The Asset Management Corporation of Nigeria (AMCON), under then Managing Director Ahmed Kuru, sold Delta Steel Company to Premium Steel and Mines Limited just four months after the latter was incorporated.
It was revealed that AMCON and Premium Steel, a company owned by Mr. Sunil Vaswani and other institutional investors, finalized the sale in March 2015, only four months after the company’s registration.
A document obtained by SaharaReporters shows that Premium Steel and Mines was incorporated in Lagos, Nigeria, with registration number 1231651, and registered as a private company limited on December 17, 2014.
Vaswani, an Indian-born Nigerian billionaire businessman, is the chairman of the Stallion Group—a Dubai-headquartered company with diversified interests in cars, commodities, food, steel manufacturing, plastics, packaging, petrochemicals, port operations, and technology.
Vaswani promised to inject N70 billion in the first phase and N300 billion in the subsequent phases of investment in the company. However, the sale was immediately marred by controversy.
Chief Ajibola Aribisala (SAN), a lawyer appointed as the receiver/manager of the company by AMCON, urged then-President Muhammadu Buhari to cancel the deal.
Aribisala claimed that AMCON sold the company for N28 billion, whereas a Chinese company, China Polaris Technologies Company Ltd, had offered N33 billion and was ready to pay the total sum upfront.
He described the sale as “an economic sabotage or economic crime since the proceeds of sale, which is quite below the sum of N33 billion which China Polaris Technologies Company Ltd, the highest bidder would have paid, belongs to the Federal Government of Nigeria by virtue of AMCON being a Federal Government agency.”
“The sum of N33 billion, which was the best offer received on the disposal of the assets of the company, would have been more than enough to discharge the debts owed to AMCON and several unsecured creditors, being owed to staff and ex-staff of Delta Steel Company Plc as pensions and gratuities,” Aribisala said.
According to the lawyer, Vaswani offered to pay 10 percent of the sale within 30 days after the offer’s acceptance and to spread the balance over eight years, with a one-year moratorium.
He added that his refusal to accept Vaswani’s offer led AMCON to terminate his company’s appointment as receiver/manager.
Vaswani initially intended to buy the company with West African Mines and Steel Limited before ultimately purchasing it with Premium Steel and Mines Limited.
Aribisala also lamented the sale of the company to Premium Steel, which had only recently been incorporated.
“It is also interesting to note that the said Premium Steel & Mines Ltd was only incorporated, for the above purpose, on December 14, 2014, when the bidding was already in full progress, thus, the company did not submit any bid on the sale of the assets, yet it was the same company that the assets of Delta Steel Company Plc were purportedly sold to,” he said.
On Friday, the Director General of the Bureau for Public Enterprises (BPE), Ayodeji Ariyo Gbeleyi, revealed that Delta Steel Company, once valued at over $700 million, was sold for a mere $30 million under Nigeria’s privatisation policy.
SaharaReporters learned that Ahmed Kuru, a former AMCON MD, who faces allegations of monumental fraud amounting to N20 billion, among others, was behind the corruption-ridden sale of Delta Steel Company.
Speaking before the House of Representatives Committee on Public Assets, Gbeleyi detailed how 80% of Delta Steel Company, located in Aladja, Delta State, was sold to Global Infrastructure Nigeria Ltd (GINL) in 2005, with the government retaining a 20% stake. As part of the privatisation process, residential buildings and land owned by the company were allocated to workers and pensioners as settlements.
Gbeleyi further revealed that after acquiring the company, GINL used Delta Steel Company’s assets as collateral for a loan from Ecobank.
Due to non-performance, AMCON took over the assets in 2015 and later sold them to Premium Steel and Mines Ltd.
He accused AMCON of failing to seek BPE’s clarification before executing the sale and stated that while BPE was aware of the Ecobank loan, it was unaware of three additional banks listed by AMCON as creditors.
Last Tuesday, SaharaReporters reported that Sigma Golf Nigeria Limited, a co-defendant in the trial of Ahmed Kuru, was convicted and sentenced for fraud by Justice R.A. Oshodi of Special Offences Court, sitting in Ikeja, Lagos.
Kuru, the first defendant is facing prosecution by the Economic and Financial Crimes Commission (EFCC), alongside Sigma Golf Nigeria Limited on amended six-count charge, bordering on conspiracy, stealing, dishonesty and criminal conversion to the tune of N20 billion.
At Tuesday’s proceeding, prosecution counsel, Rotimi Oyedepo, SAN informed the court that the reason for the amendment of the charge had to do with Sigma Golf Nigeria Limited, represented by Umaru Hamidu Modibbo.
One of the counts reads: “Ahmed Kuru, Umaru Hamidu Modibbo, Ifie Sekibo (at large) and Sigma Golf Nigeria Limited sometime in 2016 in Lagos, within the jurisdiction of this Honourable Court, conspired amongst yourselves to commit felony, to with: stealing by dishonestly converting the total sum of Twenty Billion Naira (N20,000,000,000) property of Asset Management Corporation of Nigeria through Heritage Bank Limited to the use of Sigma Golf Nigeria Limited for the acquisition of Keystone Bank Limited.”
Kuru, pleaded “not guilty” when the charges were read to him, while Sigma Golf Nigeria Limited pleaded “guilty.”
Global Infrastructure Nigeria Ltd (GINL) and Premium Steel and Mines Ltd have both been involved in the ownership and management of the Delta Steel Company, but during different periods and under distinct circumstances.
In 2005, the Nigerian government privatised 80% of DSC’s shares, selling them to GINL, while retaining a 20% stake.
GINL faced significant operational difficulties, leading to the revocation of its ownership by the late President Musa Yar’Adua in 2008.
Following GINL’s challenges, AMCON acquired DSC’s assets to prevent financial collapse. In 2015, AMCON sold DSC’s assets to Premium Steel and Mines Ltd.
The sale of DSC has been controversial, with reports indicating that assets valued at $700 million were sold for $30 million.
Petitioners have claimed that AMCON acquired only the assets used as collateral by GINL for loans, excluding residential buildings.