OrderPaperToday – The House of Representatives Committee on Privatisation and Commercialisation has vowed not to entertain budget defence of the Bureau of Public Enterprise(BPE) if it fails to pay up an outstanding sum of N189 million to Jorotom, a core investor, Jorotom acquired the National Clearing and Forwarding Agency (NACFA).
The directive was issued when BPE appeared before the House Committee during its public hearing last Tuesday.
Further, the Committee threatened that failure to implement its resolution BPE won’t have any allocation in the 2022 budget or any other legislative engagements. This is because it has at many times failed to appear before the Committee over the dispute on NACFA properties.
Similarly, the Committee also appealed to Assets Management Company of Nigeria (AMCON), Messrs. Jorotom International Agency Limited, Ministry of Defence and other parties to settle their lingering dispute out of Court.
The said disagreement was based on the sealing of the company’s property in Lagos and occupation of land on plot GKN 204, old Airport road Kano, by the Nigerian army for years. The plot is part of the assets and liabilities inherited by the company after it acquired NACFA and was 3.484 hectares.
Jorotom International Agency Limited acquired 100% of NACFA through a core investor sale strategy in 2006 at N3.6 billion financed through a loan facility by the defunct Skye Bank. The Bank was later taken over by AMCON and later merged to become Polaris Bank.
Meanwhile, AMCON took action based on the loan facility, and accruing interest sealed the company’s (Jorotom) Lagos property. At the same time, the Ministry of Defence did not pay for its plot occupied by the military. On the other hand, AMCON filed a case at the Federal High Court and later Supreme court over the failure of the company to offset its debt.
While speaking during the public hearing, Adeniyi Dare, the General Manager of Jorotom International Agency Limited said, their property in Lagos was sealed by AMCON, leading to the loss of about 1000 jobs. He also said the military had also been occupying their property in Kano since 2006.
Additionally, Dare said, the Ministry of Defence showed interest to buy the land. Still, it stated that they undervalued the land and offered N2.2 billion in 2016. He added that another revaluation was done for the property in 2020 for N32 billion., Hence, they stated that N2.2 billion quoted was payment for compensation demanded by the company from the Ministry of Defence. However, only N125 million was paid to them.
Furthermore, he reminded that, during the signing of the MOU on the acquisition of NACFA, it was agreed that the BPE would reimburse the core investor N189 million as the cost of procuring and perfection of the title documents on behalf of BPE.
“However, this payment is yet to be made despite our demand letter of 2nd August, 2021 to BPE. The delay in this payment has impacted negatively on our operations,” Dare said.
In addition, in a letter to the Minister of Defence dated 2nd August 2021 presented before the Committee, the company said they were shocked to receive N125 million out of the N2.2 billion compensation.
The letter read: “We would also like to express our extreme displeasure as to the method of payment that has been chosen by the Ministry. We do not appreciate and neither did we agree to the payment of compensation owed to us to be done in piecemeal. This is of no benefit to us, especially as this payment is long overdue”.
However, in his submission, the Permanent Secretary, Ministry of Defence, Musa Istifanus, said that the payment was delayed and paid in piecemeal due to budgetary limitations.
In a brief presentation to the Committee, the permanent secretary stated that the Ministry is indebted to billions of naira to various property owners whose lands were acquired by the military and approvals have been granted by the Federal Ministry of Works and Housing for payment.
He added that “due to lean budgetary allocation to the Ministry of Defence, the Ministry is incapacitated in settling debts. The inability of the Ministry to pay has led to a series of litigations in court by property owners. Therefore he urged the House to consider an increase in their budget to take care of the numerous compensation for lands by the Ministry.
On their part, AMCON officials said, what they are doing regarding the NACFA properties was within the provisions of the laws establishing the agency.
Speaking, the AMCON’s Head of Litigation started that after all attempts to recover the loans, the agency took the necessary steps. He said that AMCON took over NACFA properties based on the loans acquired from Skye Bank, which AMCON acquired.
According to him, they were in Court to retrieve the debt owed by the NACFA core investor. Therefore, the House should stop hearing on the matter until the determination of the case.
However, Uzoma Nkem-Abonta disagreed saying that, that AMCON invested in Polaris Bank and became part owners of the loan. He said AMCON is mounting interests in the loan while the military is occupying the company’s land and is not willing to pay compensation.
Similarly, another member of the Committee, Benjamin Mzondu (PDP, Benue), lamented that the matter has dragged for so long. Hence there is a need for the parties to find an amicable solution to the impasse.
In his ruling after a motion by Nkem-Abonta, the deputy chairman of the Committee, who presided over the sitting, Kolade Akinjo, demanded that BPE pay the N189 million to Jorotom. In addition, the MD, CEO of AMCON, should appear before the Committee with all documents on loan purchase agreements between Skye Bank and the agency.