Obasanjo's Blind Trust

[Toyin Falola]

 

NEWSWATCH

 

The Dirty Transcorp Deal

By Joseph Onyekwere
Monday, August 28, 2006

The sale of Nigeria Telecommunications Ltd, NITEL, to Transcorp, a company in which President Olusegun Obasanjo is said to have interest is still generating dust

When President Olusegun Obasanjo, at the early state of his second tenure, nursed the idea of establishing a Transnational Corporation, Transcorp, his aim was to create a mega-corporation owned by Nigerians which will respond to market opportunities that require heavy capital investment, not just at home but in Africa and around the world. His dream came through soon afterwards with the incorporation of Transcorp on November 16, 2004.

The company became more visible after its purchase of Nicon Hilton and the controversial purchase of moribund Nigeria Telecommunications Limited, NITEL for $750 million. The negotiated sales strategy adopted in selecting Transcorp by the Bureau of Public Enterprises, BPE, generated criticisms from Nigerians who claimed that the whole issue was devoid of transparency and fair play. Transcorp was selected out of seven contenders that emerged from 28 expressions of interest received by the BPE. Rules are being bent to enable the company pay after reneging on initial payment agreements. The criticism that trailed the sale was so sharp that Aliu Wadada, chairman of the House of Representatives committee on capital market, said the House would probe the sale of NITEL. According to him, the committee's concern was to see that the process was transparent.

A source whose company made one of the highest offers and was listed among the seven, told Newswatch in Lagos that the way the bidding went showed that Transcorp was already pencilled down for selection as preferred bidders. He said Transcorp initially under-prized NITEL and its subsidiary, MTEL with the claim that it has an intimidating debt profile but was forced to scale its price upwards when more determined companies began to show willingness to offer something bigger. That could probably account for why it is yet to meet up with the payment agreement.

However, there are those who applauded the selection of transcorp by BPE on the ground that it is an indigenous company. Chris Uwaje, an information technology professional said the federal government should be commended because it would have been a folly to sell NITEL to outsiders. "That is one of the most strategic decisions of the federal government in the twenty-first century. It would be folly to give it to outsiders. No person sells his heart outside. You have Duetche teleoms, British telecoms, France telecoms, the government should be commended because that is the backbone for the knowledge economy of the future," he said. Chife Alloy, chief executive officer of Socketworks, an indigenous software firm said: "Transcorp is a local company and it has the capacity to turn NITEL around."

But recent unfolding events seem to justify the fears of those who felt something was wrong with the Transcorp deal. Sources said President Obasanjo allegedly acquired 600 million shares in Transcorp. According to reports, more than 200 million shares were taken up by his company Obasanjo Holdings Limited, Abeokuta while 400 million shares were acquired by cronies. All the shares were allegedly acquired at N1 per share by the president and his men while Transcorp shares were offered for sale by private placement at N6 per share. And the entire N600 million arising from the share allocation was fully paid as well. Newswatch could not confirm the names of the cronies who benefited from the allocation as at press time last week.

But the magazine learnt that Atiku Abubakar, the vice-president was allocated 100 million shares by the president. Immediately, the vice-president was informed about the reserved shares for him, he rejected it. In a letter dated May 19, and addressed to the managing director of Transcorp, the vice-president said he was informed of some reserved shares meant for him in Transcorp and rejected the offer. The letter reads: "I have just been informed that some shares have been reserved for me in your corporation for which I am expected to subscribe. I write to formally inform you of my decline of the offer. I thank you for the kind gesture and wish you best of luck."

A number of people alleged to be Obasanjo's men were also said to have been allocated shares. Nasir El-Rufai and Charles Soludo, FCT minister and CBN governor respectively were indeed alleged to have been made offers. The CBN in Abuja said last week that they were not aware that the president offered 100 million shares of Transcorp to the CBN governor. One Abdullahi, a CBN staff from the corporate affairs department told Newswatch on phone that they are hearing it for the first time. "I don't think there is anything like that. In any case, I wouldn't know unless they tell us," he said. He refused to disclose his full identity. When Newswatch contacted Remi Oyo, President Obasanjo's spokesperson, she declined to comment on the matter. She had earlier denied the allegation in a press statement.

Newswatch also gathered that more shares of the company are to be offered for sale soon at the price of N10 per share. Also, the president was said to have approved the sale of NITEL to Transcorp and not Abubakar, the vice-president who is the chairman of National Council on Privatisation, NCP. From indication, it appears that the vice-president was opposed to the sale of NITEL to Transcorp. Information reaching Newswatch has it that the sale of NITEL has been removed from NCP and BPE. It is now being handled by the national executive council under the president.

The controversial shares are alleged to be held for the president by his company on a blind trust. Blind trust is a legal arrangement where a public official put his private business interest in the hands of trustees who shield him from day to day business decisions thereby avoiding a potential conflict of interest. But this legal arrangement is not in Nigeria's statute books. This probably accounts for why Obasanjo cleverly opted to protect himself personally by fronting his company, Obasanjo Holdings Limited, OHL.

When Newswatch visited OHL, the parent company of all Obasanjo's businesses which includes Obasanjo Farms, OHL Quarry, OHL Properties and Tempo Foods and Packaging Limited at Quarry Road, Abeokuta last week, Lucky Egede, the group managing director was said to have travelled to Abuja. Newswatch was able to reach him on his mobile line. He said he was a private business man and not a politician and declined to respond to the allegations levelled against his company. He advised Newswatch to extend its enquiries into other shareholders of Transcorp by going to the Corporate Affairs Commission, CAC, for investigation instead of limiting it to OHL. Egede, however, owned up to the purchase of the shares for president Obasanjo under a blind trust according to a Lagos based business magazine.

Newswatch enquiries at the CAC did not reveal the names of the shareholders and the amount of shares purchased in Transcorp, rather it discovered that OHL was incorporated on September 18, 1986 and has 19 Onijaiye Street, Abeokuta, as its contact address. Its registration number is 89233. The company has 5 million as its allotted share capital with three directors. They are, Onaolapo Soleye, with 56 Quarry Road as contact address, Daniel Atsu of 3/5 Ayorinde Street, GRA, Ibara, Abeokuta and Lucky Egede of the same address.

On the other hand, Transcorp's registration number is 611238. Its contact address is Cionse Consult, 23 Floors, 214 Customs Street, Lagos. It has seven directors and allotted share capital of one million. The directors are Ndi Okereke-Onyiuke, director-general of the Nigeria Stock Exchange, NSE, Jim Ovia managing director, Zenith Bank PLC, Jacob Ajekigbe, managing director of First Bank PLC and Festus Odimegwu, immediate past managing director, Nigerian Breweries PLC. Others are Aliko Dangote, president, Dangote Group of companies, Funsho Lawal of Raymond Njoku Street, Ikoyi and Nicholas Okoye, a staff of NSE. All the directors have 3.6 million shares each.

Additional reports by Tobs Agbaegbu, Anza Philips and Sebastine Obasi

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THIS DAY

Transcorp: Obasanjo's Shares in Blind Trust
By Samuel Famakinwa, August 9, 2006

The 200 million shares owned by President Olusegun Obasanjo in Transnational Corporation Plc (Transcorp) are being held in a blind trust on behalf of the President by Obasanjo Holdings, THISDAY authoritatively reports.

According to information, the President's shares which are being held in a blind trust, in line with international best practice and it is being run by some prominent Nigerians and a foreign national.

Obasanjo Holdings is the parent company of all the President's businesses which includes Obasanjo Farms, OHL Quarry, OHL Properties and Tempo Foods and Packaging Limited.

THISDAY also gathered that the President,  throught Obasanjo Holdings Blind Trust  subscribed to 200 million shares  in Transcorp when it was incorporated November 2004. The shares were fully paid .

Since the establishment of Transcorp, there had been speculations that the President may have had a possible conflict of interest in his role as shareholder of Transcorp and President of Federal Republic of Nigeria, from which Transcorp is concluding several transactions, especially the purchase of 75 per cent of NITEL.There is mounting concern about the relationships between the President and Transcorp and if the corporation was getting preferential treatment.

An official in the Presidency told THISDAY that "because the Federal Government wanted Transcorp to buy NITEL, some of the rules guiding the process were ignored, amended or waived. That was even why a 'willing buyer, willing seller' style was adopted in the sale of NITEL after the Orascom bid collapsed. It was part of what was suggested to the President that the easiest way to give Transcorp an edge over other buyers would be to adopt that strategy. But all these are now history", the official said.

This probably accounts for why Obasanjo deftly opted to protect himself personally and put his Obasanjo holdings interest in a blind trust. A blind trust is a legal arrangement where a public official put his private business interest in the hands of trustees who shield him from day to day business decisions thereby avoiding a potential conflict of interest in governmental decisions.

Transcorp was incorporated on November 17, 2004 in response to the need to establish a 'Mega Corporation,' that is 'created' in Nigeria and owned by Nigerians, which will respond to market opportunities that require heavy capital investment not just at home but in sub-Sahara Africa and around the world.

According to its founders, the corporation was established to be the vehicle to reposition Nigeria in Africa and the world, as a nation ready to compete in global markets and is made up of Nigeria's most influential business people and    most   successful  businesses.

It was meant to be Nigeria's own conglomerate which will mobilize local and international capital for investment in world class production facilities sited in Nigeria and managed by Nigerians.

Its directors, who are also the founding fathers of Transcorp, include Dr. (Mrs.) Ndi Okereke-Onyiuke, the Director General of the Nigerian Stock Exchange (NSE) who serves as the Chairman of TransCorp.

Others are Mr  Bernard Ojeifo Longe who recently took over from Mr. Fola Adeola, the pioneering Chief Executive Officer of the corporation, Mr. Nicholas Okoye, formerly the Technical Adviser okereke-Onyuike and now group executive director.

Other directors are Mr. Festus Odimegwu, Alhaji Aliko Dangote, Mr. Jim Ovia, Mr. Jacobs Moyo Ajekigbe, Otunba Funso Mr. Femi Otedola, Mr. Tony Elumelu, Mr. Tony Ezenna, Alhaji Sayyu Dantata, Mr. Adegboyega Olulade and Mr. Mohammed Abdullahi who is Transcorp's the Company Secretary.
Forwarded from Thisday Newpapers

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NM NOTES

 

 

But now, after one month of silence, we hear from Dr. Ndi Okereke-Onyiuke JUST TODAY, September 13, 2006, before a House Committee,  that:

 

1.  there is in fact nothing like a "blind trust" in Transcorps;

 

2.  upon her asking directly from Mr. President whether he had shares, he said "No", but that  he had instructed Obasanjo Holdings to buy shares.

 

How many shares, she did not tell us.

 

Aaaarrggghghh!

 

 

NigerianMuse

 

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Toyin Falola
Department of History
The University of Texas at Austin
1 University Station
Austin, TX 78712-0220
USA
512 475 7224
512 475 7222  (fax)
www.utexas.edu/conferences/africa
http://groups.google.com/group/yorubaaffairs
http://groups.google.com/group/USAAfricaDialogue