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The House of Representatives is investigating the sale of Delta Steel Company, which was valued at $700 million but sold for just $30 million
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BPE Director Gbeleyi revealed that GINL acquired 80% of DSC in 2005 under privatization, using its assets as loan collateral
The House of Representatives Committee on Public Assets has launched an investigation into the controversial sale and collapse of Delta Steel Company (DSC), Aladja, Warri, Delta State.
The committee, led by Hon. Ademorin Kuye, interrogated officials from the Bureau of Public Enterprises (BPE), Asset Management Corporation of Nigeria (AMCON), the Office of the Accountant General of the Federation (AGF), and the Ministry of Finance Incorporated (MoFI) over the alleged undervaluation of DSC’s sale.
The investigation follows a petition received by the House, alleging that a $700 million asset was sold for less than $30 million.
According to BPE Director-General, Ayodeji Ariyo Gbeleyi, the Federal Government’s privatisation policy led to the sale of 80% of DSC’s shares to Global Infrastructure Nigeria Ltd (GINL) in 2005, while the government retained 20%. Gbeleyi confirmed that GINL acquired 80% of DSC for just $30 million, despite the company’s valuation at $700 million.
He also revealed that residential buildings and plots of land belonging to DSC were later used to settle workers and pensioners.
The investigation uncovered that GINL used DSC assets as collateral to obtain a loan from Ecobank. However, due to loan default, AMCON acquired the DSC assets in 2015 and sold them to Premium Steel and Mines Ltd.
Gbeleyi criticized AMCON for failing to consult BPE before acquiring and reselling DSC’s assets, violating contractual agreements.
Meanwhile, petitioners, including the Association of Concerned Residents of DSC’s Camp 2, 4, and 5 estates, alleged harassment and intimidation by security personnel acting on behalf of AMCON and Premium Steel and Mines.
One of the petitioners, Dr. David Emomotimi, argued that the assets AMCON acquired were strictly those used as collateral for loans and did not include residential buildings.
A major controversy arose when petitioners claimed GINL’s loan from Ecobank was N250 million, yet AMCON allegedly inflated it to N7 billion.
BPE Director Gbeleyi admitted that the agency was aware of the Ecobank loan but unaware of loans from three other banks that AMCON cited as creditors.
AMCON’s legal representative, Chukwuemeka Umunakwu, stated that the agency acquired DSC’s assets for N22 billion and sold them to Premium Steel and Mines for N32 billion. However, the AGF’s representative, Kabiru Ademola (Director, Finance), said the federal government had only received N3 billion from BPE for the original sale to GINL.
Regarding the alleged N32 billion payment by AMCON to the federal government’s Treasury Single Account (TSA), the Central Bank of Nigeria (CBN) had not confirmed the transaction as of the committee’s last inquiry.
The Managing Director/CEO of the Ministry of Finance Incorporated (MoFI), Dr. Armstrong Takang, distanced the agency from the Delta Steel Company issue due to “numerous controversies.”
Takang expressed concern over the collapse of DSC and similar entities, stating:
If our forefathers, who were less exposed and educated, could build such infrastructure, why is it now difficult for contemporary leaders to maintain them? I wonder what the future holds for this country.
The House committee has ordered AMCON and Premium Steel and Mines to stop harassing DSC estate residents until the investigation is concluded.
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