Connect with us

Metro

Controversy trails sale of Aladja Steel to Vaswani

Published

on

A recent report that the Delta Steel Plc, Aladja, Delta State has been sold to Premium Steel and Mines, a company owned by billionaire businessman, Sunil Vaswani, has generated controversy as there are allegations that the company was sold to him for a far lesser price than was offered by another prospective buyer.

A Senior Advocate of Nigeria (SAN) Chief Ajibola Aribisala (SAN), who was appointed the receiver/manager of the company by the Asset Management Corporation of Nigeria (AMCON), on Friday urged President Muhammadu Buhari to cancel the deal which, he said, was at a great loss to the country.

Aribisala said AMCON sold the company for N28billion as against the N33billion offered by a Chinese company, China Polaris Technologies Company Ltd, which was ready to pay the total sum at once.

The lawyer said Vaswani offered to pay 10 per cent of the sale before 30 days after offer’s acceptance and spread the balance over eight years, with a moratorium of one year. He added that it was his refusal to accept the Vaswani offer that led AMCON to announce the termination of his company’s appointment as receiver/manager.

A legal battle is ongoing over AMCON’s termination of the SAN’s contract, it was learnt.

Vaswani initially offered to buy the company with West African Mines and Steel Limited before eventually buying it with Premium Steel and Mines Limited. The receiver/manager at the time Premium Steel bought the company was Dr. Joseph Nwobike, SAN.

Premium Steel and Mines Ltd was incorporated on December 15, last year. West African Mines & Steel Ltd was incorporated on May 3, 2013.

Aribisala added: “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.

“The essence of AMCON’s acquisition of bad debts from commercial banks, along with the collateral securities, is to confer on AMCON the assurance that in the event of failure of the borrower, in the case Delta Steel Company Plc, to discharge the indebtedness, AMCON can fall back on the pledged securities to recover the indebtedness by virtue of section 34 of the Asset Management Corporation Act.

According to him, the sale “amounts to an economic sabotage or economic crime since the proceeds of sale, which is quite below the sum of N33billion 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 N33billion, 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 claimed.

The Presidency, it was learnt, is already looking into the petition on the sale.

Ripples…without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now