Wednesday, April 12, 2017 2:49 pm
A businessman drags Nigerian government to court over how he was elbowed aside in the sale of Sani Abacha’s refinery in Sierra Leone
By Abubakar Hashim
Chief Tony Chinyere, Chairman of Cross Oceans West Africa Limited, who owns 18.07 per cent equity in West Africa Refinery Company, WARCO, otherwise called Abacha Refinrey has, for over a year been fighting alleged sharp practices by the Nigerian Bureau of Public Enterprises (BPE) in the sale of the Federal Government’s holding in the refinery, the only such facility in Sierra Leone. Beyond dragging the parties to court of law in Sierra Leone, Chinyere had asked former President Olusegun Obasanjo and the late President Ahmed Tejan Kabbah, at different times, to wade into the crisis. He had equally made concessionary offers to end the contentious matter, but the opposing party had different ideas, allegedly conniving with the BPE and Oando Plc and deploying underhand tactics to perpetuate its hold on the disputed company.
Genesis of the crisis
TheNEWS gathered that the WARCO saga began after Unipetrol, (now Oando Plc), on Chief Chinyere’s intervention and facilitation successfully bid for the liquidation of Sierra Leone Refinery Company for $1.2 million.
Chinyere stated that “WARCO was formed in 1995 after Unipetrol bid for the liquidated Sierra Leone Refinery. “After the bid, Cross Oceans, a company in which Chinyere had controlling shares, was subsequently offered 18.07 per cent of the total shares of WARCO valued at $388,000, which was fully paid for; and was, therefore, made a pioneer director of the company, alongside a representative of Unipetrol Nigeria (Oando).”
The Federal Government of Nigeria at the inception, had no stake in WARCO but got involved when it confiscated the shares of companies in the refinery traced to the late Head of State, General Sani Abacha. After taking over Abacha’s stocks and in line with its policy to divest shares from the refinery, the Federal Government instructed the Bureau of Public Enterprises to sell the shares. Oando also decided to sell its shares, opting to do so through the BPE and the stocks consolidated as 72.66 per cent with FG’s 48.44 per cent and Oando’s 24.22 per cent.
The Cross Oceans boss accused the officials of BPE and Oando of deliberately manipulating the bidding process, undervaluing the shares and selling to a front, Mr. Thorlu Bangura, a Sierra Leonean, owner of Majestic Oil. Conditions issued by the BPE, while inviting strategic investors for expression of interest, clearly precluded Majestic Oil, it was gathered. For instance, evidence of successful investment in and management of downstream oil and gas companies was a key qualifying demand which Majestic Oil could not have met. Official records in Sierra Leone available to TheNEWS indicated that the company was incorporated in 2002 and “remained inactive since incorporation.” It only roared to life in 2004 to emerge as BPE’s preferred bidder for the FG/Oando shares.
It was further gathered that the provision of WARCO’s Memorandum and Articles of Association,which allowed existing shareholders right of first offer in the event that any of the owners decided to sell his holding, was disregarded. A meeting was purported to have been held where those provisions were suspended. Chief Chinyere claimed not to have been invited to the meeting.
During the bidding process, Oando disclosed to the would-be bidders of the existence of a debenture loan granted WARCO to the tune of $602,272, which with accrued interest had risen to $922,229.04. The disclosure of the liability was meant to scare bidders to give opportunity to manipulate the process, the Cross Oceans chairman alleged. He buttressed his argument with the revelation that soon after the other bidders withdrew, Oando and BPE, without recourse to other shareholders, reduced the debenture loan to $308,809.45 without informing the other bidders.
“As if that was not enough fraud, soon after the alleged sale (to Majestic Oil), they (Oando and BPE) met again without reference to shareholders and further reduced the debenture loan to $194,804.50,” Chinyere stated. According to him, the value of the consolidated shares of FG and Oando (72 per cent), which is $1,560,000 was surprisingly sold to Majestic Oil for a paltry $363,300. “The amount is below the $388,000 my company paid in 1995 for a mere 18.07 per cent shares,” the Cross Oceans boss lamented. “Could that be said to be a very transparent way of selling government shares and interest in a company?” he queried.
Cross Oceans headed for court
Apparently aggrieved by the developments, Cross Oceans headed for the law court in Sierra Leone and got an injunction against Majestic Oil. The Federal Government and Oando were the other defendants in the suit, challenging the sale of WARCO shares. The trial judge, A.B. Raschid, ordered officials, employees and agents of Majestic Oil to “vacate the offices and facility of the first defendant (WARCO).” The Judge further pronounced that Majestic Oil should not re-enter the premises and facility of WARCO at Kissy Dockyard in Freetown until the hearing of the application brought by council to Cross Oceans had been heard. Cross Oceans was also granted the right of access to WARCO to verify that Majestic Oil was complying with the injunctions.
Despite the court injunction, BPE and Oando were eager to hand over WARCO to Majestic Oil and at a meeting held in Freetown, they purportedly appointed Mr Thorlu Bangura and his relations as alternate directors to represent their interests in the company. “How can you explain a situation whereby shares held by a Nigerian in a foreign land, whose transfer was put on hold by a law court, was now consigned to a family whose members were never legally known to the BPE and Oando? This is the mother of all frauds being perpetrated by officials of a country that is supposedly fighting corruption,” Chief Chinyere lamented.
Sierra Leonean government’s intervention
Because of the strategic importance of WARCO to the Sierra Leonean economy, Attorney-General summoned a meeting of the contending parties in February 2005 and despite the count injunction in his favour, Chief Chinyere conceded to the brokered arrangement excluding both Cross Oceans and Majestic Oil from running the refinery. A committee comprising Sierra Leonean government agencies was set up to run the refinery until contrary instructions come from the court.
The Cross Oceans boss said he consented to the Sierra Leonean government’s arrangement for an independent body to oversee the refinery’s operation to avoid being blackmailed as being adamant and out to sabotage that country’s economy.
Majestic Oil has, with the connivance of Sierra Leonean government officials been allegedly circumventing the arrangement, operating WARCO and diverting its moneys into private accounts. Bangura, it was learnt, mockingly offered to buy out Cross Oceans from WARCO, offering $165,000 for the company’s 18.07 per cent holding bought for $388,000 in 1995.
This is contrary to Cross Oceans concessionary offer to refund $363,300 paid to BPE/Oando to Majestic Oil and in addition offer the company 10 per cent of the FG/Oando’s consolidated shares free of charge and make Mr. Thorlu Bangura chairman of WARCO. Alternatively, Chief Chinyere offered to be bought out for the sum of $500,000.
FG’s disturbing silence
Although it is believed that the mishandling of the WARCO shares sale led to the sack of former Director-General of BPE, Dr. J.J. Bala, the Federal Government’s intervention to redress the wrongs in the WARCO affair is yet to materialise. The Sierra Leonean Attorney General was said to have quoted his Nigerian counterpart as affirming that the Federal Government’s shares were sold to Majestic Oil and pleading that the matter be resolved to avoid embarrassing the Nigerian government in the on-going court action. The Sierra Leonean Attorney-General also urged Chinyere to seek redress in Nigeria as Majestic Oil was holding FG and Oando’s shares, threatening that he would advise his government to impose a decision and repossess the refinery.
The development appears to be assuming the status whereby Sierra Leone would protect one of her own against a foreigner, while Nigeria looks eager to sacrifice her own citizen in a deal made awry by government officials. The question about who wins at the close of this two-nation contest blows in the wind.
The matter was taken to the ECOWAS Court for adjudication. TheNEWS was reliably informed that the ECOWAS Court has referred the matter to the Nigerian Courts for further adjudication.
•This story was first published in the 19 April 2016 edition of TheNEWS