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Ajaokuta, Delta Steel Concession: EFCC Swoops On Senior Officials

Source: huhuonline.com
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Huhuonline.com / can report that Nigeria's anti-graft agency, the Economic and Financial Crimes Commission (EFCC) has arrested four senior officials of Global Infrastructure Nigeria Limited (GINL), as part of its current probe of the concession of the moribund  Ajaokuta and Delta Steel firms.  

  Huhuonline.com investigation has proved that the EFCC is curious over the acquisition of Delta Steel Company, Aladja in Delta state, on May 5, 2005 by Global Steel Holdings Limited and its subsidiary, GINL, which incurred domestic debts of over N25billion. The firm is also said to be presently under the receivership of UBA and ECOBANK.  

  EFCC's probe and subsequent arrest of the senior officials, according to a dependable source, may not be unconnected the petition it received from one S.G. Kekere-Akpe on behalf of R.O. Egwere and O.J. Okari (representing disengaged staff of Delta Steel Company Limited).  

  Among those in the EFCC custody for onward interrogation, according to Huhuonline.com findings include the Managing Director (Joint), Dr. Sam N; Executive Director Operations, Sunil Bhandari; General Manager, Finance, Mukesh Agrawal; and Manager, Finance, Suhri Barve.  

  EFCC's Head of Media and Publicity, Mr. Femi Babafemi confirmed the arrest, saying that 'It is true we arrested some officials of GINL but investigation is on. At the appropriate time, you will hear from the commission on what our investigation has revealed.'  

  The petitioners, R.O. Egwere and O.J. Okari, had alleged that GINL violated the terms of acquisition of Delta Steel Company Limited and citing cases of conspiracy, economic sabotage and tax evasion as well as the diversion of public funds and money laundering.  

  The also alleged that GINL has used N182.168 bn assets and debentures of Delta Steel Company Limited as security to raise funds for Ajaokuta Steel Company Limited.  

  Huhuonline.com sources have disclosed that the petitions which were also made available to the Presidency may have stemmed from the fact that the terms of agreement for the acquisition of the steel firms with an anticipated one million jobs provision have been breached.  

  'The fact of the matter is that the GINL acquired substantial interest in Ajaokuta Steel Company Limited; Nigeria Iron Ore Mining Company Limited and Delta Steel Company Limited.  

  'By an agreement dated August 13, 2004, the Federal Government granted a concession for the rehabilitation, completion and commissioning of Ajaokuta Steel Company Limited for a period of 10 years to GINL and GSHL with a clause that the companies will provide 100 per cent financing  

  'On February 17, 2005, GSHL through its subsidiary (GINL) obtained concession on NIOMCO for 10 years.  

 
  'Also on May 5, 2005, the Bureau of Public Enterprises sold 176 million ordinary shares, representing 80 per cent of the Federal Government of Nigeria's share in Delta Steel Company Limited to GSHL and GINL.'  

  Our source further revealed that the near bankruptcy and indebtedness of GINL to several banks to the tune of N25billion in 2008 may have irked the Federal Government, even as the firm was said to have declared N940, 222 million in 2005 and N9.735billion in 2006 at Delta Steel Company Limited.  

  While it has been disclosed that GINL indebtedness to UBA alone, as at December 30, 2008, is N2, 042, 595.540.19 and $7.391m, a source close to GINL further revealed that 'There is a case in a court in the UK over the breakdown of concession agreement on the two firms between the Federal Government and GSHL/ GINL.  

  'We think the EFCC will await the decision of the UK court. The case has also assumed a diplomatic dimension because the Indian promoter of GSHL, Pramod Mittal is the younger sibling of a steel tycoon, L.M. Mittal and head of Global Steel Holdings Limited.  

  'The family has a reputation of reviving steel firms in the world. It is not a fraudulent family. I think something went wrong with the concession agreement.'  

  Meanwhile, a government source who spoke on grounds of anonymity has disclosed that, 'The government is worried that contrary to strict adherence to the post-acquisition programme of the Federal Government to revive the company by injecting Direct Foreign Investment and money, the suspects allegedly engaged in obtaining domestic loans from commercial banks resulting in the Delta Steel Company Limited's indebtedness to the sum of over N25billion.  

  'The same company privatized for efficiency is now under receivership. To compound the problem, it was discovered that in an effort to fulfil its obligation of 100 per cent financing of Ajaokuta Steel Company Limited, GSHL served as guarantor to GINL and used all assets and debentures of Delta Steel Company Limited of about N182.168b as security for the securing of various facilities.'