Despite Supreme Court ruling, UC RUSAL, operators of Aluminum Smelter Company of Nigeria on Thursday, denied representatives of the BFIG Corporation access to the plant in Ikot Abasi Local Government Area of Akwa Ibom State.
This is predicated on the acts of illegalities and vested interest perpetrated by Bureau of Public Enterprises (BPE) in the sale of the plant to BFIG Group.
The BFIG group led by its president, Reuben Jaja and representatives of the Bureau of Public Enterprise (BPE) were on official tour to evaluate the state of the plant in line with the Supreme Court judgement of July 7, 2012.
The apex court had ruled in favour of the BFIG group in a suit filed by the BPE.
On Friday, January 26, 2024, the Supreme Court sent the former Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, to jail for 30 days for what it called serial contempt and disobedience of the orders of the courts.
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On Thursday, May 16, 2024, BFIG corporation began the process of taking over the moribund Aluminum Smelter Company of Nigeria (ALSCON) in Ikot Abasi Local Government Area of Akwa Ibom State from its current operators, RUSAL.
Recall that the apex court had, since 2012, ruled that the BFIG group is the preferred bidder for the smelter but RUSAL said that it had secured judgement from the London Court of Arbitration that ALSCON was properly privatized.
In an attempt to enforce the judgement of the Supreme Court, BFIG group led by its President, Chief Reuben Jaja and representatives of the Bureau of Public Enterprise (BPE) visited the ALSCON plant, but they were denied entry by RUSAL
It was gathered that when the BFIG delegation arrived, the ALSCON gate was securely locked and mounted by a combined team of the police and army officers.
It took several hours of persuasions for officials of ALSCON to allow just one representatives of BFIG to go in and hold talks with the Russians while the rest of the delegation waited in the scorching sun for more than four hours.
Answering questions from journalists after the long wait outside the gate, lead counsel to the BFIG group, Chief Patrick Ikwueti (SAN), said they were in ALSCON, after a meeting with the Attorney general of the Federation Lateef Fagbemi, to begin the enforcement of the Supreme Court judgement
Ikwueti said, “We are here because following the last Supreme Court judgement over the ALSCON matter, the one that was given on the 26th of January, 2024, we had a meeting with the Attorney General of the Federation and the BPE and we agreed on a number of things we have to do to fully enforce the Supreme Court judgement given on ALSCON since 2012, and part of what we agreed was that we should have a visit to ALSCON facility here in Ikot Abasi.”
He said though the BFIG representatives had limited access into the premises, the company is satisfied that ALSCON actually exist in terms of physical building, adding however that he does not know the actual state of the plant.
ALSCON Managing Director, Dmitriy Zaviyalov had claimed during a media interaction with journalists in Uyo that ALSCON and the Nigerian Government had agreed that the last court of arbitration would be the London Court of Arbitration.
“You should understand that in our agreement with the Nigerian Government, it was agreed that the last court of arbitration would be the London Court of Arbitration,” Zaviyalov had said.
But reacting to Zaviyalov’s claim, Ikwueto said that the Supreme Court in it last judgement had underscored that that agreement was in itself a contempt of the court.
“While we were in court in 2004 and 2006, the Russians purportedly signed an agreement with BPE. That agreement was signed while the matter was still pending before the court.
“But the Supreme Court of Nigeria in 2012 was specific that there was an order of injunction perpetually restraining the BPE from negotiating, selling or transferring ALSCON to anybody.
“So, the arbitration that you are talking about was based on Shared Purchase Agreement (SPA) they claimed to have signed in 2006 while the matter was pending in court.
“The Supreme Court, in it last judgement of 26th January, 2024, underscored that the agreement was, in itself, a contempt of the court,” Ikwueto stated.
Our correspondent reports that the youths of Ikot-Abasi LGA had earlier on Saturday morning staged a protest to register their grievances against the Russians for locking the gate against BFIG group.
The protesters displayed placards with various inscriptions expressing their happiness over the Supreme Court judgement which declared BFIG group winner and preferred bidder for ALSCON.
BPE’s acts of illegalities
The bid for ALSCON, which began in earnest after previous failed attempts, ended in June 2004.
After the technical and commercial bids, the NCP announced the Nigerian—American consortium, BFIGroup Corporation, as the winner and preferred bidder with an offer of $410 million over its Russian rival, UC RUSAL, which offered $205 million it promised to pay over 20 years.
In line with the bid guidelines, the bid winner should have been issued the formal letter of proclamation immediately after the bid and demand made for the payment of 10 percent of the bid price after the signing of the share purchase agreement (SPA). But BPE failed to adhere to its own rules by not issuing the letter immediately to BFIG.
When it finally did 48 hours later, a portion of the letter derailed fundamentally from the terms agreed by all parties at the technical bidder’s conference before the bid. Rather than demand for the payment of 10 percent of the $410m bid offer (about $41m) within “15 working days of signing the share purchase agreement (SPA),” BPE asked for the payment “within 15 days of the receipt of the letter.”
BFIG refused to sign the letter. Its principals insisted on BPE complying with the agreed terms. After the June 17, 2004 deadline, BPE announced the disqualification of BFIG for failing to meet the payment schedule. BPE later invited UC RUSAL to take over ALSCON on “willing seller-willing buyer” terms.
BFIG sues BPE
BFIG took the matter before the Federal High Court, Abuja to request an order compelling BPE to comply with the agreed bid guidelines. The case went all the way to the Supreme Court, which on July 6, 2012, ruled on the appeal filed by BPE over the outcome of the high court proceedings.
The five-man panel of the apex court in a unanimous verdict made the following pronouncements: “I. An Order of specific performance is hereby decreed directing the Defendant/Respondent to provide the mutually agreed Share Purchase Agreement for execution by the parties to enable the Plaintiff/Applicant pay the agreed 10% of the accepted bid price of $410million (i.e. the sum of $41million) within 15 working days from the date of the execution of the Share Purchase Agreement in accordance with the agreement dated May 20, 2004, and the 90% balance bid price shall be paid within 90 calendar days.
“II. An Order for the Defendant/Respondent to accept payment of the 10% of the bid price from the Plaintiff/Applicant within 15 days from the date of signing the Share Purchase Agreement (SPA).
“III. An Order of perpetual injunction restraining the Defendant/Respondent, its servants, agent, privies, management, or howsoever called from inviting any further bidding for the sale and acquisition of ALSCON in violation of the contract between the Plaintiff/Applicant and Defendant/Respondent and/or from negotiating to sell, selling, transferring or otherwise handing over the Aluminium Smelter Company of Nigeria (ALSCON) to any person or persons in violation of the contract between the Plaintiff/Appellant and the Defendant/Respondent.”
Several months after the Supreme Court’s ruling, BPE refused to obey and enforce the order despite several reminders by BFIG.
On January 29, 2013, BPE, ostensibly moving to comply with the Supreme Court order, sent a letter to BFIG with an offer to “Purchase 77.5 percent shares of the ALUMINIUM SHELTER COMPANY OF NIGERIA, ALSCON”, a non-existent company, instead of ALUMINIUM SMELTER COMPANY OF NIGERIA, ALSCON.
Also, the letter was accompanied by a 16-page SPA, instead of the 58-page SPA sent to BFIG on October 8, 2012, for review and approval. BFIG refused to accept the letter until BPE corrected mistake in the name of the company, accompanied by the authentic SPA, along with all annexures of 17 key items, including financial statements of ALSCON for the year ended December 31, 2004, ALSCON post-acquisition plan, List of assets and liabilities of ALSCON; List of Facilities of ALSCON; List of land Plots of ALSCON; List of Compensation Scheme of Employees of ALSCON, and List of Employee Benefit of ALSCON.
The other items include the List of Intellectual Property of ALSCON; List of Material Contracts of ALSCON; List of Banks of ALSCON; List of Government Authorities of ALSCON of ALSCON; Natural Gas Sales and Purchase Agreement; Federal Republic of Nigeria Officials Gazette, and Power of Attorney.
BFIG’s refusal to sign the document angered BPE which accused it of disobeying the Supreme Court order.
BPE joins RUSAL for review of Supreme Court’s order
On December 19, 2014, BPE joined Dayson Holdings Limited (DHL), the Nigerian special purpose vehicle used by UC RUSAL to participate in the bid for ALSCON, to file case No.CA/A/637/2014 at the Appeal Court seeking the review of the order.
On January 11, 2019, Justice Abdu Aboki of the Appeal Court delivered a judgment reaffirming the sanctity of the Supreme Court ruling and ordered full enforcement by BPE.
Justice Aboki directed BPE to “provide the mutually agreed Share Purchase Agreement (SPA) for execution by the parties” to “enable BFIG to pay the agreed 10 percent of $410m (about $41m) within 15 working days from the date of the execution of the Share Purchase Agreement by the agreement dated May 20, 2004. The balance of 90 percent of the bid price, shall be paid within 90 calendar days as ordered by the Supreme Court.”
Between January 14 and 25, 2019, BFIG wrote several letters to BPE to draw its attention to the consequential orders of the Appeal Court and the need to comply with the subsisting judgment of the Supreme Court.
BFIG commences contempt proceedings against BPE
When BPE failed to respond to the series of letters, BFIG, in April 2019, commenced contempt proceedings at the Federal High Court, Abuja against it and its Director General, Alex Okoh.
On December 17, 2019, the court presided by Justice Anwuri Chikere ruled that Okoh should be sent to jail for failure to cause BPE to fully execute the judgments of both the Supreme Court and Court of Appeal regarding the unilateral cancellation of the outcome of the 2004 bid for ALSCON.
On December 24, 2019, BPE filed an appeal. But the three-man Court of Appeal made up of Justices Stephen Adah, A. Mustapha, and Kenneth Amadi in a unanimous verdict affirmed the order of the Federal High Court, Abuja.
On Friday, January 26, 2024, the Supreme Court in a unanimous ruling read by Justice Tijjani Abubakar on behalf of the five-member panel affirmed Okoh’s conviction and sentenced him to 30 days in prison for contempt as a result of his serial disobedience of the court order.
The panel held that there was incontrovertible evidence that BPE and Okoh individually and collectively flouted the Supreme Court order restraining them from selling ALSCON to any other person or group, except BFIG, which was declared the winner of the bid in 2004.
In the lead judgment, Justice Abubakar Tijjani condemned BPE and Okoh for treating the Supreme Court’s order with disdain, insisting the decision to have re-offered ALSCON to UC RUSAL constituted a blatant disregard to the apex court’s order and therefore constituted a grievous and contemptuous offence.
Justice Abubakar found particularly irking BPE and Okoh’s disregard of the order, which “perpetually restrained them and their servants, agents, privies, management or howsoever called from negotiating the sale, selling, transferring or otherwise handing over ALSCON to any other person or persons, in violation of the contract between the BPE and the BFIG.”
Justice Abubakar held that the execution of another SPA on February 17, 2018 at the Ministry of Mines and Steel Development by the BPE with UC RUSAL was no doubt a blatant disregard of the order of the Supreme Court.
“It does not lie in the mouth of the appellants to assert that they have complied with the order of this court when it is evident from the record (of the court) that they acted in utter disregard of the order.
“They treated the order of this court with utter disdain and flagrant disrespect. The conduct of the appellants constitutes blatant disrespect and it is therefore scandalous and shameful.
“It is disgraceful that an agency of government decided to hold the economy of the country hostage. Agencies of government must respect the rules. Nobody in this country is above the law.
“Both the government and the governed are subject to the rule of law. The appellants are not at liberty to choose which of the orders of this court to obey and which one to ignore.
“I must say the conduct of the appellants in this case offends the majesty of the law and undermines the dignity of the court.
“By acting in defiance of the order of perpetual injunction handed down by this court, the stage was obviously set for the second appellant’s (Okoh’s) committal to prison,” he said.
In dismissing the appeal by BPE against the judgment of the Court of Appeal delivered on January 21, 2022, to uphold Okoh’s conviction for contempt, the Supreme Court awarded a cost of N10m in favour of BFIG to be paid personally by Okoh, in addition to his jail term.
The new way
The crisis in the ALSCON transaction was because BPE, which was saddled with the responsibility of superintending over the process decided to kick the rules it established to guide the process and wander into the bush.
By dubiously refusing to acknowledge the winner of the bid and opting to jump into bed with another suitor, BPE betrayed the trust reposed in it and compromised and jeopardized the collective interest of all Nigerians who expected a quick turnaround of the company to help contribute to the economic wellbeing of the country.
Again, attempting to manipulate the process towards some vested interests lend credence to the view in some quarters that all that BPE did in the last 10 years should be subjected to scrutiny and review, to ensure Nigerians were forced to hold the short end of the stick in all the transactions.
For ALSCON, the Supreme Court has half-solved the crisis, by tracing the roots of the problem to BPE’s indiscretion to cancel the win by BFIG and attempting to manipulate the process in favour of some subterranean interests.
Having already issued an order for the termination of the dubious agreement UC RUSAL and imposing a perpetual injunction restraining BPE from negotiating with any interested party other than BFIG, the way forward is for BPE or any other agency of government vested with the powers to cater for the government interests in public entities, to enforce to the letter the Supreme Court order on ALSCON.
First, negotiations must be convened immediately based on the outcome of the bid process of June 2004 to provide a mutually agreed Share Purchase Agreement for execution by the parties to enable BFIG to pay the agreed 10% of the agreed bid price within 15 working days from the date of the execution of the Share Purchase Agreement, and the 90% balance within 90 calendar days.
Regardless, a lot of water has passed under the bridge between when the bid was concluded in 2004 and today. If the $410m bid offer by BFIG was based on its evaluation of the current status of the plant before the bid exercise in 2004, considering the number of years BPE illegally handed over the plant to UC RUSAL to manage, amid allegations of massive asset stripping, justice, and equity demand that the negotiations would cover a joint technical re-evaluation, assessment and audit of the entire plant to come up with an acceptable and fair value.
Second, all persons who were involved in the bid exercise, who is found to have been indicted to one role or another that contributed to the frustration of the completion of the transaction should be made to face the full wrath of the law for economic sabotage to serve as a deterrent to others.
