Kogi Questions Acquisition of Obajana Cement by Dangote
There is an ongoing battle between Kogi State and Nigeria’s largest cement company, Dangote Cement over multiple issues, especially assets ownership of the Obajana Cement plant which was purportedly sold to Dangote Industries Limited in 2002.
Exactly 20 years after, the state has come out to deny receiving payments from the transaction. The question is: did Dangote Cement pay? For assets ownership to be transferred, there must have been a form of consideration and perhaps an agreement that states the terms of the deal.
If there is nothing like that in place, means of payment must available. Is Kogi state serious about the weighty allegation at all? If truly the state received no consideration, how was the asset transferred to its current operator? Could it be politically driven? We are not saying so but it further reveals the rottenness of the system.
Why did Kogi State wait for so long – exactly 20 years ago?
If the allegation is true, how would the benefits accrue to Dangote cement be adjusted over the years as a listed company on the Nigerian Exchange? What would be the impacts on its audited financial statement?
Would there be a need to restate its financial report to indicate the effect?
From an accounting perspective, should the allegation be true, there would be a need to adjust its financial report to reflect the company’s true financial position and of course, in a clime where information is priced into shares in the local bourse, Ticker: DANGCEM could take a heavy hit.
Investors – who are probably less than 12% for now – would dump the cement company’s shares. Price will fall, and valuation will sink.
What happened?
The Kogi State House of Assembly Wednesday directed ordered the shutdown of a factory of Dangote Cement Plc situated at Obajana in the north-central state, saying the asset was not legitimately acquired by the firm.
Aliko Dangote, Africa’s richest man and the company’s majority shareholder, has been summoned to a meeting with the lawmakers, the state legislative arm said, but demanded more time to do.
Resident youth thronged the factory to drive out staff after the news of its closure order broke into the open but faced resistance from officials of the state government.
Chief among their grievances is alleged corporate social responsibility failure by Dangote Cement bordering on environmental hazards from industrial pollution induced by factory activities and neglect of the host community it is “making billions from.”
The government’s action is the outcome of a petition by locals, prompting inquiry into the nature of the transaction leading up to the purchase of the factory two decades ago. Obajana Cement, previously owned by the state government, was sold to Dangote Cement in 2002.
“It was found that no valid acquisition took place, as Dangote could not show evidence of what was paid as consideration for the acquisition,” the Kogi State Commissioner for Information Kingsley Fanwo told journalists.
“The House of Assembly, therefore, ordered the closure of the company pending when they are able to present it with credible evidence of a valid acquisition,” Mr Fanwo said, noting the decision became necessary following delay by Dangote to meet the lawmakers.
A separate document endorsed by the commissioner said a youth suffered gunshot injuries after gunmen hired by the factory opened fire.
“Today’s operation at Obajana has further opened the eyes of the State Government to the criminal hub that Obajana is fast becoming with the level of arms and ammunition deployed by hoodlums hired to stop the sealing of the company as directed by the State House of Assembly,” it said.
No fewer than seven staff of Dangote Cement Company Obajana in Kogi State have been shot and several others injured as armed members of Kogi State Vigilante Service stormed the cement factory yesterday.
It was gathered that they were there to enforce the order of the state governor, Yahaya Bello. A statement from Dangote Group’s Corporate Communications Department stated that the vigilantes group was led by the state director-general of Lands, Nasir Ochi, security adviser to the governor, Com. Jerry Omodara (rtd) and other top officials of Kogi State government.
The vigilante group members were said to be wielding arms of different kinds including local and assorted rifles as residents and passersby scamper for safety.
As of the time of filing this report some seven staff members of the cement company were being attended to at the hospitals over the gunshot wounds inflicted on them.
While speaking with newsmen, the spokesman of the Oyo Mining host community, Mr David Oloruntoba described the act as primitive and disgraceful, saying the youths of the community can never be used, and will not take part in such ‘evil practices.’
