…Mines and Steel Ministry was not carried along in privatization process-Ogah
…We ‘re not happy with Premium Steel-BPE
…We didn’t take over AMCON management only asset charged to loans
…as lawmakers summon MD of Delta Steel Coy
By Levinus Nwabughiogu-Abuja
Leaders and youths from Aladja community in Udu local government area of Delta State have threatened to shutdown operations of Premium Steel and Mines Limited.
Premium Steel are managers of Delta Steel Company, DSC acquired through its privatisation by the federal government in 2005.
The threat followed a walkout staged by the representatives of Premium Steel company from an investigative public hearing on the collapse of DSC, by the Committee on Steel of the House of Representatives on Monday in Abuja.
The hearing was however sequel to a motion brought before the House by Hon. Ben Rollands Igbakpa representing Ethiope Federal Constituency of the State considered by the lower chamber of the National Assembly in 2020.
Trouble started when the Counsel to Premium Steel refused to be put on oath as directed by the House Committee, saying he was only a representative.
Just when he was about making his presentation, the Committee raised a motion, saying that while the counsel was at liberty to guide his clients, he however cannot speak for the company before the parliament.
The Committee therefore resolved to invite the Managing Director, MD to appear before them.
Swiftly, the counsel and his colleagues packed their belongings and exited the venue of the hearing.
All entreaties from the lawmakers to them to return failed as they left.
The counsel also refused to speak to Journalists when approached for comments.
Vexed by the development, some members of the host communities pounced on the counsel and his team, threatening to shutdown their operations.
The development temporarily disrupted the proceedings of the committee before resumption.
Premium Steel has failed the people-Hon. Igbakpa
Earlier in his remarks at the hearing, Igbakpa said that the company was occupied 172 hectares valued today at N1.89 billion donated by various communities for the production of steel and the development of the community.
He said that the Premium Steel however collected loan they couldn’t pay, making Assets Management Corporation of Nigeria (AMCON) to take over the assets to recover the loan.
He also alleged that equipment are being carted away from the facility, saying that the company established to create jobs for the people had failed in that direction.
Ministry of Mines and Steel was not carried along in privatization process of DSC-Ogah
Testifying before the Committee, the Minister of State for Mines and Steel, Uche Ogah said that the ministry knows little or nothing about the company as it was not not carried along in the privatisation process.
He said that the Ministry of Finance and the Bureau for Public Enterprise, BPE are to be held responsible.
“Delta Steel as far as I know is a private entity as at today. Most of the investigation should go between the BPE and the Ministry of Finance because the ministry was not carried along in the process. So, the ministry has little or nothing, not much to submit. But I am aware that my colleague visited the premises and he has no good testimony to say about the visit. The essence of some of those industries were established for the industrialization of this country, Nigeria. I am one man that is against privatisation without getting to the root and cause the organization collapsed.
“I believe that one of the things we are doing here today is to investigate to know the reasons. First, what led to the collapse of DSC. Two, the process of sales and three, the continuity, the growing concern of the business. So, for us at the ministry, when all the assets were transferred to BPE, we have little of nothing; we were carried along. So, we may not have much to say. But I know that the company that bought over DSC has been coming, that is Premium Steel.
“Global Infrastructure is the old one before they moved to Premium Steel. There as a lot of issues on that asset because the asset was used to borrow money and in the process of borrowing money, it was transferred to AMCON and AMCON had to sell. Global Infrastructure was involved and along the line, they used the asset which was one of the reasons they were not supposed to use the asset of the company to borrow money. So, they borrowed money and in the process, the banks have to transfer the debt to AMCON and AMCON now sold the asset to Premium Steel. That’s the situation.
“For me, there is a lot of detailed work that needs to be done as regards to the issue of the sale of DSC. But over the time, I have had one or two contact with the current investors and one of their complaints is they want a fair leveling operation with other steel operators in the industry. They want concessions and they have written some proposals which they sent to the office. So, when we look at the process of sale to what led to the the collapse and using the assets to borrow money; what transpired between AMCON and how much was paid on the cost of appreciation of the asset and what is the current situation of operation of the current owners of the business because as at today, it is a private entity. It is no longer owned by the federal government.
“It is not a conclusion. We are here as people. We invite investors. When investors were investigating, you didn’t tell them it was somebody’s land. It was given by a community but the essence is for that place to be operational. That’s the major thing and that’s what I said.
“I said whether we like it or not, it’s a private entity and all we need to do is to ask the private entity, why are you not operating. They are not in the business of selling land. What was the agreement with BPE? The House of Representatives needs to review. What was the agreement and let’s look at the details and then, we can bring BPE to answer some of the questions. Some of the clauses that are supposed to be there, are they there? If they are not there, why? If they are there, are they being implemented by the current operators? These are some of the questions that need to be properly discussed.
“So, for us in the ministry, it is no longer under our ministry. So, there is little or nothing to discuss about DSC, Alaja.”
BPE not happy with Premium Steel-Director
For the BPE, Premium Steel had deviated from its mandate, a development which the agency said was worrisome.
Represented by its Acting Director Industries and Communications Department, Larai Bode, BPE while giving highlights of the privatisation process said AMCON intervened to save the company.
“The FG privatized 80 percent of DSC equity to Global Infrastucture. It was privatized in 2005 to Global. Before the privatisation process, it underwent two processes. First advertisement did not yield much desired results. Then, it was advertised a second time where BUA emerged as the preferred bidder, but due to unresolved issues with BUA, the FG resolved to engage the willing seller, willing buyer strategy. During that process, Global Infrastructure was engaged and the company was sold to them at the price of $30 million with the caveat that they should dredge the Escravo Bar. Global took over the managemnt of the company in 2005 and they did not commence immedtate operations because they needed to fix up the machineries because at the time it was privatized, the company was not in prodcution. So, they were able to fix and then operated for about eight months and then it shut down.
“Global Infrastructure took loans from about eight banks amounting to over 30 billion naira. So AMCON came up and took over the company because the management of Global could not pay those loans. So, based on their mandate AMCON appointed receiver managers and the receiver manager negotiated with Premium Steel and sold the comany to them. During that process, BPE was not involved and we are not happy with what is happening. Premium Streel are not into production, but rather they are into different busniess which is not known to BPE”, she said.
We didn’t take over management of DSC, only the assets-AMCON
In a similar situation, the representative of AMCON, Albert Onozie from the Legal Department said it was a misconception to say that the Corporation took over the management of DSC.
According to him, AMCON only took over the assets of the company as its mandate stipulated because of the failure to pay back the loan acquired and not the daily-to-day operations of the company.
“AMCON came into the picture as a result of the loan by Global. One of the loans we bought was that that had to do with the steel company. What we quickly did was to appoint a receiver manager by virtue of our act and certain provisions of the debenture to take over the assets of DSC not the running of the company. We took over the assets charged to the loans that were borrowed and as a result of that we realized the loan that was taken.
“Strictly speaking, we did not take over the running or management of Delta Steel. Whatever transpired beyond the loan that was taken we cannot say anything about that. We never took over DSC but the assets charged to the loan which AMCON acquired from the various banks and those assets are the assets AMCON is empowered to deal with and AMCON did deal with those assets”, Onozie said.
Revoke sale of DSC-Host communities beg FG
In his presentation, the Chairman of Udu Local government, Hon. Jite Brown appealed to the government to revoke the sale of the company.
“There is nothing in that place today. As we speak, there is no electricity in that place. They are only interested in increasing school just to extort money. They sell our land under the platform they were directed by the federal government. We have arrested them on many occasions. At the level of the council, we have called several security meetings, they said that AMCON has given them the power to do whatever they are doing.
“We want this Committee to revoke the sale of DSA and to recover all that had been handed over to them”, he said.
Also, Dakpos Damijo, a former Director in the DSC and Community Leader corroborated the chairman’s position.
“As we are here, the looting in DSC is still going on. The cannibalization of FG property is still going on. The FG should go there and recover it. What the management is just doing there is assets tripping. They are not contributing to the development of steel making.
“FG to revoke the agreement with Premium Steel to run the platform. They are not capable. They are just there selling the property”, he said.
Ruling on the matter, the Chairman of the Committee, Hon. Abdulahi Ali (APC-Kogi) described the walkout as embarrassing to the parliament.
“You can all see the criminal behaviour of Premium Steel and everybody is embarrassed because they cannot walk out of the parliament, this committee is an offshoot of the parliament and we cannot tolerate it.
“In view of their baviour, because all of us are here, the honourable members are here, the minister is here, the representatives of the committee are here, every critical stakeholder is here and for the Premium Steel management to has walked out on this parliament is a disgrace to this nation.
“In view of that, I hereby summon the Managing Director to appear before the parliament on Wednesday November 3, 2021,’’ he said.