Obajana acquisition: Kogi moves to recover Cement Company from Dangote
…Alleges Dangote utilised KOGI CofO for N63bn loan
…MAN condemns invasion by Vigilante
By Omolola Dede Adeyanju
The Kogi State Government has concluded plans to recover Obajana Cement plant from Dangote Group. This is a follow-up to findings contained in a report submitted by the Secretary to Kogi State Government that there was 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 the inception of Dangote Cement Company Plc to date.
In solidarity with Dangote Group- the Manufacturers Association of Nigeria has condemned the alleged closure of Obajana by Kogi State Government.
The closure is a follow up to reports presented to the public, the report of the Specialised Technical Committee on the Evaluation of the Legality of the Alleged Acquisition of Obajana Cement Company Plc by Dangote Cement Company Limited.
The detailed report, submitted to Governor Yahaya Bello of the state, last month, was presented to the public by the Secretary to the State Government, Dr. (Mrs) Folashade Ayoade.
She revealed with documents that the purported transfer of Obajana to Dangote Industries Limited, was “invalid, null and void.”
Ayoade disclosed in the report that three Certificates of Occupancy for Obajana Cement Company Plc, which was solely owned by the Kogi State Government at the time, were used to obtain a loan of N63billion by Dangote.
According to her, the Committee, in view of its findings, has therefore recommended that Kogi State should take steps to recover Obajana Cement Company from the Dangote Group.
The Committee, chaired by the SSG, also recommended that, “Kogi State Government should take steps to recover all accrued dividends from profits made over the years, including accrued interest on same.
“Kogi State Government should take steps to cancel the existing seven Certificates of Occupancy in the name of Dangote Cement Company.”
Stressing the aberration in the arrangement, the SSG said, “Agreement between Kogi State Government of Nigeria and Dangote Industries Limited, dated 30th July 2002 and supplemental agreement dated 14th February 2003, as contained in Exhibit 71 of the Judicial Commission of Inquiry Report, purporting the transfer of Obajana Cement Company Plc to Dangote Industries Limited, are all invalid, null and void.
“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 the inception of Dangote Cement Company Plc to date.
“By the assignment of the three certificates of occupancy, the title in Obajana Cement Company Plc, still vests in Kogi State Government as the sole owner. The three documents were used to obtain a loan of sixty-three billion naira only (63,000,000,000.00) to finance the construction of the cement plant in Obajana.”
Speaker of the Kogi State House of Assembly, Matthew Kolawole, specifically noted that the acquisition of the Obajana Cement Company by Dangote was without the resolution of the House of Assembly, which made the process null and void.
“It is clear that you cannot sell a state government property of any form without the resolution of the Kogi State House of Assembly.
“All the transfer process of the share capital to Dangote from Obajana by the previous administration was without any law backing it by the state House of Assembly,” Kolawole stated.
In his remarks, Governor Yahaya Bello said that he had taken the bold step, in line with his mandate to safeguard the lives and livelihood of the people of Kogi State, including residents, and to ensure their wellbeing.
Bello said this was also coming on the heels of protests by the people of the state who felt they had been suppressed and marginalised by the Dangote Group who had come to rip them off.
The Governor, however, said that the state was open to discussions once Dangote Company Plc is ready to come clean.
“We received several petitions from the general public over this particular subject matter. In the past five to six years, all efforts to sit with the proprietors of the Dangote Conglomerate failed.
“We set up a committee to look into this and invited the Dangote company to discuss with them and tell them the imminent dangers they are exposing the people to, but it all fell on deaf ears.
“I am here to defend my people, and from all reports, it is clear that Obajana Cement Company does not belong to Dangote,” Governor Bello declared.
The Manufacturers Association of Nigeria (MAN) has strongly condemned the invasion of Dangote Cement Plant on Wednesday by the state’s security outfit, the Vigilantes, on the order of the State Governor Yahaya Bello, noting that such action will discourage new investments in the State.
The President, MAN, Engr. Mansur Ahmed, at a press conference to herald its 50th Annual General Meeting (AGM) scheduled to hold on 17-19, October, 2022, said the action by Kogi State is of great concern, and added that it is unimaginable that a State government would take such drastic action to shut down a plant that provides job opportunities and economic activities on a huge scale for the people of Kogi State.
“The action appears to be taken by government and it is alleged to be an effort for some alleged claim on some alleged payment of taxes that have not been made or recovered from the company,” Ahmed said.
He added that the move is totally illegitimate, pointing out that if the State government has any issue against any member of its association or corporate citizen, the appropriate thing to do is to take the member to court.
“You cannot use strong-arm tactics to shut them down or impose very severe restrictions on their operations simply to force them. This is illegal and I believe that what has happened will not happen in a normal operating environment,” the MAN boss said.
He said the association has taken up the matter with the Federal Ministry of Industry, Trade and Investment in its bid to help address the anomaly in Kogi State.
“We have no reason not to pay taxes to the Kogi State government as and when due and I am aware that Dangote Industries is one of the highest tax-payers in Nigeria. But, if indeed for whatever reason that there is a tax for the Kogi State government on Dangote, it has measures and ways of recovery and there is no justification to threaten the closure of that industry.
“We are totally opposed to that kind of measure because there are ways to resolve this amicably in a legal manner and we hope that the relevant authorities in both the federal and state levels would intervene to ensure that this kind of action is not repeated,” he said.
He, however, stated that the theme of the 50th AGM tagged “An Agenda for Nigeria’s Industrialisation for the Next Decade” is borne out of the need to take stock of the nation’s journey to industrialisation, to ascertain the pains and to highlight the performance limiters; recognise the gains and growth milestones; and to identify the learning curves and hurdles ahead.
He added that over the years, the performance of the manufacturing sector has been constrained by numerous familiar challenges that are clearly espoused in its numerous presentations and submissions to the government.
Ahmed said it is a matter of great concern to its members that even as the economy continues to experience very slow growth, policymakers at all levels continue to compound the situation by introducing new taxes; further worsening the difficult and high-cost operating environment.
“In some climes, when the economy slows down, government reduces taxes to encourage businesses to expand, create more jobs and increase economic activities. What we are seeing in Nigeria today is not only increasing tax rate but introducing new taxes and turning every public agency into a revenue collector. In the midst of the challenges, we are resilient and would soldier on with advocacy for a conducive atmosphere for the operation of manufacturing business in Nigeria. We will continue to work towards ensuring that Nigeria becomes an environment that promotes competitiveness,” Ahmed averred.
Also speaking, the Director General, MAN, Segun Ajayi Kadir, said the 50th AGM is special because manufacturers have survived the turbulence both domestically and internationally, stressing that the last few years for manufacturing has experienced external factors largely out of its control impacting negatively on the economy.
Reacting to the federal government’s plan to impose excise duty on non-alcoholic drinks, Kadir said this is the wrong time to have it done.
“What is most painful is that the increase in excise on new products only started this year, so it will amount of changing the goal post in the middle of the game. We have a three-year plan on the escalation of excise duty; all that was thrown into the dustbin and a new and higher one was introduced and targeted at killing the industry. This should be rescinded immediately and that is the only way this sector can survive,” he said.
