Creditors of Mtel, Nitel bicker over default payment by liquidator
The core creditors of defunct Mtel and Nitel have written a petition to Presidential Advisory Committee Against Corruption (PACAC) and the Financial Reporting Council of Nigeria (FRCN) expressing worry over the way and manner the liquidator is handling their repayment plans more than one year ago.
It would be recalled that it was after the deal was sealed that NATCOM Consortium invested in the company.
In a petition, signed by a representative of the creditors, Mr. Sebagen Henry Noboh and dated October 20, 2016, the complainants decried what they described as poor accountability in meeting their statutory obligations, which centres on settling debts owed by Nitel/Mtel before it was privatised.
According to them, the liquidator has only paid about 16.5 percent of the amount stated in his offer letters to individual creditors, leaving a balance of 83.5 per cent unaccounted for. The offer letters, dated May 12, 2015 were personally signed by the liquidator, Olutola Senbore.
The petitioners agreed that the 16.5 percent was paid to them in two installments of 15 percent in May 2015; and 1.5 percent in July 2016, an interval of 14 months.
The matter in contention is the N51, 648, 643, 000 proceeds from the sale of the core assets of Nitel/Mtel to Natcom Consortium for $252.25 million by the last administration.
The Consortium, had fully paid up since March 2015, but the creditors are still struggling to get their money from the liquidator, more than 18 months after he received the money from Natcom.
The liquidator, Olutola Senbore said he formally took over the core assets of the companies on March 25, 2014.
“The statement of affairs prepared by NITEL management showed that the company’s Net deficiency of assets on liabilities as at that date amounted to approximately N98.75billion. MTEL claimed that it only had records up to 31 December 2006 because its records were destroyed when it was ejected from its former head office. The financial information presented for MTEL showed that it had net deficiency of assets on liabilities of approximately N49.01billion as at 31 December 2006. This information is considered stale for the purposes of the liquidation process.
“The Statement of Affairs of both companies revealed the following:
Both NITEL and MTEL were indebted to the Commercial Banks as of March 2014. Whilst NITEL did not use its assets as collateral for its borrowings, MTEL did and in fact had an All Assets Debenture on its assets. The Assets Management Corporation of Nigeria (AMCON) had taken over the loans from the banks and thus held the debentures on all MTEL’s assets as at 14 March 2014. The debentures covered all the equipment of MTEL and its licences. AMCON claimed that both NITEL and MTEL owed it N107billion as at 14 March 2014 when the FHC ordered the liquidation of the companies. It became crucial to negotiate with AMCON the release of the charged assets to enable the Liquidator proceed with the sale.
“Both NITEL and MTEL had ceased operations since 2008/2009 and laid off the majority of their staff. However NITEL continued limited operations in submarine cable services and co-location on ducts and towers.
The technical assets were largely unused since then and were vandalized, stolen or damaged in many cases.
The assets included book debts largely due from government Ministries, Departments and Agencies that proved difficult of recovery. Approximately N7.9billion of these debts were unrecovered as at 31 July 2016. Private sector debts outstanding as at that date that proved unrecoverable amounted to approximately N597.5 million”, he explained.
Recall that during the privatisation, the liquidator had computed the amount payable to each of th 300 creditors based on available funds, in line with the provisions of the Companies and Allied Matters Act (CAMA) 1990.
One of the issues raised was the decision of the liquidator to be paying them in bits, stating that it was in clear violation of provisions of the CAMA Act.
They expressed fears about the safety of the funds and the probability of the Liquidator releasing the 83.5 percent balance without intervention of the relevant monitoring agencies.
Also affected were the various consultants to the creditors whose cheque the liquidator has refused to release, despite legally contracted agreement documents said to be in his possession.
The petition added, “We urgently seek the intervention of the FRCN for independent examination of the Liquidator’s account records, because he has remained evasive since July.
“We also believe that the outcome of PACAC’s investigation might give President Muhammadu Buhari a clue into certain tendencies that have cast doubts on the credibility of the exercise.