INVESTIGATION: More Weighty Revelations on How Premium Steel Has Reportedly Sold Heavy Duty Assets in Delta Steel Company

…As Premium Steel Management Makes Statement

Editor of, AUSTIN OMOS OYIBODE, writes on how Premium Steel and Mines is bent on selling heavy duty assets in Delta Steel Company and the action is causing ripples in the host community.

More facts have emerged on how the Indian firm, Premium Steel and Mines, operators of the Delta Steel Company (DSC), is reportedly ferrying away large quantum of assets from DSC. Mr. Richardson Osifo, Manager of Dan Odiete, an estate management firm hired by Bureau for Public Enterprises (BPE) to facilitate the disbursement of DSC lands and houses to the erstwhile staff of DSC, expressed displeasure over the development. visited his office within one of the steel townships of DSC. Osifo bared his mind to us. He told our team that at the privatization of DSC in 2005, there was a sales purchase agreement between the federal government represented by BPE and Global Infrastructure. The agreement, according to him, stated the terms and conditions for the sale of DSC.

He said DSC is classified into two: the core assets which is the industrial area and the non-core assets which is the township areas. The core area which has the industrial machines was the section privatised to Global Infrastructure Nig. Ltd. According to him, in the sales purchase agreement, under clause 6.10, it was stated that steel township 1 will be sold to pay pension gratuities while township 2, 3 and 4 shall be available to the core purchaser.

He said the township area was to be sold to raise funds to pay pension and gratuity of former DSC workers. He said the houses in township 1 numbering 4428 were sold to former staff of DSC as part of their gratuities. He added that the funds were deducted from what was due to them as pension gratuities.

Osifo, who said his firm, Dan Odiete, was invited specifically by BPE to facilitate the allocation of lands to the old staff of DSC, revealed that 370 staff were given to them to allocate lands to. These 370 staff were those who were not accommodated in the houses allocated to the staff for the fact that the houses could not go round all the staff.

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He said at the beginning of the establishment of DSC, the whole lands were acquired from different communities surrounding Udu. He said the affected communities were also given 270 plots of land. All this shows that not all the lands and assets were acquired by Global Infrastructure. Our first publication had already explained in detail how Global Infrastructure came in and how the firm borrowed money it could not pay, leading to AMCON buying over the bad debts and selling the firm to Premium Steel.

The estate manager said if AMCON were coming to acquire what Global Infrastructure had on ground, they were not expected to acquire more than what Global Infrastructure was overseeing on ground. That, according to him, means AMCON had no business with the township areas. “But when they came, the next thing we heard was that AMCON had sold the entire place to Premium Steel and Mines in 2015 and Premium Steel claimed that they bought the entire DSC 100 percent,” he explained.

He said 100 percent shareholding was not sold to Global Infrastructure but 80 percent. The 20 percent left was meant for the community and former workers of DSC. And in a bid to ascertain what AMCON actually privatized to Premium Steel, “you ask them where is your document with which you bought this place, Premium Steel cannot show any document. There is no way you can buy a property without having a deed. But these people do not have a document to show.

“The community and everybody have asked them, they have not been able to show any document. They will only tell you they bought DSC 100 percent. I now asked them if you buy over DSC 100 percent, the 4428 housing units in steel township 1 that were allocated to former DSC staff in 2005, what happened to that? Does it mean you bought it over too? Or was it that the agreement between you and AMCON was backdated to 2005 when you came in 2015?

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“Then what happened to the 370 plots that were given to DSC staff? What about the ones sold to the general public? Are you claiming all those properties were bought over by Premium Steel? They started putting signposts on areas we have sold to staff and general public claiming the land belongs to AMCON.

“Instead of remaining in the steel plant area which they bought, they have come to the township and start harassing people. We are still consultants to BPE and still handling DSC landed properties in township 1. It has been an issue, every time we go to police, we go to area commander. We told them you don’t have anything to do with township area.”

When asked what is the response from AMCON, he said: “That is an issue that AMCON has not explained. It got to a point, BPE had also confronted AMCON to explain all these but up till today, they have not explained. I think there was a move for BPE to invite AMCON for a meeting so they could sit down and sort this thing out but on two or three occasions, BPE has invited AMCON, they have not responded.”

He told Emerald Group that Premium Steel has now invaded the township areas. He added that few weeks ago, all the generators that were in the township area, Premium Steel brought trailers loaded the generators and moved them away. He explained that the generators were meant to power the township area.

He said: “There is a building here,’ pointing it to our editor, ‘housing telephone exchange. They have looted everything there. If you go there now, you won’t find anything. They have sold all the facilities inside. We have also learnt they want to sell the fittings and equipment at the water reservoir. It supplies water to the township, they have already sold those equipment to some people.

“They also have plans to sell the estate office. It was on that basis I had to petition them to area commander office, they invited us and they warned them to stay clear from these properties, that on no account should they sell anything and they should not put signpost anywhere. So, they were ordered to remove all their signposts from areas already sold to staff.

“We just got information too that they are planning to sell this estate. Is that why they came to DSC? They were sent here to produce steel. The staff are not taking it lightly. They are collecting rent from township 2, 3, and 4. They claim it is their own. The money they collect as rent is almost N120million annually.”

Mr. Benjamin Bivbere, a former staff of DSC, lambasted AMCON for its poor handling of the crisis in the company. He said AMCON is giving flimsy excuses to the former staff of DSC. Hence, he said: “If you look through the history of AMCON since it came, you will see the seriousness of the Nigerian government.

“It is unfortunate that we have a country, I will not call it a nation, take note and that is deliberate, we have a country that I don’t want to use unprintable words to describe, because it is still our country. And we hope that one day by the special grace of God, things will turn brighter for us.”

On the issue of steel towns, Bivbere said Global Infrastructure did not buy the steel towns. He argued that it is only areas bought by Global that ought to have been sold to Premium Steel. He said nobody has seen any document with which the transaction between AMCON and Premium Steel was made.

Bivbere also blamed leaders from the area in the state house of assembly, House of Representatives and Senate who could have taken up the issue in the parliament but they remained silent. He said it appears there is connivance between the powers to bring down the establishment.

He said all the vehicles Premium Steel met on ground have been sold. He added: “This telephone exchange is empty they have sold everything inside. They have sold five giant generators at the gate. You call yourself an investor, what is the meaning of an investor?

“When Chike Obi was DG of AMCON, he never came here before this place was sold. He only came on the day he brought Premium Steel that was the day he came. Is it possible for you to see what is on ground on the day of handover?”

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A senior chief of the community, who refused to be named, told Emerald team that the community is in court with Premium Steel. Besides being in court with the firm, management of Premium Steel had pleaded with the community leaders, hence the community has given the firm opportunity to turn over a new leaf.

He explained that following the plea and the agreement the community had entered to cease fire, it is no longer necessary for the community to make statement on the asset stripping allegations against the company. He added that if the company fails to turn a new leaf over a specified period of time, then the community will be compelled to make open statement on the issue at stake.

In response to all the allegations against Premium Steel and Mines, Emmanuel Etaoghene, Deputy General Manager of Corporate Affairs of the firm, denied all evidences produced by all the persons visited by He said: “We are not involved in asset stripping. DSC, before Premium Steel came, was in a very terrible state. It was abandoned for years. Premium Steel came to bring the company back to this production status we are today.“

He said machines that have been left for years is not something you just wake up one morning and say you want to revamp. Premium Steel has invested much to ensure that the company starts production. If you go to the plant now, you will see that rolling mill is working 100 percent.

“If you have to rehabilitate a firm, you start gradually from one unit to the other. As we speak, we are expecting a technical firm from Italy to start repairs on the steel melting shop. When we started, we were less than five but now we have over five hundred staff that have been employed in Premium Steel.

“This issue of assets stripping, there is nothing like that. The generators they are saying we sold, it would have been better to ask them, how many years those generators have been here? Those generators have here for up to 37 years. And most of them, we don’t have need of them, we need to replace them and bring in new equipment. The plant is being resuscitated according to plan, phase by phase.”

He said the generators being sold are old and no longer functioning, asserting that it will be asset stripping if the generators were still useful and functioning. He also denied allegation that the telephone exchange has been vandalized. He argued that the telephone exchange is also an old equipment and no longer relevant and needed replacement with modern equipment. But since the vandalisation till date no one has been replaced and no date of beginning the replacement.

On the argument that Premium Steel did not buy the entire assets of DSC, he said the agreement he saw showed that Premium Steel has paid 100 percent and it has 100 percent ownership of DSC, saying: “There is nothing like 80 percent is for the company and 20 percent for community and former staff, nothing like that.”

According to him, the community people refused to pay the amount meant for the 20 percent given to them, hence BPE wrote to National Council on Privatisation asking for approval to dispose off the area meant for the community for which they failed to pay. He said he was aware that BPE wrote to the community to pay but the community never paid. He said he has letters to back up his claim.

Where a fault lies is that Global Infrastructure that formerly operated DSC used the entire firm as collateral for the funds it borrowed from the banks. Etaoghene’s argument is now based on the fact that the assets used as collateral were what AMCON bought from the banks and handed over to Premium Steel.

Etaoghene added: “AMCON said I don’t know what BPE sold to these people. What I did was to buy these toxic assets from the banks, I’m not privy to the relationship or agreement between you and Global Infrastructure. What I have bought were what was used to secure loans and these are the things that I will sell to recover my money.

“AMCON bought toxic assets completely from the banks. The banks received these assets from Global Infrastructure. Now, if BPE is saying that it was only 80 percent it sold to Global, AMCON is saying that I’m not aware of that relationship. This person used this asset to acquire these funds and I have paid for the funds and to recover my money, I need to sell these assets.” He said he is not aware of any part of the DSC given to staff as part of pension or gratuity. He, however, agreed that houses in steel town 1 are not part of what was sold to them.

But when asked to produce the sales agreement between AMCON and Premium Steel to verify the agreement the firm entered with AMCON and know who to blame, the extent of the agreement and what was privatized to them, Etaoghene turned down the request. He rather said: “That paper is a commercial document. It’s not for the public. It’s confidential and commercial and not for public display. I remember there was a time some people came, they asked AMCON if they could get the copy, even the community requested it from AMCON but AMCON said they cannot display the document to a third party.

“That agreement is between Premium Steel and AMCON. It is an agreement between two parties, if it has to be displayed to a third party, we need the approval of AMCON. And that approval will take time to get it. Not that we cannot display it, we can, but it is a primary agreement between us and AMCON. Don’t think we are hiding it. We have it, yes, it is between us and AMCON. If we must display it, we need to inform AMCON and say look, this is what is happening and if they say go ahead, then we give it to you but it will take time to get that approval.”

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