Kogi vs Dangote: Panel alleges improper transfer of Obajana ownership, non-payment of dividends

The Kogi state panel on the acquisition of the Obajana cement plant says the purported transfer of the facility to Dangote Cement was not “proper”.

Over the past few days, the Kogi government and Dangote Cement have been at loggerheads over the ownership of the plant.

On Wednesday, the cement plant was sealed off as a fallout of the ownership tussle.

The decision to shut down the facility elicited varied reactions and resulted in a controversy between the state government and the company.

Prior to the sealing off, the Kogi state government had established a technical committee on the evaluation of the legality of Dangote Cement’s acquisition.

The 10-member technical committee was led by Folashade Ayoade, secretary to the state government (SSG).

On Thursday, the committee submitted its report to the state government.

‘PURPORTED TRANSFER IMPROPER’

In the report seen by TheCable, the committee said the purported transfer of the plant to Dangote Cement was contained in documents of the agreement signed between 2002 and 2003.

During the period of the agreement, the late Abubakar Audu was the governor of the state. Audu died on November 22, 2015, shortly after the Independent National Electoral Commission (INEC) declared his election inconclusive.

In the report, the committee said there is “no evidence” that Dangote Cement paid any amount of money to the Kogi government for the purported transfer of the facility.

According to the committee, there is “no evidence” that the company paid any dividend or profit realised from the cement plant to the state government since inception.

On the issue of tax payment, the committee said the state government has no power to grant tax holidays to the company, stressing that only the federal government has such authority.

“In view of the fact that there was absence of consideration, the purported transfer was not proper,” the report reads.

“There is no evidence of consideration paid by Dangote Industries Limited to Kogi state government from the alleged transfer of Obajana Cement Company Plc and no dividend was paid to the state from the profits realised from inception of Dangote Cement Company Plc to date.

“Late Prince Abubakar Audu, the former Governor of Kogi state, Abdullahi Haruna, SAN, a former Attorney General of Kogi state and Usman J. Mohammed, a former commissioner for solid minerals, represented Kogi state in the transactions. Due to reasons of death, in the case of Prince Abubakar Audu and exigency of time, in the case of the other two personalities, the committee was unable to reach out and interact with them.”

‘KOGI IS THE SOLE OWNER’

The committee disclosed that the three certificates of occupancy for the cement plant are vested with the state government as the sole owner.

According to the committee, the certificates were used to obtain a loan of N63 billion to finance the construction of the cement plant.

“By the assignment of the three certificates of occupancy, the title in Obajana Cement Company Plc still vests in Kogi state as the sole owner,” the report reads.

“The three title documents were used to obtain a loan of sixty three billion naira only. (N63,000,000,000. 00) to finance the construction of the cement plant in Obajana.”

The committee said the right over the mineral sites belongs to the state government and that there is “no evidence” the state relinquished it to the company.

‘MERGER OF CERTIFICATES OF OCCUPANCY DIDN’T FOLLOW DUE PROCESS’

The committee said “due process” was not followed in the merger of the three certificates of occupancy of the cement plant by the company.

The committee also claimed that the certificate of occupancy issued for the “improper merger” was “doctored” to read 2015 instead of 2016.

“Certificate of Occupancy No. KG. 12357, issued in consequence of the improper merger which issuance date reads 25th November 2016 but was doctored to read 25th November 2015,” the report reads.

“The statutory right of occupancy issued pursuant to the improper merger dated 8th February 2016 but doctored to read 8th February 2015.”