Who wants to ruin ALSCON?
By Mbuotidem Okon
Many Nigerians are wondering what has become the fate of the Aluminum Smelter Company of Nigeria (ALSCON) situated at Ikot-Abasi Local Government Area of Akwa Ibom State. The project which was conceived by the Federal Government to fast-track the production of Aluminum-related products has remained moribund due largely to bureaucracy and vested considerations by unpatriotic Nigerians who would rather service self and foreign interests than that of the country. But recent revelations emanating from conflicting court orders appear to be as confusing as riddles told to children in a moon-light drama.
Whereas the Bureau of Public Enterprises (BPE or the Bureau), the statutory body charged with the responsibility of privatising government-owned companies
has been battling to ensure that ALSCON becomes operational, some others have been using the judiciary to scuttle those efforts. In fact, for more than 17 years, legal entanglements have frustrated these efforts of the Bureau.
In 2019, just when it looked like the Bureau was making some headway, a Federal High Court sitting in Abuja and presided over by Justice A.I. Chikere ordered the committal to prison of the Director General of BPE, Mr. Alex A. Okoh, on the allegation that “BPE failed to fully execute the judgment of the Supreme Court of Nigeria and the Court of Appeal in the matter of BFIG V. BPE”. And curiously, the Court of Appeal in January 2022 affirmed that decision.
In 2004, the Federal Government commenced the process to privatise ALSCON by way of a Core Investor Sale. Following the evaluation of technical bids, two companies, RUSAL and BFI Group were pre-qualified for the financial bid opening. BFI Group then emerged as the preferred bidder with a bid sum of USD 410 Million.
Surprisingly, BFI Group failed to pay the initial deposit of US$41m, being 10 percent of the bid price, within 15 days in line with the financial bid terms. Thereafter, the Bureau terminated the transaction. This prompted a comprehensive review of the privatization process in order to address all the pertinent issues. Subsequently, the National Council on Privatisation adopted the willing seller/willing buyer strategy as set out in the Public Enterprises (Privatisation and Commercialisation) Act. NCP then constituted a committee to negotiate with RUSAL. Upon conclusion of the negotiations, the Bureau entered into a Share Sale Agreement (SPA) with RUSAL in 2007.
BFI Group, based on its claim that the period for the payment of the initial deposit had not expired before the revocation of its offer, took its grievance to court. Although unsuccessful at both the Federal High Court and Court of Appeal, The Supreme Court in a ruling delivered on July 6, 2012 upturned the decisions of the two lower Courts and ordered the BPE to provide the mutually agreed Share Purchase Agreement for execution by BFI Group and BPE; and to accept payment of the 10 percent of the bid price within 15 days from signing the SPA and the balance of 90% within 90 calendar days.
Although the judgment was somewhat strange, given the fact that it was BFI Group that breached the agreement by failing to pay the 10 percent of the bid price within the stipulated 15 days, BPE still went ahead and obeyed the Supreme Court’s judgment as the highest Court in Nigeria. Between September 7, 2012 and October 8, 2013, BPE informed BFI Group of its reinstatement as the preferred bidder and forwarded the draft SPA to the company for its review and comments.
A company which is genuinely interested in taking what it believes is theirs and revamping ALSCON and which was offered such a glorious chance would have jumped at that opportunity to make up for its initial failings and lapses. But not BFI Group. Instead, the transaction was frustrated by BFI Group’s non-compliance with the terms of the judgment, mainly, by trying to re-negotiate the bid price and other terms of the Share Purchase Agreement. Once again, BFI Group failed to make payment for the asset leading to BPE’s cancellation of the transaction with BFI Group for a second time.
Playing the dog in the manger, instead of cutting its losses or perhaps still playing out the script of its powerful sponsors, BFI Group initiated another suit against the Bureau, this time at the Federal High Court in Abuja. On September 30, 2014, Justice Abdu-Kafarati delivered judgment in favour of BFI Group. The Bureau appealed the judgment. The Court of Appeal in
