10 Years After: ALSCON Sale Still Mired In Controversies

The protracted bitter fight for the soul of Aluminium Smelter Company of Nigeria (ALSCON) located in Ikot Abasi, Akwa Ibom State, which started on Monday June 14, 2004 when financial bids for its privatisation were opened at the then NICON Hilton Hotel (now Transcorp Hilton), Abuja has again been renewed. On that day, the BFIG, a United States registered company competed with RUSSAL, the Russian aluminium conglomerate and won with a bid of $410 million. RUSAL on the other hand, submitted a conditional bid price of $5 million with an additional $200 million to be paid over 20 years or by 2025. One of the rules was for bidding companies to accompany their documents with a bid bond of $1 million but the Russian company refused to comply. Nonetheless, it was allowed to bid
Eventually, BFIG was declared preferred bidder after the United States Government, a major sponsor of the privatisation process was alleged to have intervened and the company was given a 15 day deadline within which to pay the initial 10 percent of the bid price. BPE said it failed to meet the deadline and was promptly disqualified. The company was then handed over to RUSAL.
Since then however, BFIG has not relented in trying to ensure that it regained the ownership of the company.
On May 20, 2004, BFIG filed suit No: FHC/ABJ/CS/583/2004 against BPE and UC RUSAL at the Federal High Court, Abuja to seek an order of specific performance mandating the BPE to sell ALSCON to it in accordance with the terms of understanding/agreement for the sale of ALSCON dated May 20, 2004. The suit failed. Again, it proceeded to the Court of Appeal and failed. At the Supreme Court however, all its prayers were granted on July 6, 2012.
Among others, the Supreme Court gave “An order of specific performance is hereby decreed directing the respondent to provide the mutually agreed Share Purchase Agreement (SPA) for execution of the parties to enable the plaintiff/appellant pay the agreed 10 per cent of the acceptable price of $410million (that is $41million) within 15 working days from the day of the execution of the SPA in accordance with the agreement dated 20/5/2004 and the balance 90 per cent of bid price shall be paid within 90 calendar days.
The court also asked the BPE to invite BFIG to renegotiate, sign and execute forthwith, “the mutually agreed Share Purchase Agreement, SPA, annexed to the applicant’s motion,”
Following the Supreme Court judgment, United Company RUSAL proceeded to a London Court of International Arbitration seeking an order prohibiting the Federal Government of Nigeria from executing the decision of the Supreme Court to its detriment and, alternatively granting damages in the event that RUSAL should suffer a loss to its ownership of the stake in ALSCON.
UC RUSAL claimed that the recent judgment by the Supreme Court of Nigeria ascribing a large percentage of ALSCON share capital to BFIG is a calculated “attempt to take away their lawful ownership of the company from unseen quarters.”
BPE then issued an offer letter dated January 29, 2013 entitled: “Offer to Purchase 77.5% shares of the aluminium shelter company of Nigeria, ALSCON” to BFIG accompanied by a 16-page share purchase agreement (SPA) dated May 20, 2004, for execution by BFIG.
BFIG on receiving the letter wrote to BPE seeking clarifications on the discrepancy on the unilateral “invitation to acquire aluminium shelter”, instead of the aluminium smelter it bided for and was declared the preferred bidder.
An official of the company accused BPE of refusing to reply to the correspondence by BFIG but rather, again revoked the offer, ignoring the discrepancies in the offer letter and SPA, which BFIG had sought clarifications to on more than one occasion.
The revocation of the offer had compelled BFIG to return to the court to seek the enforcement of the ruling in 2013.
This then compelled BFIG to again approach the apex court for a legal request to compel BPE and RUSAL but it was asked to return to the original court of jurisdiction since the judgment was unambiguous.
The Abuja Division of the Federal High Court on Tuesday delivered its judgment to again order the immediate handing over of the operation of ALSCON to the Nigerian-American consortium.
In his judgment on September 30, 2014, Justice Abdulkadir Abdulkafarati ordered ‎BPE “to fully enforce, fulfil and give effect to the meaning and intendment of the judgment of the Supreme Court of Nigeria in appeal No. SC 12/2008 dated July 6, 2012 by signing and executing forthwith, the mutually agreed Share Purchase Agreement, SPA, annexed to the applicant’s motion.”
Abdulkafarati said ‎”The respondent (BPE) shall accept 10 per cent of the purchase price, or $41million to be paid within 15 days of this enforcement order. The balance of $369million to be paid as per the audited financial statement as at the date of this judgment, September 30, 2014,” the judgment directed.
And so, on Saturday October 11, 2014, Chief Executive Officer of BFIG, Dr. Reuben Jaja visited the Paramount Ruler of Ikot Abasi, Edidem Joe Ntuk-Obom xii, in his palace at Ikot Abasi proclaiming that ALSCON would resume full operations on October 24, 2014.
He said that the recent judgment by the Supreme Court of Nigeria in favour of BFIG Corporation paved the way for its resumption of business.
Jaja who was accompanied by some U.S.- based partners said the visit was to inform the royal father and the people of Ikot Abasi of the court judgment after 10 years of legal battle.
He said that BFIG had battled legally to claim ALSCON since 2004 until September 30, when the court gave judgment in its favour to take over the company.
“The judgment was clear; it approves the purchase agreement that both party signed and ordered it to be implemented immediately. The Bureau of Public Enterprise (BPE) should immediately takeover ALSCON and prepare it for handover to BFIG. The court ordered that we have exclusive right, unrestricted access, unperturbed to go in to ALSCON and conduct our due diligence, which include financial accounting, environmental, personnel and engineering.
“The court also ordered the Inspector General of Police and other security agencies in the country to enforce the order. So these are the orders that came out from the last ruling. That is why we decided to come home and meet our leaders and tell them that after 10 years of struggle, this is where we are and we are ready to take over ALSCON immediately,” he added
He promised to diversify the company’s operations by investing in other ventures apart from aluminium to create more jobs for the people as ALSCON has the potential to diversify into gas production, electricity generation and estate management.
“Apart from aluminium, there is power, about 540 megawatts, as well as operation of almost 50 billion cubic gas operation in a year. You can also see water; there is a very extensive water treatment plant and housing or estate development. Also, there is a laboratory which is one of the best in the area that can conduct mineral analysis and a 200-bed hospital that can be improved upon or upgraded to provide health services to our people.”
But the BPE in a prompt reaction refuted the claim.
Mr. Chigbo Anichebe, Spokesperson for the BPE said in a statement that it has not handed over ALSCON to BFIG or, for that matter, any other group other than the present managers, UC RUSAL.
“It is important to note that the Bureau only hands over federal government assets to those who bid and fully pay the bid consideration. BFIG has not paid a kobo.”
The privatisation agency said it performed its obligations under the Supreme Court decision of 6 July 2012 but BFIG failed to perform its part of the obligations, the result being that BFIG has no right to the said shares.


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