Russian firm, UC RUSAL, defies Supreme Court’s order on ALSCON

Written by admin // November 26, 2012 // 0 Comments

The Russian firm said it could not accommodate the inspection team set up by the government on ALSCON.Over five months after the Supreme Court ordered a Russian Company, UC RUSAL, out of the Aluminium Smelter Company of Nigeria, ALSCON, the company is yet to comply.

The Supreme Court, on July 6, declared that the Russian firm was not the rightful owner of the $3.2 billion ALSCON in Ikot Abasi, Akwa Ibom State, as it did not rightfully win the bid by the Bureau for Public Enterprises, BPE. The Court ordered that an American Consortium, BFIGroup, be handed over the aluminum company as it was the rightfully owner having made the highest bid.

A three-day visit scheduled by the National Council on Privatisation, NCP, to enable stakeholders conduct an assessment of the plant and ascertain its current state pursuant to the apex court’s order was aborted last Wednesday at the eleventh hour following the Russian’s refusal to cooperate, PREMIUM TIMES learnt.

The BPE spokesman, Chukwuma Nwoko, neither answered calls to his phone nor responded to a text message inquiring about why the visit was put off and the new date set for the visit.

But another source close to the privatisation agency attributed the cancellation to two of the agencies listed among those that should have made the trip, which said the schedule was not convenient.

In the wake of the Supreme Court ruling in the case filed by BFIG, the Federal Government had directed the NCP to take immediate steps to ensure full compliance by ensuring that all issues relating to the controversial declaration of UC RUSAL as owners of ALSCON are resolved and the company transferred to its rightful owners.

Consequently, the NCP during its 6th meeting for the year resolved to send an assessment team to visit the plant to conduct first hand assessment of its present condition to enable the BPE draw up a roadmap that would help it give effect to the Supreme Court order.

Led by NCP Chairman, technical sub-committee on extractive industry, Emmanuel Ijewere, the team was to be composed of a representative of the NCP Chairman; an observer from the BFIG, the reinstated preferred bidder; one official each from the Federal Ministries of Mines & Steel Development; and Justice as well as the Nigerian Police Force.

To facilitate the NCP resolution, the Director General of BPE, who is also NCP Secretary, Bolanle Onagoruwa, wrote to the Managing Director, UC RUSAL ALSCON, Anatoliy Polovov, to intimate him of the itinerary of the visit and the need for the company to take care of all logistics, including security, accommodation, and access to the plant and workers.

Curiously, Mr. Polovov did not respond until less than 48 hours to the scheduled visit. He questioned the purpose of the visit; and sought an explanation of the agenda, particularly specific items for discussion, and why a representative of the Nigeria Police Force would be among the visitors.

Besides, Mr. Polovov demanded to know the names of other non-BPE persons in the delegation and the purpose of such person’s participation in the visit, warning that “ALSCON Smelter does not have the facilities necessary to accommodate the high-ranking governmental delegation at an appropriate level of comfort and convenience.”

PREMIUM TIMES gathered that the last minute cancellation of the visit was at a huge cost to BFIG, which was also sent a similar letter inviting it to join the visiting team.

The company reportedly mobilised a 14-man technical and legal expatriate team from Nigeria, United States and South Africa, including General Electric, GE, its technical partner, preparatory to the planned visit.

Mr. Polovov’s response without specific commitments by ALSCON management to guarantee the security and safety of the delegation forced the NCP to reschedule the visit to a future date.

But, BFIG President, Reuben Jaja, on Friday accused the Russians of continuing their resolve to disrespect the Federal Government and defy the Supreme Court almost six months after it ordered ALSCON to be given back to them.

“Why would RUSAL be questioning the Federal Government’s right to go and find out how Nigeria’s strategic national asset like ALSCON was taken over and run down from N130 billion, according to the evaluation by the auditing firm of Pricewatercoopers in 2004, to about N14.5 billion, according to the report by KPMG chartered accountants in 2011, about N101 billion value reduction? Mr. Jaja queried.

“The purpose of the visit was to go and find out why the drastic reduction in value of the plant in just five years, and why most of the reduction was occurring in 2007, the year that UC RUSAL took over the company.

“When Nigerian managers were running the plant, they were firing 104 pots. Since the Russians took over in 2007, they have been firing only 64 pots consistently,” he alleged.

The National Assembly had last year said that UC RUSAL has only paid $130 million out of the $250 million purchase price it agreed to since 2006, leaving a balance of $120 million after six years.

“You can imagine such audacity, when BFIG was disqualified in 2004 for allegedly failing to pay 10 per cent of its bid price within 15 days,” Mr. Jaja said.

Following the apex court’s ruling, he said, UC RUSAL had showed that it was not prepared to respect the order.

Mr. Polovov had declared in a statement to ALSCON employees shortly after the Supreme Court ruling last July, that: “Neither the United Company RUSAL, nor ALSCON are parties to this lawsuit.

“The ruling of Nigeria’s Supreme Court neither changes, nor can change the owner of ALSCON. ALSCON remains part of UC RUSAL and RUSAL’s plans to develop and transform the plant into a cutting edge and highly technological enterprise are in progress.

“RUSAL as a good faith purchaser of ALSCON is ready to protect its ownership even through a litigation in the International Arbitration Court (IAC) in London.”

UC RUSAL has since dragged the Federal Government to the IAC seeking an order prohibiting the execution of the Supreme Court decision to its detriment and, alternatively, granting over $500 million damages should RUSAL suffer a loss to its ownership of the stake in ALSCON.

But, Mr. Jaja is miffed that rather than sit down to discuss with other stakeholders and resolve the issues, UC RUSAL has filed a case before the IAC.

“Who should be taking who to court to demand compensation for running down the plant from N130 billion in 2006 to N14.5 billion in 2011? No Nigerian can go to Russia and defy the order of the highest court of the land and is allowed to leave the country without being punished adequately,” he said.

“There is no way anyone would be able to get a dime from BFIGroup unless the issue of the state of the asset is resolved. What must be noted here is that this is the struggle of the Niger Delta people. It is not about BFIGroup.

“What happens to ALSCON is fundamental to the future development and growth of the region. That is why we will fight anybody at all and ensure that the rule of law prevails and the decision of the Supreme Court is upheld, implemented and celebrated. The plant was built to support the industrial development of the region and create a future for the people,” he added.

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