. Bolanle Onagoruwa.
But there is a row over the call for the revocation of the sales of companies, such as Transcorp Hilton Hotel, NICON-Luxury Hotel, Volkswagen of Nigeria Limited, Aluminum Smelter Company of Nigeria (ALSCON), Delta Steel Company and Katsina Rolling Mill among others.
The beneficiaries of the privatisation, especially members of Corporate Nigeria, have vowed to resist the moves to revoke the sale of these firms.
A top source, who spoke in confidence, said: “We know why they are doing this, the revocation will not stand and Jonathan should not attempt to do it.
“We have met and we have decided to take our battle to the court against the Senate and the Federal Government. The Senate Ad Hoc Committee hid many facts from the upper chamber and the government. The privatised companies are more than 67 per cent viable.
“Why will anyone want to sell companies that are doing well? The truth is that a new business class is interested in some of these companies for selfish reasons.
“We will meet in court if the government makes any move to reverse the sale of these companies. That is why investors are scared of coming to Nigeria.
“Look at the fact-sheet. Dividend paid by Transcorp Hilton to FGN since 2006 is N4, 144,618.59 while Eleme Petrochemical is N12, 894, 750.
“In 2005, NNPC undertook a “back-to-back” guarantee on gas supply to the core investor in ALSCON, which is Rusal. NNPC first guaranteed Shell, through the Nigeria Gas Company (NGC) that it will be paid if it supplies gas to ALSCON.
“The 2005 agreement was that ALSCON will get gas at 321/2 cents per standard cubic feet (scf) at the time it was going for between 65 cents and a dollar depending on the quantity. Presently, it goes for between $2.7 and $4 dollars in the international market. And the 2005 agreement says the price is fixed at 321/2 cents for 15 years.
“The government continued to supply gas to ALSCON until 2009 when Shell, through NGC, stopped and demanded unpaid subsidy of over N600 million.”
On the plan to remove the DG of the BPE, another source said the woman has no power to take decisions unilaterally as the public is being made to believe.
The source added: “The BPE did not illegally sell the Federal Government’s five per cent shares in Eleme Petrochemical Company Limited (EPCL), Port Harcourt, to Indorama for N4.375 billion.
“The claim in its entirety is false, uninformed, mischievous and grossly misleading.
“It must be noted that as the Secretariat of the National Council on Privatisation (NCP), the BPE could not embark on the sale of any public enterprise without the approval of the National Council on Privatisation (NCP) and the EPCL transaction cannot be different.”
“It may be recalled that EPCL was about to embark on a multi-billion dollar expansion programme, and that the inherent threat of FGN’s five per cent shareholding being diluted as a result of recapitalisation, necessitated the decision by the Technical Committee of the National Council on Privatisation to negotiate the price for the sale of the shares, on the understanding that the approval of the National Council on Privatisation would be obtained before closure of the transaction.
“A further consideration for the proposed sale of the five per cent shareholding in the company was to initiate a process in which the Nigerian public can benefit from the phenomenal successes recorded by EPCL, as Indorama, the Core Investor also agreed that it would make available between 20 and 25% of EPCL shares via Initial Public Offering (IPO) within a period of five years from the effective date on which the Share Purchase Agreement for the five per cent would be signed.”
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BPE report: Beneficiaries of privatisation shift battle to court