Onwuka Nzeshi
5 October 2008
Abuja — Indian steel conglomerate, Global Infrastructure Limited (GINL) yesterday threatened to seek legal redress over the abrupt revocation of its management contract in respect of the Ajaokuta Steel Company (ASCL) concessioned to it during the tenure of former President Olusegun Obasanjo.
The firm, which is also the core investor in Delta Steel Company (DSC), Ovwian-Aladja, is worried that despite its efforts in the revitalisation of the steel sector in the country, the concession of Ajaokuta was not only terminated, but attempts were being made by some public officials to smear its image.
Global Infrastructure, in a statement in Abuja, said whereas it responded to the need of Nigeria for foreign investors to contribute to the growth of the country's economy, it was being paid back in the wrong coin.
Managing Director, Delta Steel Company, Mr. Sam Nwabuokei, who endorsed the statement on behalf of Global Infrastructure, said although GINL had taken the 'unjust' termination of its concession to the International Arbitration Court in London, it might also be compelled to seek legal redress in a Nigerian court over "the series" of allegations being levelled against its corporate entity.
Chairman of the Interim Management Committee on Ajaokuta Steel Company and the National Iron Ore Mining Company NIOMCO, Itakpe, Mr. Phillip Umunnakwe, had, while addressing a press conference last week, said that GINL borrowed about N23bn from Nigerian banks on behalf of the Steel Company while it managed its affairs under a concession agreement with the Federal Government.
But Nwabuokei debunked the allegations and described them as "complete false."
"GINL did not borrow any money, not even a Kobo from Nigerian banks on behalf of the Ajaokuta Steel Company. GINL borrowed money from Nigerian banks on behalf of Delta Steel Company (DSC) which was privatised to GINL and these were borrowed in line with laid down procedures and as empowered by the content of the agreement.
"As verifiable from the banks, the loans are being serviced in-spite of imposed conditions," Nwabuokei stated.
Nwabuokei urged the Federal Government to investigate the veracity or otherwise of the allegations which the Interim Management Committee of ASCL under Umunnakwe levelled against it.
He described the actions and utterances of the Interim Management Committee as double standards, alleging that it was Umunnakwe, who approved all items GINL "borrowed" from Ajaokuta Steel Company to fix the Delta Steel Company.
"Umunnakwe was the chairman of the Monitoring Committee set up by the Federal Government through the Ministry of Mines and Steel Development to supervise the execution of the concession agreement on Ajaokuta and NIOMCO.
The GINL was therefore under the direct supervision of the Monitoring Committee headed by Umunnakwe from the beginning in 2005 to April 2008 when the concession was terminated before he was appointed to head the Interim Management Committee. GINL has in possession, recommendations of Umunnakwe's Committee to the Federal Government in which he praised the efforts of GINL on Ajaokuta and NIOMCO before the termination of the concession.
"GINL wishes to tell the Federal Government, the Nigerian people and indeed the world that Umunnakwe approved every single item GINL moved from Ajaokuta to Delta Steel Company Aladja. In the course of the execution of the concession agreement, there was an urgent need to replace some materials at Delta Steel Company which was then privatised to GINL.
"A procedure of borrowing materials from either of the companies to the other was drawn by the Ministry of Mines and Steel Development and required that GINL obtain approval from the Monitoring Committee before any item is borrowed.
"On each of the occasions where GINL removed any material from Ajaokuta to DSC, GINL obtained written approval from Umunnakwe, chairman of the monitoring committee which was the bridge between GINL and the Federal Government. The items so borrowed were meant to be replaced in the course of the execution of the concession, if the Federal Government had not been misled into terminating the agreement and there are documents to this effect," Nwabuokei stated.
In reaction to another allegation that the GINL paid $21 per ton of Iron Ore concentrate against the prevailing market price, Nwabuokei explained that at the time GINL bought the material for use at DSC and Ajaokuta, the market price of iron ore was below the amount but Global chose to pay $21 as against the prevailing market price which was a risk at that time.
The GINL also denied that it owed workers of the company three months salaries before the Federal Government terminated the concession agreement.
"It may also be necessary to recall that workers of Ajaokuta were in over six months salary arrears when GINL took over the place and had to clear all the arrears immediately even before moving to site.
"As earlier stated, GINL does not wish to join issues with its accusers who ganged up to mislead the Federal Government to terminate a concession agreement after GINL has successfully rehabilitated two major Nigerian Steel Companies that have been idle for over 25 years. However, it has become necessary to make the following statements so as to correct the erroneous impressions and distortions presently being generated by the IMC in the print and electronic media.
"What is most painful today is that Ajaokuta Steel Company has gone so bad again; and neither Umunnakwe's Interim Management Committee nor any of those politicians who call themselves experts in the steel sector, can even operate the plant and maintain skeletal services.
"Rather, all the sections of the plant have been shut down and over grown with weeds. The few futile attempts made by them to start the plants have resulted in the damage of equipment and the workers suffer months of hunger due to none payment of their salaries.
"GINL would be compelled to take legal action against Umunnakwe unless he retracts all the falsehood he has shamelessly peddled before the Nigerian media, and within a reasonable time," the company stated.
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