By Adurodija Ebenezer
After discovering an abundance of limestone, iron ore, and mineral resources, the main ingredients in the production of cement, in 1999, the administration of Prince Abubakar Audu felt the need to construct a Cement Company at (Obajana) Kogi State.
The limestone deposits in Obajana were excess in abundance, enough to even last up to 100 years. Thus, Kogi State Government after carrying out technical feasibility studies, put in place the processes for the establishment of Obajana Cement Company.
The then Governor of the State, Prince Abubakar Audu did all he could to ensure that the company took off. Government established in 1992 the Obajana Cement Company with the Certificate of Incorporation Number RC 208767 dated 4th November 1992. The company was solely owned by the State Government. The company also has exclusive prospecting right; number PR no. 14 of 2001, No 0053. The Federal Ministry of Solid Minerals Development in 2002 approved the exclusive prospecting license No. EPL/17087/19 to the company.
Because of the long time it would take for Obajana to start full cement production, the Kogi government established an MOU (Memorandum of Understanding) with another company and considered importing cements to Kogi for the time being.
Suffice to say, around May 2002, Aliko Dangote paid a visit to Prince Abubakar Audu when he showed interested in partnering with the State Government in the venture. Prince Audu referred him to his Deputy Governor, then Chief Patrick Adaba for further discussion.
Aliko Dangote later wrote to the Ministry of Commerce and demanded for the feasibility study of the one Kogi State Government paid $250,000 for. He now used that study to conduct a different feasibility study on the said project. He then told the State Government he’s willing to partner but that he will use his own feasibility study.
In an agreement signed on the 30 July 2002, between the State Government and Dangote Industries Limited (DIL) 90% of the equity shares of the company was transferred to DIL, while the remaining N50 million share composition (10%) of the entire sum, which was agreed that 5% be paid to the State Government and 5% to the citizens was retained by the State.
In a supplementary agreement on the 14th day of February 2003, 100% equity was transferred to DIL with a proviso that indigenes of the State be offered 5% equity within 5 years of the company take off and stabilization while the State equity share may be bought back by the State.
It is also very important to note that in 2006, the State Government on behalf of Obajana Cement Plc took a loan of N63 billion naira from First Trustees Nigeria Limited which was deployed into the company.
MATTERS ARISING:
1) How much did DIL paid for the initial 90% equity shares. Who was it paid to?
2) What necessitated the transfer of the remaining equity shares of 10% and how much was paid by DIL.
3) If by 2003, DIL has taken total control of the company, why would Kogi State Government procure a facility of N63 billion on behalf of Obajana Cement Company in 2006.
4) Going by available Certificates of Occupancy’s terms, DIL is expected to pay an annual ground rent of N95,782,600.00 from 2015 till date to the State Government. Has DIL paid any, if yes how much?
WHY NOW
The actions of Kogi State Government under the leadership of His Excellency Alhaji Yahaya Bello to unravel this mystery has attracted a lot of actions. Some queries the need for the actions, while many others hailed the actions of government as an idea whose time has come.
Suffice to say that given the above four posers, any rights thinking administration that has the love of the people of Kogi State at heart would do the needful as the transactions lack logic and sound reasoning. The Kogi State Government in announcing its determination to reclaim the Obajana Cement Plc from Dangote Industries Limited, stressed that Cement Company was illegally acquired.
Governor Yahaya Bello said he has taken the bold step, in line with his mandate to safeguard the lives and livelihood of the people of Kogi State, including residents, and to ensure their wellbeing.
He said this was also coming on the heels of protests by the people of the State who felt they had been suppressed and marginalised by the Dangote Group who had come to rip them off.
The Governor, however, said that the State was open to discussions once Dangote company Plc is ready to come clean.
“We received several petitions from the general public over this particular subject matter. In the past five to six years, all efforts to sit with the proprietors of the Dangote Conglomerate failed.
“We set up a Committee to investigate this and invited the Dangote company to discuss with them and tell them the imminent dangers they are exposing the people to, but it all fell on deaf ears.
“I am here to defend my people, and from all reports, it is clear that Obajana Cement Company does not belong to Dangote,” Governor Bello declared.
Presenting the report to the public, the Secretary to the State Government, Dr. (Mrs) Folashade Ayoade revealed with documents that the purported transfer of Obajana to Dangote Industries Limited, was “invalid, null and void”.
Ayoade disclosed in the report that three Certificates of Occupancy for Obajana Cement Company Plc, which was solely owned by the Kogi State Government at the time, were used to obtain a loan of N63billion by Dangote.
According to her, the Committee, in view of its findings, has therefore recommended that Kogi State should take steps to recover Obajana Cement Company from the Dangote Group.
The Committee also recommended that: “Kogi State Government should take steps to recover all accrued dividends from profits made over the years, including accrued interest on same.
“Kogi State Government should take steps to cancel the existing seven Certificates of Occupancy in the name of Dangote Cement Company.”
Stressing the aberration in the arrangement, the SSG said, “Agreement between Kogi State Government of Nigeria and Dangote Industries Limited, dated 30th July 2002 and supplemental agreement dated 14th February 2003, as contained in Exhibit 71 of the Judicial Commission of Inquiry Report, purporting the transfer of Obajana Cement Company Plc to Dangote Industries Limited, are all invalid, null and void.
“There is no evidence of consideration paid by Dangote Industries Limited to Kogi State Government from the alleged transfer of Obajana Cement Company Plc and no dividend was paid to the State from the profits realised from the inception of Dangote Cement Company Plc to date.
“By the assignment of the three Certificates of Occupancy, the title in Obajana Cement Company Plc, still vests in Kogi State Government as the sole owner. The three documents were used to obtain a loan of sixty-three billion naira only (63,000,000,000.00) to finance the construction of the cement plant in Obajana.
Speaker of the Kogi State House of Assembly, Matthew Kolawole, specifically noted that the acquisition of the Obajana Cement Company by Dangote was without the resolution of the House of Assembly, which made the process null and void.
“It is clear that you cannot sell a State Government property of any form without the resolution of the Kogi State House of Assembly.
“All the transfer process of the share capital to Dangote from Obajana by the previous administrations was without any law backing it by the State House of Assembly,” Kolawole stated.
In his contribution, Dr. Moses Wokili, 2011 ANPP Deputy Governor candidate to the late Prince Abubakar Audu said “I heard my loved principal complaining about the non-compliance of the Dangote Cement to the agreement reached with the Kogi State government. I can vividly remember just a few of his complaints: (i) a certain cadre of workers should be reserved for only Kogi indigenes (ii) a reasonable percentage of senior positions were to be occupied by Kogites who possess the necessary qualifications (iii) a Kogite was to serve as a director of the company representing the State. He promised that he would make sure the anomalies, among others, were corrected if he came back as the State Governor.
However, I did not ask him whether these observed anomalies started during or after the period he served as the Governor”.
He disclosed that from his research as a UK postgraduate student in Cardiff studying management, Obajana Cement Plc made Aliko Dangote the richest man in Africa and is the foundation of his fame as a world business leader. He regretted that this world-class business enterprise is in a pauperized environment where the local communities lacked the basic necessities of life, in addition to being exposed to environmental pollution and degradation.
He said the State Government in their explanation, went deeper to question the validity of Dangote’s ownership claim to the cement factory. “As a lawyer (not a barrister) with an LLM degree in commercial law, a contractual agreement, as in this instance, automatically becomes null and void, when the main beneficiary party to the agreement breaches the contractual terms/preconditions especially when the terms are the pillars of the agreement unless, of course, the agreement contains specific penalties in case of a breach.
“If the allegations levied against Dangote by the State Government and the late Prince Abubakar Audu are correct, then, it is as good that no contract ever existed between Dangote and the State Government, hence, the automatic reversal to the status quo i.e Kogi State Government became the bonafide complete owner of the factory starting from the date the breach took place. To buttress the point, it is alleged that the transfer instrument of ownership is not recognised in law and by law. From the perspective of the analysis, I believe the State Government has taken the right step to recover the commonwealth of the people.
He urged the State Government to take further steps: (a) set up a Judicial Commission of Inquiry to dissect the instrument of transfer of ownership of the factory to Dangote, with particular reference to it its propriety, legality, terms-compliance by Dangote, and any acts of collusion by any past and present government officials bordering on corruption, and then for the commission to make the necessary recommendations based on justice and fairness to all the parties to the agreement. The factory should be recovered without fair or favour if the outcome of the inquiry so demands. Anyone no matter how highly placed, in any administration found to have gained from the deals, if any, should be made to refund the assets and monies in addition to being criminally prosecuted.
Indeed, Governor Yahaya Bello is on the path of history by fighting for justice for the Kogi People. It is our collective claim for a long-denied and illegally denied rights. It is a matter of our commonwealth. It is, therefore, very apt that we as a people join hands with the State Government to reclaim our company. For without doubt, Obajana Cement Plc. belongs to the great people of Kogi State.
