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Lawyers feud over Delta Steel Company

By Emmanuel Badejo
05 July 2015   |   11:00 pm
A fierce battle is raging over receivership and the sale of Delta Steel Company Plc (DSC), as two prominent legal practitioners in Nigeria are at each other’s throat over the multibillion naira complex.

Delta-steelA fierce battle is raging over receivership and the sale of Aladja Steel, popularly known as Delta Steel Company Plc (DSC), as two prominent legal practitioners in Nigeria are at each other’s throat over the multibillion naira complex.

The disagreement has led to several litigations, allegations and counter-allegations, some of which are laid bare before the public court, where each divide has been attempting to explain its side of the story.

Indeed, the steel company has been in the eye of the storm for over a decade now, though with different gladiators involved at each stage of the dispute.

In 2006, following its none performance to capacity, the Bureau of Public Enterprise (BPE) had sold Delta Steel under controversial circumstances to Pramod Mittal, the younger brother of Lakshmi Mittal, an Indian multibillionaire and Chairman/CEO of ArcelorMittal, the world’s largest steel manufacturer.

But, the administration of late President Umaru Musa Yar’Adua, reversed the sale, when it was discovered that GSHL breached the terms of the sale by failing to inject equity into the company.

Several other crises had followed after then.

At the moment, entrenched in the controversy are Chief Ajibola Aribisala and Dr. Joseph Nwobike; both being senior advocates of Nigeria, are claiming receivership of the firm.

While Aribisala says he is the legally recognised receivership-manager of the company, Nwobike says the former had been relinquished of that duty, claiming he is now the authentic man appointed by Asset Management Corporation of Nigeria (AMCON) to run the affair of the steel company.

Reacting to a claim that, a firm, Premium Steel and Mines, a company owned by a frontline businessman Sunil Vaswani, has bought the troubled steel giant, Aribisala said the purported purchase was shrouded in a fraudulent manner, urging the president to intervene.

According to Aribisala AMCON sold the company for N28billion as against the N33billion offered by a Chinese company, China Polaris Technologies Company Ltd, which was ready to pay the total sum at once.

He said further that, Vaswani, offered to pay 10 per cent of the sale before 30 days after offer’s acceptance and spread the balance over eight years, with a moratorium of one year, alleging that, his refusal to accept the Vaswani offer prompted AMCON to announce the termination of his company’s appointment as receiver/manager. That is still being tested in court.

According to Aribisala, Vaswani initially offered to buy the company with West African Mines and Steel Limited before eventually buying it with Premium Steel and Mines Limited. The receiver/manager at the time Premium Steel bought the company was Dr. Joseph Nwobike, SAN.
Premium Steel and Mines Ltd was incorporated on December 15, last year. West African Mines & Steel Ltd was incorporated on May 3, 2013.

Aribisala added: “It is also interesting to note that the said Premium Steel & Mines Ltd was only incorporated, for the above purpose, on December 14, 2014, when the bidding was already in full progress, thus, the company did not submit any bid on the sale of the assets, yet it was the same company that the assets of Delta Steel Company Plc were purportedly sold to.

“The essence of AMCON’s acquisition of bad debts from commercial banks, along with the collateral securities, is to confer on AMCON the assurance that in the event of failure of the borrower, in the case Delta Steel Company Plc, to discharge the indebtedness, AMCON can fall back on the pledged securities to recover the indebtedness by virtue of section 34 of the Asset Management Corporation Act.

He said the sale “amounts to an economic sabotage or economic crime since the proceeds of sale, which is quite below the sum of N33billion which China Polaris Technologies Company Ltd, the highest bidder would have paid, belongs to the Federal Government of Nigeria by virtue of AMCON being a Federal Government agency.”

“The sum of N33billion, which was the best offer received on the disposal of the assets of the company, would have been more than enough to discharge the debts owed to AMCON and several unsecured creditors, being owed to staff and ex-staff of Delta Steel Company Plc as pensions and gratuities,” Aribisala claimed.

In quick response to diffuse several publications by Aribisala, Dr. Joseph Nwobike, who said the former was reckless in some of the allegations made against him and the Managing Director of AMCON, Mr. Mustafa Chike-Obi, added that, the sale of the assets of Selta Steel Company Plc (in receivership) to Premium Steel and Mines Limited was approved by the Board of AMCON and the Central Bank of Nigeria.

“Without prejudices to the cases pending at the Federal High Court in Lagos and Warri, let me state that, from the records of the Corporate Affairs Commission (CAC) and the Asset Management Corporation of Nigeria (AMCON), I am the Receiver-Manager of Delta Steel Company Plc. Chief A. A. Aribisala, SAN was effectively removed as Receiver-Manager of the Delta Steel Company Plc on the 8th of December, 2014 following several allegations of misconduct by all stakeholders including the staff, community leaders and other persons as well as his refusal to account for the over N1,239,564,399.97 paid to him by AMCON to manage the receivership. AMCON has filed suit… seeking a declaration, amongst others, that Chief A. A. Aribisala, SAN is bound to render accounts of all funds paid to him for receivership. Perhaps, this may have prompted these malicious publications.”

Nwobike added: “For the avoidance of doubt, the sale of the assets of Delta Steel Company Plc was effected by me in my capacity as Receiver-Manager of Delta Steel Plc before the institution of three different suits. The sale was also effected, after the discharge of Aribisala as Receiver-Manager”, adding the suit, which Aribisala instituted to challenge his purported removal had since been struck out by the trial Judge.

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