House Summons Otedola Over AP Shares

Femi Otedola, Chairman and Chief Executive Officer of Zenon Oil, has been requested by the House Committee on Privatisation and Commercialisation to appear at a public hearing on Tuesday and Wednesday over the acquisition of the shares of African Petroleum (AP).

The committee resolved to hold a public hearing, and wrote to him on December 4 “sequel to the receipt of the petition from Sadiq Petroleum Nigeria Limited titled Re: Illegal reacquisition of African Petroleum Plc Shares through capitalisation of undisclosed debt-plea for redress.”

The letter, signed by Committee Chairman, Njidda Ahmed Gella, asked Otedola to provide documents that would enable it to get to the root of the matter.

Zenon, owned by Otedola, had in the dying days of the Olusegun Obasanjo administration bought the 28.7 percent stake of the Nigeria National Petroleum Company (NNPC) in AP, valued at about N17 billion.

Obasanjo initially stopped the sale of the shares to Jimoh Ibrahim, Managing Director of NICON Group, and directed the Bureau of Public Enterprises (BPE) to take over the shares and advertise them for competitive bidding.

He took decision because of protests over the transaction.

The NNPC had acquired the equity interest via its staff pension fund in 2005, through a debt-swap of over N10 billion debt which AP owed the corporation.

The acquisition was gazetted and slated for sale to the public, but this was never to be, as it was quietly sold to Zenon Oil, and crossed on the Nigerian Stock Exchange (NSE).

Asset Management Company Limited (ASSEMAL), a related company to Afribank, is also a core investor in AP.

ASSEMAL acquired 30 percent shares divested in 2005 by AP’s former core investor, Sadiq Petroleum, following the row with the NNPC over the debt-for-equity demand, a development that conferred on ASSEMAL the status of a core investor.

ASSEMAL, which already had some shares, bought over 120 million shares of AP worth about N6 billion, which was crossed in about four deals on the NSE.

Sadiq Petroleum became the core investors in AP by purchasing the 30 percent equity divested by the government in 2000.

Sadiq, however, ran into murky waters when it emerged in 2001 that AP owed N26 billion to banks and the NNPC.

Sadiq protested the claims, and accused the BPE of concealing the facts and misleading it during the sale.

Also at the weekend, the House Committee on Power and Steel Development summoned Saitech, the German firm constructing the Mambila power project, to appear before it today to explain why the project has not taken off.

The committee queried the N800 million the company got for the feasibility contract.

Committee Chairman, Ndudi Elumelu, lamented in Lagos when he and other committee members visited the Egbin thermal power plant that no significant work has been done in Mambila, even though the contract was awarded in 2006.

His words: “If I tell you I was disappointed that would be underscoring the fact, because the contractors are doing what they are not expected to do. We saw some things that they ought to have taken to the lab to ascertain if that soil is good enough for such a magnitude of project to be sited. Even for five months, they have not taken those things there.

“Also, they claimed that the people who are residing in that community are not co-operating with them. We interviewed most of the residents and they said they have nothing to do with the contractor. They said they have peace with the Mambila power project because the project will give them light.”

– Daily Independent


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