Host communities drag FG, PSML to court over sale of DSC assets without their input
Doing things in host communities with recourse to the people by the federal government has continued to be a big issue in Nigeria over a long time especially in volatile oil communities.
This time, towns hosting defunct Delta Steel Company (DSC) in Udu, Delta State, in an originating summons filed before a Federal High Court, Warri Judicial Division, Delta State, the Ovie of Udu Kingdom, HRM Owhoru 1 (JP), leading others, namely the Otota of Udu Kingdom, Chief Sam Odibo; and the President-General, Union of Udu Communities, Chief Steve Sokoh, approached the court for redress, claiming that as equity holders in the firm, the process of sale wasn’t transparent and it shortchanged them.
The key point of the suit against the Federal Government and Premium Steel and Mines Limited (PSML) over sale of the assets of the steel company is simple; let the host community be part owners of the company considering the impacts they are to face in the course of industrial production.
The communities had made it clear before the government delegation to the community before time that they must have a stake whether the company is being run by the government or any other private entity, but government went ahead to sale to the company without recourse to the communities’ demand.
Details of suit sighted by our correspondent showed that the plaintiffs, who sued for themselves and on behalf of the people of Udu clan/Udu Traditional Council, named the Bureau of Public Enterprises; the Attorney-General of the Federation; Premium Steel & Mines Ltd; and Delta Steel Company Plc as first to fourth defendants, respectively.
Business Hilights recalls that Delta Steel Company, which was commissioned in 1982, ran into troubled waters when production in the steel plant came to an abrupt halt, as the plant was forced to shut down in 1996 due to prevailing political intrigues at the time.
The company continued without production until February 8, 2005 when the Federal Government, under its privatisation programme, sold 80 percent shares of DSC to Global Steel Holdings Limited (GSHL), an investor which could not profitably manage the company.
GSHL was accused of assets stripping and accumulation of huge debts.
By January 2015, the assets of the company was again concessioned to Premium Steel and Mines Limited by the Bureau of Public Enterprises, leaving DSC’s liabilities, like former staff salaries and entitlements, to contractors for AMCON to defray.
Premium Steel and Mines Limited stepped in having acquired major equity holding as core investor in DSC in 2015 in order to revive the company and restore its lost glory and reign of profitability.
However, details of the transaction between PSML and BPE, which opened the gate of the company to the new investors, was not disclosed to the host Udu community, they alleged, which has triggered some bad blood between the company and the people.
Unable to reach an amicable settlement of their differences, Udu communities, who claimed to be stakeholders, having been allotted 22 million ordinary shares in the company originally, representing 10 percent of the total shares of Delta Steel at its privatisation, asked the court to redress the impasse.
Their principal prayers at the court include a declaration that they are entitled to 22,000,000 ordinary shares, representing 10 percent of the total shares of Delta Steel Company and that both the BPE and the AGF have no right, power or authority whatsoever to sell or transfer to Premium Steel either directly or through any of the agents of the Federal Government of Nigeria, more than 80 percent of the shares of Delta Steel.
The Udu communities also want the court to declare that any purported sale and/or transfer of more than 80 percent of the shares of Delta Steel to Premium Steel by both the first and second defendants, either directly or through any of the agents of the Federal Government of Nigeria, is null and void.
Besides, the host communities pray the court to hold that PSML cannot lawfully continue to take over the assets of Delta Steel without a valid sale and/or transfer of same by the first and second defendants, either directly or through any of the agents of the government to Premium Steel.
