Community leaders and youths of Udu in Udu local government area of Delta state and former staff of Delta Steel Company (DSC) are heavily aggrieved following the reported sale of assets at the DSC by Premium Steel and Mines Ltd, a firm reportedly owned by Sunil Vaswani, one of the three Indian Vaswani brothers resident in Dubai, major city in the United Arab Emirates. AUSTIN OMOS OYIBODE, Editor of Emeraldng.com, reports on the unfolding developments in the steel company, one of the largest steel firms in Nigeria.
For two consecutive days, Editor of Emeraldng.com was in Udu community. The objective was to unravel the issues surrounding the alleged sale of assets at DSC, a steel manufacturing firm being managed by Premium Steel and Mines, a firm reportedly owned by Sunil, one of the Indian Vaswani brothers. The reported assets sales has generated rift between Udu community and management of the firm. President of Udu youths association, former staff of the DSC, staff of Dan Odiete, an estate management firm hired by Bureau for Public Enterprises (BPE) and the Deputy General Manager of the firm’s corporate affairs, Emmanuel Etaoghene, gave various versions of the assets stripping allegations against Premium Steel and Mines.
While the community youths led by Freeborn Ovwemejephan, community members and former staff of DSC raised allegations of assets stripping against the firm with verifiable evidences, pictorials and pages of petitions written against the firm, management of the firm represented by Deputy General Manager of Corporate Affairs, Emmanuel Etaoghene, defended the firm against the stand of the community people.
Premium Steel took over the operation of the steel firm in March 2015 following its acquisition from Assets Management Corporation of Nigeria (AMCON). Available facts revealed that Delta Steel Company was established in 1982 by the federal government of Nigeria. But with the privatization policy of the federal government during the administration of former President Olusegun Obasanjo, the firm was privatized in 2005 and was handed over to Global Infrastructure Nigeria Ltd, who was declared winner of the bid by BPE. But investigation showed that the bid was won by BUA though it was handed over to Global Infrastructure.
But, according to Benjamin Bivbere, an erstwhile staff of DSC, Global Infrastructure went into massive borrowing from banks with the aim of investing same into the firm. Bivbere, however, said the money borrowed was never used in Nigeria, rather it was exported outside the country at the detriment of DSC. He said Global Infrastructure ran the firm aground and between 2011 and 2012 it began paying half salaries to workers.
He said this was the situation until the company closed shop as it could no longer continue “because, according to Chinua Achebe, they have stolen enough for the owner to notice. And in 2012 they were driven out and the firm remained so until AMCON, an agency of the Central Bank of Nigeria, which is empowered to buy bad debts, bought over the debts of Global Infrastructure and in a bid to recover the money, sold DSC to Premium Steel and Mines.”
He said from his understanding as an erstwhile staff of DSC, Premium Steel could be described as a special purpose vehicle. He insisted that it was incorporated basically to buy DSC in Nigeria. He based his argument on the premise that Premium Steel was registered with the Nigerian Corporate Affairs Commission in December 2014 and on March 18, 2015, the deal was sealed with AMCON. But rather than solve the problem of DSC as an investor, the Indian firm, according to findings, added more trouble to the challenges confronting the steel company.
Our investigations revealed that 80 percent of DSC was what BPE sold to Global Infrastructure, leaving 20 percent for the community and former staff but unconfirmed reports say rather than using the 80 percent sold to it as collateral for the fund it borrowed, Global Infrastructure used the entire facilities in DSC as collateral against the knowledge of the community. Hence, as AMCON paid the debts of Global Infrastructure, it reportedly took over every asset as contained in the said agreement Global Infrastructure entered with the banks.
And as it took over the operation of DSC on March 18, 2015, rather than invest funds to salvage the firm and employ youths and other Nigerians, Premium Steel is reportedly engaged in assets stripping, selling off facilities which were operational prior to the time it took over DSC. With the knowledge of assets stripping by Premium Steel, there has been a great outcry against the firm. With an army of allegations from all sections of the community, including youths, former staff and even consultants to BPE, Dan Odiete, the cup of Premium Steel seems to have been full and reached melting point.
Emeraldng.com received loads of petitions filed against Premium Steel and Mines by youths of the community. The petitions, addressed to BPE and AMCON, detailed quantum of assets being vandalized and sold to unknown persons and organizations by Premium Steel. The petitions dated September 6, 2016, September 26, 2016, July 30, 2018 and August 20, 2018, leveled heavy accusations of assets selling against the steel company. The petitions were copied to all security agencies in Nigeria and the two arms of the National Assembly. They accused the firm of not having genuine intention to revive the steel firm but sell off the assets, close shop and return to India.
The petitions said it was expected that Premium Steel acquired DSC with the purpose of revamping the firm and bringing it to life, but rather the Indian firm resorted to selling off the facilities, used heavy duty vehicles and generators. This, it was revealed, is against the agreement Premium Steel entered with AMCON.
On several occasions, the community youths assaulted the trucks hired by Premium Steel to convey the assets from the premises of the company. At other occasions, due to the unwillingness of youths to allow the trucks out of the premises, the truck drivers were reportedly arrested and taken to the police station in Udu. It was said that one of the trucks spent two days at the police station but with their connivance and collaboration with some elements in the police force, the trucks were released on bail and the assets including heavy duty generators were taken to unknown destinations.
In a long interview with the youth president, Freeborn Ovwemejephan, he reeled out the many sins of Premium Steel and Mines. He explained that what the Indian operators are doing at DSC is asset stripping, vandalization and selling off facilities, heavy duty machines, generators and excavators.
Mr. Ovwemejephan said: “As I speak to you now, all DSC equipment have been sold by this Premium Steel and Mines. It is expected that Premium Steel should repair any equipment that is not working and put it to use but they are rather selling and the ones they don’t sell, they package and take back to India.
“A few weeks back, they went to the generator warehouse, vandalized and removed all the heavy duty generators that were supposed to be refurbished if at all they were not working. But I’m sure those generators are very okay, they are not obsolete.
“As I speak to you, we arrested the trailers, fully loaded with the generators to the Owvian Aladja police headquarters, two days later, they manipulated themselves and released these trucks. If you go to the camp site now, those generators are no longer there.
“There is no gainsaying the fact that Premium Steel does not mean well for Nigeria. It is not interested in revamping the DSC. Come to think of it, what is steel production, the SMS which is the largest plant as far as DSC is concerned, has remained unattended to by Premium Steel.”
“The point is Premium Steel has deviated from the privatization agreement. The mandate they were given by government was to come and make the steel plant to work and not to steal the assets.
“There is another generator which they attempted to remove recently but I got wind of the move, we mobilized to where the generator is, when we got there we discovered that there was this contractor who wanted to buy the generator, he came with one mobile police, we chased them away to prevent the removal of that generator.”
The youth president told Emeraldng.com that the action of the firm was a misplaced priority. He said in the course of the privatization agreement, the 10 percent which was agreed to be given to the community is not given to them. He also added: “there is a clause in the agreement that 10 percent of the dividends that is accruable from the exercise should be given to the community on annual basis. But since privatization till now, the Udu people have not got anything.”
The youth president told our Editor that the youth body wrote letters to AMCON to determine the scope of the transaction it entered with Premium Steel but sadly AMCON failed to give response to the letter sent to it. In a similar vein, the youths said in their interaction with former DSC staff, their interaction showed that the handing over of DSC to Premium Steel was without any documentation with only words of mouth by the former managing director of AMCON who came with another staff for the handover ceremony.
Following the failure of Premium Steel in the management of the steel firm, the youth body is calling for the revocation of the operation of Premium Steel, noting that this is becoming necessary as it is believed that the firm has successfully stripped all the assets of the DSC. He said having revoked the agreement it entered with Premium Steel, it should probe their activities with EFCC and handover DSC to a more competent and financially viable firm with technical know-how to operate DSC.
Prince Kehinde Taiga, Delta state chairman of Committee for the Defense of Human Rights, described management of Premium Steel as people who do not have good intention for the firm. He corroborated the claim of the community youth leader that some trucks were arrested to Owvian police division with DSC equipment.
He said there was no agreement for them to sell DSC equipment “but as I’m talking to you now, we don’t know how far they have gone in selling all the properties of DSC. I believe they have sold almost all the properties of DSC, the tractors, operating machines and generators. They have vandalized the company. We don’t know where we are going to start from now that they have vandalized all the properties of DSC.”
On the claim that DSC was sold to them, Taiga said DSC was given to them on lease and that their business is to revive the place and begin steel production. “There was a time they were owing workers, we led protest to DSC to inform Premium Steel that they must pay up all the workers. There, we held a meeting with the management of Premium Steel.
“They told us that they took over DSC to operate not that they bought all the equipment in DSC. They have not even paid up what they actually bargained with AMCON. They paid part and were allowed to operate. That was what AMCON told us when we held a meeting with them. I was the one who led the protest to DSC,” Taiga, who was a trainee of DSC, told Emeraldng.com
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For him, the authorities of Premium Steel are armed robbers, noting that the company is not in Aladja to produce steel but to sell all the properties of DSC. He insisted: “DSC is a federal government company. It was established in Delta state to give employment to the youths. We were hoping they are going to employ people when they came but they have never done any massive employment in that place, rather they are selling off all the properties of DSC. They are criminals.”
PART TWO: REACTIONS FROM PERSONS WITHIN THE SYSTEM AND RESPONSE FROM PREMIUM STEEL CORPORATE AFFAIRS DEPARTMENT. THIS WILL BE UP WITHIN THE NEXT FEW DAYS.