FG Sold Delta Steel Company For $30m Despite $700m Valuation – Bureau
The Bureau for Public Enterprises (BPE) has revealed that Delta Steel Company, valued at over $700 million, was sold for just $30 million.
BPE Director-General Ayodeji Gbeleyi disclosed this on Friday during an interaction with the House of Representatives Committee on Public Assets in Abuja.
He said, “Under the Federal Government’s privatisation policy, 80 per cent stake in Delta Steel Company in Aladja, Delta State, was sold to Global Infrastructure Nigeria Ltd in 2005, while the government retained a 20 per cent.”
Gbeleyi explained that “residential buildings and land owned by the company were used to settle workers and pensioners.”
After privatisation, Global Infrastructure Nigeria Ltd reportedly used the company’s assets as collateral for a loan from Ecobank.
In 2015, due to non-performance, the Asset Management Corporation of Nigeria (AMCON) acquired the assets and later sold them to Premium Steel and Mines Ltd.
He accused AMCON of failing to seek clarification from BPE before selling the assets, stating, “while BPE was aware of the loan from Ecobank, it did not know three other banks listed by AMCON as creditors.”
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Petitioners, including the Association of Concerned Residents of Camp 2, 4, and 5 of Delta Steel Company, claimed they had been living in the estate and plots of land allocated to them under a contractual agreement before AMCON and Premium Steel took over.
They alleged “constant intimidation and harassment by police and army personnel since 2015, claiming to be acting on the instructions of AMCON and Premium Steel and Mines to vacate the estates.”
Dr David Emomotimi and Richardson Osifor, speaking for the petitioners, insisted that the assets acquired by AMCON were only those used as collateral for the Ecobank loan and did not include residential buildings.
Osifor stated, “From the contract agreement and information at the Corporate Affairs Commission, the loan Global Infrastructure Nigeria Ltd obtained from Ecobank was N250m but AMCON jacked it up to N7bn.”
AMCON representative Chukwuemeka Umunakwu defended the agency, saying, “the agency acquired the assets of DSC used as collateral to obtain loan from four banks to prevent them from collapsing.”
He explained that “AMCON acquired the assets at N22bn but sold it to Premium Steel and Mines at N32bn.”
When questioned by the committee, the Office of the Accountant General of the Federation confirmed receiving N3 billion from BPE for the sale of 80% of Delta Steel Company to Global Infrastructure Nigeria Ltd.
The AGF representative, Kabiru Ademola, said, “The AGF was yet to get any response from Central Bank of Nigeria regarding claim of payment of N32bn by AMCON in respect of DSC assets to Premium Steel and Mines Ltd.”
He added, “Though AMCON claimed the money was paid to the Federation Account, the agency was unable to provide proof of payment to the committee.”
Dr Armstrong Takang, Managing Director of the Ministry of Finance Incorporated (MOFI), noted, “Though MOFI oversees the management of assets and investments in the country, the agency withdrew from the issue of Delta Steel Company as a result of many controversies.”
Committee Chairman Ademorin Kuye said, “The committee decided to probe the purported sales of the Delta Steel Company and the controversies surrounding its acquisition by AMCON.”
The committee directed AMCON and Premium Steel and Mines “to desist from harassing the residents of the estate in Delta Steel Company until the investigation is concluded.”
Titilope Adako is a talented and intrepid journalist, dedicated to shedding light on the untold stories of Osun State and Nigeria. Through incisive reporting, she tackles a broad spectrum of topics, from politics and social justice to culture and entertainment, with a commitment to accuracy, empathy, and inspiring positive change.
