The Director General of the Bureau for Public Enterprises (BPE), Ayodeji Ariyo Gbeleyi, has revealed that Delta Steel Company, valued at over $700 million, was sold for just $30 million.
Speaking before the House of Representatives Committee on Public Assets on Friday, Gbeleyi stated that under the Federal Government’s privatization policy, 80% of Delta Steel Company in Aladja, Delta State, was sold to Global Infrastructure Nigeria Ltd (GINL) in 2005, while the government retained a 20% stake.
He explained that residential buildings and land owned by the company were used to settle workers and pensioners. After privatization, GINL reportedly used Delta Steel Company’s assets as collateral for a loan from Ecobank.
He added that due to non-performance, the Asset Management Corporation of Nigeria (AMCON) acquired the assets in 2015 and sold them to Premium Steel and Mines Ltd.
Gbeleyi accused AMCON of failing to seek clarification from BPE before selling the assets and added that while BPE was aware of the loan from Ecobank, it had no knowledge of three other banks listed by AMCON as creditors.
The petitioners, including Association of Concerned Residents of Camp 2, 4 and 5 of Delta Steel Company, Aladja, Warri, before the involvement of AMCON and Premium Steel and Mines in DSC assets, they had been staying in the estate and plots of land which were used to settle them base on the contractual agreement.
The petitioners claimed that they have been under constant intimidation and harassment by police and army personnel since 2015, claiming to be acting on the instructions from AMCON and Premium Steel and Mines that they should vacate the estates.
Speaking on behalf of the petitioners, Dr. David Emomotimi and Richardson Osifor, said the assets AMCON acquired were assets used as collateral by Global Infrastructure Nigeria Ltd to obtain loan from Ecobank which did not in any way include the residential buildings.
Osifor said from the contract agreement and information at the Corporate Affairs Commission, the loan Global Infrastructure Nigeria Ltd obtained from Ecobank was N250 million but AMCOM jacked it up to N7 billon.
In their submission, the representatives of AMCON, Chukwuemeka Umunakwu (AMCON legal unit) said AMCON acquired the assets of DSC used as collateral to obtain loan from four banks to prevent them from collapse.
He said AMCON acquired the assets at N22 billion but sold it to Premium Steel and Mines at N32 billion.
Replaponding to enquiry by the committee whether the office of the Accountant General of the Federation has the receipt of payments by both BPE and AMCON in respect of sales of Delta Steel Company’s assets, the representative of AGF, Kabiru Ademola (Director, Finance) acknowledged receipt of N3 billion in favour of BPE in respect of sales of 80% of DSC assets to Global Infrastructure Nigeria Ltd.
He said the AGF is yet to get any response from Central Bank, regarding claim of payment of N32 billion by AMCON in respect of DSC assets to Premium Steel and Mines Ltd.
According to him, though AMCON claimed the money was paid to FG account, (TSA), the agency was unable to provide the proof of payment to the committee.
In his submission, Managing Director/CEO of the Ministry of Finance Incorporated (MOFI), Dr. Armstrong Takang said though MOFI is responsible for overseeing the management of assets and investments in the country, the agency withdrawn from the issue of Delta Steel Company due to so many controversies.
Takang expressed concern over the collapse and death of Delta Steel Company and similar entities in the country. .
He said: “If our forefathers who were less exposed and less educated would build such infrastructure and maintaining it by our contemporary leaders whore are more exposed and educated than them will be a problem, I wonder what will be the future of the country.”
Chairman of the Committee, Ademorin Kuye (APC, Lagos) said the committee whose mandate includes oversight over the use, management and disposal all federal government assets within and outside the country decided to probe the purported sales of the Delta Steel Company and the controversies surrounding its acquisition by AMCON.
The committee directed AMCON and Premium Steel and Mines to desist from harassing the residents of the estate in Delta Steel Company untill the investigation is completed.