Saturday, February 09, 2008
Gbenga Obasanjo indicted in $200 million fraud
The report of an administrative panel of enquiry into the operations of Ajaokuta Steel Company(ASCL), National Iron Ore Mining Company (NIOMCO) and Delta Steel Company (DSC) has indicted Global Infrastructure Holdings Limited (GIHL), a company believed to be partly owned by Dr Olugbenga Obasanjo, the controversial son of former President Olusegun Obasanjo.
GIHL was granted a concession to manage the three companies in August 2004 following the failure of SOLGAS, the first concessionaire, to meet the target in the agreement it signed with the Federal government in a privatisation programme supervised by Gbenga's father.
The report of the five-man panel submitted to the steel minister, Chief Tunji Sarafa Ishola, said GIHL failed to deliver on the terms of the concession agreement, instead it used the companies to secure loans without corresponding investments.
According to the committee, the N24 billion secured from Zenith, Ecobank, UBA, FBN, Oceanic, FCMB, Bank PHB and Sterling Bank went into private pockets.
The report expantiates: "As at November 15, 2007, the aggregate borrowings from the Nigerian banks is a little over N24billion. These borrowings are allegedly secured with the assets of Delta Steel Company. BPE confirmed that there has been no board approvals for any of these borrowings and for the assets of DSC to be used as collateral for ASCL and NIOMCO. The figure (N24billion) supplied by the finance director of the GIHL could be more considering the interest of about 14% per annum. One is therefore forced to ask what happened to the funds borrowed."
The report further found innumerable cases of diversion of value from the ASCL to either DSL or outrightly sold abroad for cash. The bottomline, the panel said, is that ASCL is gradually being crippled while GIHL's interest is being buoyed in Nigeria and overseas.
"On the resumption of GIHL management at the ASCL and NIOMCO, processed iron ore stored at ASCL were carted away to Warri and sold to interested groups overseas."
Sales of the said processed iron ore had continued for a while before the Monitoring Committee assessed what was left at a little over $2, 077, 545, 00. GIHL paid about $1, 000, 000 and just a week into the life of this panel the processed iron ore should not have been sold in the first place. It is a vital raw material for production at ASCL.
"Mention has been made of the issue of Essential Premium Scraps needed by ASCL which Global carted away to DSC. These scraps are worth N203,371,260.27 at today's prices. This money is yet to be paid to FGN. The scrap should not have been sold because ultimately ASCL will need to import similar premium scraps at a higher price sooner or later."
The panel chaired by Magaji Inuwa called for a review of the approval given to GIHL by the National Office for Technology Acquisition and Development (NOTAP).
One of the ways the firm claims to have spent money on Ajaokuta is through technology transfer. GIHL has transferred US $17,356,896.02 using NOTAP approvals.
In order to ensure that it does not part with a penny on the Ajaokuta deal, GIHL, in concert with its Nigerian sponsors, came up with a report that put the value of the Ajaokuta Steel Company at a paltry $300 million.
The company also submitted a letter to BPE, another report that says it has spent the sum of $250 million on the Ajaokuta Steel Company since August 2004 when it took over the management of the Nigerian steel giant.
With the $250 million expenditure it submitted and which it claims to have spent, GIHL maintained it had already spent far more than it was expected to pay for the 60 percent share of the company it is targeting in the privatisation deal.
By its claim, GSHL would not only take Ajaokuta free of charge, it would also expect the government to make a refund of some millions of dollars to it, being the excess of what it claimed it had invested.
But the report deflated this claim by the Indian firm, saying "We requested for evidence of this massive investment but GIHL could not substantiate this except for a list of spare parts and consumables bought and cleared by DSC."
Another startling revelation of the panel is that since GIHL took over the running of Ajaokuta Steel Company, it has not paid the salaries of workers regularly. This has led to several industrial disputes between the management and workers of the establishment.
GIHL owes both the Russian and Ukrainian experts working with them salary arrears for about a year.
Industrial actions embarked upon by workers has resulted to the stoppage of rolling activities at the steel plant.
Other members of the committee are Ibrahim Abba Gubio, Emma Nwadi Eke, Vincent Odafen and Kunle Bolujoko.
Did I hear someone say like father, like son?