Emmanuel Ujah, Emma Aziken and Victor Ahiuma-Young
18 February 2008
Lagos — CORE investors in the Nigerian Telecommunications and Mtel, Transnational Corporation (Transcorp), regretted, yesterday, Saturday's revocation, by the Federal Government, of its buying of NITEL/Mtel.
The Senate Committee on Privatisation also deplored the cancellation, but was hailed by the Nigeria Labour Congress (NLC) which also asked government to institute a probe to unveil those who wrecked the company, and bring them to book.
Transcorp in a statement said the revocation came at a time it was about achieving the revitalisation of the two companies.
It said: "Transcorp is now in receipt of a letter signed by the Honourable Minister of Information and Communications stating that the Federal Government has reversed the sale of both NITEL and Mtel.
"Ironically, the purported reversal comes at a very crucial period in the actualisation of Transcorp's efforts at revitalising both organisations. Among other initiatives, Transcorp had indeed identified and reached final stages in negotiation with potential technical partners.
"It is pleasing to note that the present Federal Government prides itself significantly on upholding due process and the rule of law both of which Transcorp Plc also intends to follow in this instance.
"We want to assure you that we are doing everything within our power to protect your investment. We are certain of an amicable settlement of this challenge in our favour," the Transcorp's spokesman said.
Transcorp said more definitive position of the organisation would soon be made public, particularly to assuage concerns of its numerous stakeholders.
Efforts to get the reaction of the Bureau of Public Enterprises, the privatisation agency of the government, did not yield any fruit as its spokesman, Mr. Chigbo Anichebe, could not be reached on phone.
Senate C'ttee criticises govt
The Senate Committee on Privatisation, however, criticised the reversal of the sale of NITEL to Transcorp and warned that the development could stall the nation's quest for foreign direct investment.
The Senate Committee on Communication is itself meeting today to deliberate on the matter which it said came to it by surprise.
Senator Ayo Arise, chairman of the Senate Committee on Privatisation, said government's action was against acceptable international standards on privatisation and that the action came despite agreements reached between government and Transcorp on the reversal of the dwindling fortunes of NITEL, the nation's first national carrier.
"I want to read the details and talk with the minister and see what are the justifications for this action at this time. If the rules were not followed, we (Senate) may have to look at the privatisation law and amend it," Senator Arise said yesterday.
"I have no doubt that with the reversal, government may be compelled to pay back the money Transcorp paid to acquire NITEL," the Committee chairman said.
"You can't just take such decisions without following acceptable norms and standards worldwide. If you have 49 percent stake in a company and another person has 51 percent, you can't just reverse the sale, how do you defend that?" he asked.
Senator Arise suggested that instead of an outright cancellation of the sale, government should have followed the process of buying back the telecommunication company from the new managers instead of violating the laws of the land.
In his own response, Senator Sylvester Anyanwu, chairman of the Senate Committee on Communications, said his Committee would be meeting today to review the development.
"I am being told that the Federal Government has not put in one dime into the operations of NITEL to justify its 49 per cent equity in the company. I am going to talk with the minister, the NCC and other stakeholders," he said.
NLC calls for probe
On its part, the Nigeria Labour Congress (NLC) described government's action as a welcome development and asked it to institute a probe panel to unveil those who contributed in one way or the other to wrecking the telecommunications giant with a view to bringing them to book.
In a telephone chat with Vanguard, General Secretary of NLC, Comrade John Odah, asked President Umaru Yar'Adua to re-organise NITEL and Mtel to become profitable like other GSM companies.
He lamented that with all the facilities at the disposal of NITEL\Mtel, the telecommunications giant was sold to cronies and fronts of people in government.
His words: "This latest revocation has further confirmed what we have been saying and agitating about that what passed as privatisation in the last nine years is just a mockery of the process and that what President Obasanjo did was to preside over the auctioning of our national assets.
"We at the NLC have argued over and again that certain assets of this country need not be privatised. That what is required is to appoint people of integrity to run them earnestly to contribute to the productive potentials of the nation.
To the extent that this government has found the need to review some of the controversial decisions of its predecessor, I think we have to commend the government for that. We urge the government to do more.
"Government must revisit the concessioning of Ajaokuta Steel Company, Aladja Steel, the Privatisation of the Aluminium Smelter Company at Ikot Abasi, the concessiong of the nation's ports, amongst others not to talk about National Theatre, Tafawa Balewa Square, Lagos International Trade Fair Complex, Eleme Petro-Chemical and others.
"So, the revocation of NITEL\Mtel is a welcome development. We hope that the government would go further to institute a probe panel to unearth all those who were responsible for bringing the telecommunications giant to its knees.
We can see from the MTN, GLO and other GSM operators that the telecommunication sector is a money spinning machine and with all the infrastructure NITEL\Mtel has at its disposal, it ought to be a leader in the industry. But people deliberately wrecked it for personal gains," he said.
The Federal Government had on Saturday reversed the sale of NITEL and Mtel to Transcorp following complaints arising from the sale as well as the failure of Transcorp to achieve the objectives of the privatisation guidelines.
The NITEL transaction with Transcorp had been trailed by controversies since it took effect in July 2006. Some people criticised the $750 million price for its 75 per cent stake as being too low.
It was learnt that the investors on the other hand considered NITEL not worth the price paid as there were issues of due diligence not properly conducted by its advisers.
Its deal with British Telecom (BT) as Technical Partners also suffered set-backs which led to the termination of the contract.
If the Transcorp transaction fails, it would be the fourth time efforts to privatise the telecommunications giant would run into a hitch.
The story started with International Investors of London Limited (IILL) which offered $1.317 billion for 90 per cent of the stake in 2001 but failed to mobilise enough resources to pay.
The Pentescope's management contract for NITEL also failed. Another attempt to sell it to Orascom Telecoms in 2005 also failed due to the low offer of $256.53 million.
By the time NITEL was sold, it could no longer pay its staff. The sale proceeds had to be used to pay outstanding staff salary arrears and other severance package.
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