ALSCON: BFIG Writes Fayemi, Threatens Legal Action Over Rusal Takeover
1 week ago Admin 0
BFIGroup has threatened legal actions against the Minister of Mines & Steel Development, Kayode Fayemi, and the Director-General, Bureau for Public Enterprises, BPE, Alex Okoh, over their continued defiance of the Supreme Court’s ruling on the Aluminium Smelter Company of Nigeria, ALSCON, Ikot Abasi.
The Executive Vice President/General Counsel of BFIG, Jimmie Williams, wrote to Messrs. Fayemi and Okoh alleging “extreme injurious falsehood” concerning their recent announcement of the signing of a fresh agreement with UC RUSAL to take over the plant.
On Sunday, January 21, 2018, Mr Fayemi announced the signing of a “renewed Share Purchase Agreement, SPA” between BPE and the Russians over takeover plans expected to become effective in six months’ time.
The Minister’s spokesperson, Olayinka Oyebode, who issued the statement said the new agreement was signed by Mr. Okoh and the Chief Executive Officer/member, Board of Directors of UC RUSAL, Vladislav Soloviev, in Mr. Fayemi’s office.
Mr. Oyebode said other witnesses included the Minister of State in the ministry, Abubakar Bwari; Russian Ambassador to Nigeria, Nickolai Udovichenko; Managing Director of ALSCON, Dimitry Zavyaiov, and Head of Legal, UC RUSAL, Piter Maxsimov.
He said the agreement followed the approval of an out of court settlement of the lingering dispute over the ownership of ALSCON by the National Council on Privatization, NCP during its meeting of August 2017 chaired by the Vice President, Yemi Osinbajo.
In announcing the new agreement, Mr. Oyebode said the exercise “ends a decade of a legal tussle with BFIG over the ownership of ALSCON.”
BFIG Counsel writes Fayemi, Okoh
But, in a letter on Wednesday, February 7, to both the Minister and BPE DG, Mr. Williams denied the Minister and BPE DG negotiated any mediated resolution of its outstanding disputes over ALSCON. He described their roles in the latest agreement signing as “extremely disrespectful and disturbing.”
During the agreement signing, the Minister was quoted as saying the Russians were “best placed to reactivate ALSCON”, while BPE DG reportedly commended him for his “commitment to ensure the success of the negotiation with the Russians.”
“As you are both well aware, there has not been any settlement involving ALSCON,” Mr. Williams said in his letter titled: “Publications of Injurious Falsehoods Against BFIGroup Corporation Concerning the Aluminum Smelter Company of Nigeria (“ALSCON”) Share/Sale Purchase Agreement.”
“Our (BFIG) litigation over the enforcement of the Supreme Court’s order is continuing, and the Minister has not negotiated any mediated resolution of our outstanding disputes,” he added.
He urged the Minister and the BPE DG to immediately retract their statements. Mr. Williams warned of serious legal consequences if they fail to do so. He noted that their “continued unimpeded publications of these false reports are extremely injurious” to BFIG.
“Please be respectfully advised that we will resort to additional legal processes, if we do not receive a positive response to our requests,” the BFIG counsel threatened.
No SPA to BFIG
In 2004, BFIG had emerged the preferred bidder for ALSCON with an offer of $410 million following the disqualification of UC RUSAL by NCP for submitting a conditional bid in defiance of the bid guidelines.
In line with the guidelines, a payment schedule approved during the May 20, 2004 pre-bid technical meeting of all parties was to apply. The preferred bidder to pay the initial 10 per cent of the bid price 15 working days after the signing of the SPA with BPE.
But, in the June 17, 2004, letter by BPE to BFIG, the privatization agency unilaterally altered the agreed payment schedule by demanding the initial 10 per cent of the bid price to be paid within “15 days of the receipt of the letter of notification as bid winner.”
BFIG said it sought for clarification from BPE on the discrepancy and was ignored. On July 9, 2004, BPE announced the disqualification of BFIG as the preferred bidder, alleging an inability to pay for the initial bid price before the deadline.
BFIG went to court to enforce its contractual rights after BPE opened negotiations with UC RUSAL on terms to hand over ALSCON.
The case went all the way to the Supreme Court. On July 6, 2012, the sale of ALSCON to UC RUSAL was revoked and BFIG reinstated as the valid preferred bidder for ALSCON.
In its ruling, the Supreme Court issued “an order of specific performance” directing BPE to provide the mutually agreed SPA of May 2004 for execution to enable BFIG to pay 10% of the accepted bid price within 15 working days from the date of execution of SPA. The 90% balance was to be paid within 90 calendar days.
Apart from an order compelling BPE to accept payment of the 10% of the bid price from BFIG, the court gave a restraining order on the agency from inviting any further bidding for the sale and acquisition of ALSCON.
On October 8, 2012, ostensibly to carry out the Supreme Court order, BFIG said BPE sent to it a proposed 58-page SPA for review and approval pending execution.
The document covered a list of 17 key items, including financial statements, post-acquisition plan, liabilities, assets, gas sales and purchase agreements.
On October 24, 2012, BFIG said it revised and returned to BPE the SPA and requested for a meeting to discuss the details. BFIG said BPE ignored its request.
Rather, on January 29, 2013, BFIG said BPE sent an offer letter to “Purchase 77.5 per cent shares of the ALUMINIUM ‘SHELTER’ COMPANY OF NIGERIA, ALSCON, instead of ALUMINIUM ‘SMELTER’ COMPANY OF NIGERIA, ALSCON.
BFIG said the letter was accompanied by a 16-page SPA and not the one it reviewed and returned to BPE earlier.
BFIG said the attempt to execute the SPA was stalemated, as it was not interested in acquiring the shares of the ‘ALUMINIUM SHELTER COMPANY OF NIGERIA’.
Frustrated, BFIG said on February 13, 2013, it decided to sign and return to BPE the copy of the SPA it has earlier reviewed in line with the Supreme Court order. But, BPE’s refused to countersign.
BFIG filed an enforcement action at the Federal High Court, Abuja to compel BPE to fully comply with the Supreme Court order.
On September 30, 2014, Justice Abdu-Kafarati ruled that BPE should “forthwith take full control and possession of ALSCON from anybody, including UC RUSAL et al. and prepare same for handover/transfer to (BFIG).” But, BPE ignored the order.
In 2015, Dayson Holdings Limited, the special purpose vehicle used by the Russians to bid for ALSCON, filed an appeal seeking an injunction to restrain the enforcement of the judgment.
Although the injunction was granted, Dayson was given seven days to file its processes. But, it abandoned the case, thus foreclosing any attempt to sign any SPA until it was vacated.
Fayemi’s defiant posturing
In April 2017, Mr. Fayemi visited ALSCON based on the misinformation by BPE that BFIG failed to sign the SPA because “it was broke.”
During the visit, Mr. Fayemi assured the Russians of government’s commitment to “free the complex of any encumbrances”, regardless of the pending Supreme Court rulings.
Although the Minister made efforts to get an out of court settlement over the crisis, BFIG said such efforts ignored the terms and conditions ordered by the Supreme Court.
For instance, BFIG Chief Executive, Rueben Jaja, said on August 2017 he was invited to a meeting Mr. Fayemi presided, with Mr. Okoh, and other officials in attendance.
During the meeting, Mr. Jaja said Danba & Associates Limited, led by its Chairman/CEO, Saadina Dantata, who claimed to be UC RUSAL’s agent, presented a proposal for BFIG to accept to relinquish its legal rights to ALSCON on the strength of the Supreme Court ruling of July 6, 2012.
Mr. Jaja said BFIG rejected the proposal and offered to refund to UC RUSAL what it paid for ALSCON as a condition to signing the SPA. He said the Minister rejected the offer.
On August 28, Mr. Jaja said the group later sent through Mr. Okoh an offer of $35 million, consisting $20 million initial payment, plus another $10 million spread over 20 years “in the spirit of an amicable settlement.”
Sanctity of Supreme Court ruling reaffirmed
On November 8, 2017, Justice Jude Okeke of the High Court of the Federal Capital Territory, Maitama ruled in the case filed against UC RUSAL for interfering in its contract with BPE reaffirming the sanctity of the Supreme Court order of July 6, 2012 as the most viable option to resolve the lingering crisis over the sale of the ALSCON.
Following the ruling, BFIG said Dayson holding returned to the Court of Appeal, Abuja to file legal processes to reactivate the request for an injunction it abandoned in 2015.
But, BFIG said 48 hours to the Court of Appeal ruling on the application by Dayson on Tuesday, January 23, 2018, BPE decided to sign the renewed SPA with UC RUSAL to pre-empt the court’s decision.
In his ruling, Justice A. D. Yahaya chided BPE and its allies over their “continuous attempt to frustrate a specific and clear order of the Supreme Court to execute its judgment.”
Consequently, Justice Yahaya vacated all injunctions that constituted a restraint to the enforcement of the Supreme Court’s ruling on ALSCON.
Minister, BPE keep mum
When PREMIUM TIMES contacted the Minister for his comments on the threat by BFIG over the controversial agreement with the Russians, he did not respond to emails and text messages sent to him on Thursday.
But, his spokesperson, Mr. Oyebode sent a short response urging the reporter to direct his enquiries to BPE.
“Thanks for your enquiry. You may wish to get across to BPE for further enquiries on the transaction,” Mr. Oyebode said.
The BPE DG did not equally respond to emails and text messages sent to him. But, BPE spokesperson, Emeka Anwoh, promised to send a response initially by 11 a.m. on Friday after conferring with his principal on the issue. But, by the time of publication of this report by 11 p.m. he was yet to send the response.