When the Olusegun Obasanjo government sold Obajana Cement to Aliko Dangote in 2002, the Kogi State government retained 10% of the equity in the company. The factory was to later become the largest cement asset in Dangote Cement, Nigeria’s largest listed manufacturing company. Now, the Kogi state Government is levelling serious allegations of impropriety against the company even going further to shut down the company’s locations in Kogi State.
The Kogi State House of Assembly claims that based on a recent investigation, no valid acquisition took place for the Obajana Cement Company. They premised this allegation on the fact that the state was not paid for its holdings in the company neither has it received any dividends for its 10% equity in the company now worth about 16.5billion dollars.
A state government official is alleged to have said that upon the so-called acquisition of the company, Dangote Cement was meant to pay the state government for its 10% equity but never did. What happened at the point of acquisition calls into question the nature of the transaction. It is believed that in a show of open corruption, the company paid the then governor, Prince Abubakar Audu, a tidy sum of money to turn the state’s face the other way and prevent Dangote from paying the state for its 10% equity in the factory. Then, the state also went ahead to grant Dangote access to all its assets including licenses for its coal mines within the state which were not part of the acquisition and from which coal used to power the factory is now being mined. These mines which Prince Audu transferred to Dangote were not a part of the acquisition of the cement company and also not part of the state’s 10% holdings. Whilst Dangote Cement continues to claim it has paid for the state’s equity, the company was unable to produce any valid document showing the transaction ever occurred or proof that it did. According to the panel, the company and its executives have instead rebuffed every attempt to appear before the State House of Assembly investigation panel over the past few months.
Now, the Yahaya Bello government is seeking reparations – both for the state’s 10% stake and its coal mines which are being exploited without any visible benefit to the state. The state insists that the transaction was never concluded since there is no documented evidence or financial transaction showing it ever received any payment for its equity stake in the company. “It is a shame that nothing has been gained by the state since the acquisition of the company – not from our mines which are still owned 100% by the state but now operated by Dangote Cement, nor for our 10% stake in the company which has been forcefully taken through fraudulent means. This is very bad and highly unethical for a company that is listed on the Nigerian exchange,” said the official under conditions of anonymity. The state governor, Yahaya Bello was later to appear at a press briefing where he said, said the late Kogi State governor, Abubakar Audu “was so visionary enough to establish, acquire mining license, acquire the C of O, invest, operate and run the Obajana Cement factory one hundred percent, before the coming of Dangote”.
When the Olusegun Obasanjo government sold Obajana Cement to Aliko Dangote in 2002, the Kogi State government retained 10% of the equity in the company. The factory was to later become the largest cement asset in Dangote Cement, Nigeria’s largest listed manufacturing company. Now, the Kogi state Government is levelling serious allegations of impropriety against the company even going further to shut down the company’s locations in Kogi State.
The Kogi State House of Assembly claims that based on a recent investigation, no valid acquisition took place for the Obajana Cement Company. They premised this allegation on the fact that the state was not paid for its holdings in the company neither has it received any dividends for its 10% equity in the company now worth about 16.5billion dollars.
A state government official is alleged to have said that upon the so-called acquisition of the company, Dangote Cement was meant to pay the state government for its 10% equity but never did. What happened at the point of acquisition calls into question the nature of the transaction. It is believed that in a show of open corruption, the company paid the then governor, Prince Abubakar Audu, a tidy sum of money to turn the state’s face the other way and prevent Dangote from paying the state for its 10% equity in the factory. Then, the state also went ahead to grant Dangote access to all its assets including licenses for its coal mines within the state which were not part of the acquisition and from which coal used to power the factory is now being mined. These mines which Prince Audu transferred to Dangote were not a part of the acquisition of the cement company and also not part of the state’s 10% holdings. Whilst Dangote Cement continues to claim it has paid for the state’s equity, the company was unable to produce any valid document showing the transaction ever occurred or proof that it did. According to the panel, the company and its executives have instead rebuffed every attempt to appear before the State House of Assembly investigation panel over the past few months.
Now, the Yahaya Bello government is seeking reparations – both for the state’s 10% stake and its coal mines which are being exploited without any visible benefit to the state. The state insists that the transaction was never concluded since there is no documented evidence or financial transaction showing it ever received any payment for its equity stake in the company. “It is a shame that nothing has been gained by the state since the acquisition of the company – not from our mines which are still owned 100% by the state but now operated by Dangote Cement, nor for our 10% stake in the company which has been forcefully taken through fraudulent means. This is very bad and highly unethical for a company that is listed on the Nigerian exchange,” said the official under conditions of anonymity. The state governor, Yahaya Bello was later to appear at a press briefing where he said, said the late Kogi State governor, Abubakar Audu “was so visionary enough to establish, acquire mining license, acquire the C of O, invest, operate and run the Obajana Cement factory one hundred percent, before the coming of Dangote”.
“We are not interested in shutting down Obajana Cement factory, purportedly said to be Dangote Cement factory,” Bello said. “If there is anything, we are wanting more of such to come to this state but they have failed to do what is right to resolve this matter in the interest of the citizens of the state.” “So far, according to the report before me, Obajana Cement factory does not belong to Dangote,” the governor said, adding that Dangote factory’s “exploration” is also causing environmental damage.
“We are not interested in shutting down Obajana Cement factory, purportedly said to be Dangote Cement factory,” Bello said. “If there is anything, we are wanting more of such to come to this state but they have failed to do what is right to resolve this matter in the interest of the citizens of the state.” “So far, according to the report before me, Obajana Cement factory does not belong to Dangote,” the governor said, adding that Dangote factory’s “exploration” is also causing environmental damage.
Kogi State has therefore requested that Dangote Cement pays to the coffers of the state, the equivalent of its equity which it has established was never paid or, or to invite independent valuers to determine the amount to be paid at today’s rate amounting to over $500million. It is also said that all the coal mines that were taken over by Dangote Cement in Kogi which belong to the state and worth billions of Naira, are presently not yielding any benefits for the state despite being exploited by the company for profit.
Further investigations have also now revealed that to resolve the issue, Dangote has sought the assistance of several bigwigs across the country to force the Governor Yahaya Bello administration to drop its action against the company but the governor is said to have refused to budge repeatedly informing them that the funds are not meant for him but for the state”. During the press conference held by the Governor, a visibly emotional Bello said the Kogi State government received “heaps of petitions” from the general public, about Dangote, and all efforts to sit down with its proprietor, Aliko, failed. According to him, all efforts by authorities in Kogi to make Dangote realise “the impending danger” fell on deaf ears.
Will there be any end to this anytime soon? It should be noted that Dangote is currently facing various pressures due to the non-completion of his refinery and petrochemicals complex and is facing a possible acquisition by oil majors as banks are currently unwilling to refinance the loans after previous refinancing efforts did not lead to the completion of the refinery on schedule.
Analysts believe this recent demand by the Kogi State government will add additional financial pressures on the company which it may be unable to pay anytime soon.
Watch the video of Governor Yahaya Bello’s press conference here.
Abubakar James writes from Lokoja
