Socio-Economic Rights and Accountability Project (SERAP) has sent an open letter to President Muhammadu Buhari requesting him to use his “good offices and leadership position to revisit and refer the allegations of corruption and abuse of process in the privatisation of public enterprises in Nigeria between 1999—2011 to the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for further investigation, and if there is relevant and sufficient admissible evidence, for anyone suspected to be involved to face prosecution.”

The organisation urged Buhari to “reform the Bureau of Public Enterprise (BPE) to remove opportunities for corruption in privatisation process, and to instruct the EFCC and ICPC to ensure the recovery of proceeds of corruption. We request that you take the steps within 14 days of the receipt and/or publication of this letter, failing which SERAP will institute legal proceedings to compel your government to act in the public interest.”

In the letter dated 1 December, 2017 and signed by SERAP executive director Adetokunbo Mumuni the organisation said: “SERAP has obtained and carefully read the full report of the Senate Ad-Hoc Committee on Investigation of the Privatisation and Commercialisation Activities of the Bureau of Public Enterprise (BPE) from 1999 to 2011, which contains damaging allegations of corruption, presidential interference, and abuse of due process in the selection of core investor, valuation of public enterprises, pricing of shares/assets, determination of workers terminal benefits, and use of proceeds of privatisation.”

According to the organisation, “Many cases of presidential directives/interference during the period under review (1999-2011) affected the process of core investor selection. The BPE was negligent and ineffective in monitoring of privatised companies. In some cases, BPE never monitored the companies for the entire lock-in period and in other cases their reports were complete opposite of what was on the ground.”

The letter copied to Vice President Yemi Osinbajo, who is also the chair of the National Council on Privatization (NCP), reads in part: “It is in the public interest that any sales of public assets will get the best value but the Senate report shows exactly the opposite. By revisiting the privatisation process and referring the allegations of corruption documented in the report to the EFCC and ICPC, your government would be demonstrating that it’s willing and able to fight impunity of perpetrators of corruption, which is responsible for legacy of grand corruption and abuse of office in the country.

“Specifically, the committee among others found that: A total sum of N301bn was realised as proceeds of privatisation from 1999 to 2011. N900m of that was used as loan to Nigeria Re-insurance Plc for recapitalisation, in violation of section 19(2) of the Public Enterprises (Privatisation and Commercialisation) Act 1999. Folio Communications Limited pledged the assets of Daily Times Nigeria Plc to obtain loan from bank(s) and utilised the loan to pay for the share of the company.

“Core investor converted the premises of Volkswagen Nigeria Limited into bonded warehouses for storage of contrabands mainly rice, vegetable oils, fertilizer, but was not reported by the BPE. Former Director-General of BPE, Mrs Irene Nkechi Chigbue sought and received direct approvals of former President Olusegun Obasanjo for many privatisation transactions, in violation of Section 11 of the Public Enterprise Act and the Bureau Procedure Manual.

“Aluminium Smelter Company of Nigeria (ALSCON) — BFIG Corporation of the USA was declared preferred bidder and winner with a bid of $410 million after going through the bidding process but was denied its legal right to negotiate terms, sign Share Purchase Agreement and pay 10% initial payment. However, BPE approved a Willing Seller Willing Buyer to Rusal/Dayson for $250m and cancelled BFIG Corporation $410m offer. Aluminium Smelter Company of Nigeria was grossly undervalued, having being built for $3.2bn and was privatised by BPE for $130m excluding $120m Imo River Channel Dredging cost from the purchase consideration.

“Michelle Nigeria Limited emerged as the preferred bidder of the Apapa Port Complex Terminal “C” but it was given to ENL Consortium Limited which already had one, in breach of Ground Rule 7, which states: “No single bidder/concessionaire would be allowed to have more than one concession in Apapa Port Complex.” BPE reversed the process instead and gave Terminal “C” to ENL Consortium Ltd without cancelling the Michelle Nigeria Limited offer, in breach of the core investor selection process.

“Former Director General of BPE Ms Bolanle Onagoruwa abused the approval process in the sale of 5% Federal Government’s residual shares in EPCL to Indorama Group, in contravention of the First Schedule of the Public Enterprises (Privatisation and Commercialisation) Act 1999. Indorama Group has already acquired the maximum 75% shares reserved for core investor in EPCL as provided in the First Schedule Section 1(1) no. 6 of the Act.

“The share purchase agreement created an escrow account into which all the monies shall be paid. However, the escrow account was not opened. The enterprise was handed over to the purchaser without payment of the purchase consideration. Former president Olusegun Obasanjo approved the addendum, in violation of the Privatisation Act and the share purchase agreement.

“All former Directors-General of BPE (Mallam Nasir el-Rufai-1999-2003; Dr Julius Baba-2003-2004; Mrs Irene Chigbue-2004-2009; Dr Chris Anyanwu-2009-2010; and Ms Bolanle Onagoruwa-2010-2012) established several accounts with various commercial banks, in violation of Section 19(1) of the Public Enterprises (Privatisation and Commercialisation) Act 1999.

“All former Directors-General used privatisation proceeds to pay transaction expenses, consultancy fees and staff terminal benefits without appropriation by the National Assembly, in violation of Section 19(2) of the Public Enterprises Act. Former Director-General of BPE Mrs Irene Chigbue used privatisation proceeds to execute capital projects (Office extension) in 2007 in violation of this provision.

“The process of privatisation of public enterprises was totally set aside in the concession to Global Infrastructure Holdings Limited and Global Infrastructure Nigeria Limited by the then Federal Ministry of Power and Steel Development in breach of Section 11(c) of thee Public Enterprises Act. BPE later converted the Concession Agreement to a core investor agreement, in breach of the transaction process.

“The N1.9bn Privatisation Proceeds loaned for recapitalisation of Nigeria Re-insurance Plc and Nicon Insurance Plc was not used for that purpose and the BPE is yet to recover the money. Contract for dredging Imo River Channel was overvalued at $120m by BPE. This would cost less than $100 today (2011). 43 enterprises of 122 privatised companies are not performing.

“The core investor of Transcorp Hilton Hotel agreed among others to within 3 years construct a shopping mall within the Hotel grounds; and construct short/long stay serviced apartments on the available land within the hotel premises. However, to date the core investor has failed to deliver in breach of clause 8.4 of the share purchase agreement and BPE also failed to apply sanctions as provided in clause 10.

“The core investor of Abuja International Hotels Limited (Nicon Luxury Hotel) agreed to invest at least additional N2bn to complete the furnishing of the hotel and provision of ancillary services to a 5-year deluxe status within 9 months. However, the core investor has failed to comply, in violation of clause 7.3 of the share purchase agreement and BPE has failed to apply sanctions as provided in clause 9. Also, the core investor of Sheraton Hotel and Towers, Abuja has failed to comply with the share purchase agreement, in violation of clause 8.6 and the BPE has failed to apply sanctions as provided in clause 9.

“The core investor in Nigerian Cement Company Plc (Nigercem) has woefully failed to fulfil its technical and financial obligations several years after privatisation. The core investor in Delta Steel Company agreed to invest $100.65m within 15 months but no evidence of such investment. The Delta Steel Township 1 Housing Estate is comprised of 4,500 housing units; 1,109 unauthorised plots were illegally sold/allocated by the BPE.

“Dr Julius Bala should be investigated by anti-graft agencies for giving approval to Folio Communication Limited for the illegal sale of assets of Daily Times Nigeria Plc. Ms Bolanle Onagoruwa showed gross incompetence in the management of the BPE and she illegally and fraudulently sold 5% Federal Government residual shares in Eleme Petrochemicals Company Limited (EPCL).

“Poor privatisation monitoring, skewed share purchase agreements in favour of investors in many instances and abuse of process in utilising privatisation proceeds further marred the privatisation programme. Some of the share purchase agreements were skewed in favour of private investors against public interests. In the Nicon Insurance Plc share purchase agreement, the BPE deliberately removed the protective clause on sales of assets without BPE’s written consent within the first 5 years.”

“Bid bonds are usually refunded to bidders after closure of bidding. In the case of crystallized bid bonds transaction expenses are deducted before refunds. BPE abused this process in the sense that National Council on Privatization (NCP) approvals for funds are kept for years without payment.”

“Terminal benefits of workers of companies slated for privatisation are usually computed by management or by an appointed BPE Actuarial Consultant before payment. The processes are often abused by BPE. In NITEL, workers were forced to accept less than 5 years pension buy-out where it was agreed earlier for 5 years. BPE owed workers in Delta Steel Company (N5.2bn); and ALSCON (N2.7bn). In Federal Superphosphate Fertilizer Company the Actuarist computed and recommended full payment of N457m but BPE paid only N383m leaving a difference of N73m.”

“Workers of National Steel Raw Materials Exploration Agency, Kaduna are owed gratuities of N150m by Nicon Insurance Plc. Workers often benefit from allotments of shares in companies undergoing privatisation on request. The reserve shares are however not granted on free carriage in compliance with provisions of the First Schedule Section 1(1) in line with Nigeria Individuals Participation as Percentage Post Privatisation. Out of the 122 privatised public enterprises only 14 enterprises had shares reserved for workers. 11,000 jobs were lost in Nitel/M-Tel; 2000 jobs were in Daily Times; and 1,000 jobs were lost in ALSCON.”

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