Delta Steel Suffers Setback As Vaswani Brothers Abandon Plant

Sunil Vaswani

The Vaswani Brothers have again drawn blood from the economic wellbeing of Nigeria by completely abandoning Delta Steel Company Aladja which they acquired three years ago through their company, Premium Steel and Mining Limited, an offshoot of Stallion Group.

Premium Steel and Mining Limited bought Delta Steel in June 2015 in a transaction that raised eyebrows and condemnations from Nigerians which led to investigations by anti-corruption agencies and different committees of the National Assembly all of which recommended the termination of the contract.

But like the proverbial cat with nine lives, the Vaswani Brothers were able to push their way through and took over the plant.

However, since the past three years that Premium Steel took over company, it has not added any value to Delta Steel plant as no productive activity has ever taken place at the site, our correspondent learnt.

While the entire place has been overtaken by weeds and grasses, both the housing estates and the company’s staff schools are a shadow of themselves while the workers and their families wallow in darkness due to non-payment of electricity bills, a staffer told The WHISTLER on condition of anonymity.

Recently, the Power Holding Company of Nigeria (PHCN) finally cut off power supply to the steel plant and its staff housing estates.

The aggrieved staffer disclosed that all along that Premium Steel pretended to be in charge of the steel company, the Federal government was and is still responsible for payment of workers’ salaries, an obligation that is squarely that of the investor and spelt out in the purchase agreement.

The ugly development in Delta Steel had in the past led to several petitions from concerned Nigerians especially the workers and trade union leaders in the company who have on different occasions, staged protests demanding action against the company.

The workers had among other things alleged that the only thing achieved for the past three years is “the removal of Delta Steel signboard and its replacement with Premium Steel name and logo.”

The cry of the workers and concerns raised by Nigerians against Premium Steel seem to have been falling on the surface of the rock. To make matters worse, the company has finally abandoned the plant by withdrawing all of the few management staff it has been using to hoodwink Nigerians of its presence in Delta Steel.

It would be recalled that an online media platform had in 2016 reported that the Federal Government ordered the Economic and Financial Crimes Commission (EFCC) to probe the activities of Premium Steel in Delta Steel but like many other issues involving the Vaswanis, the outcome of the probe was not made public.

The report stated that, “The Federal government was said to have expressed shock that a very strategic public infrastructure like Delta Steel could be handed over to a company like Stallion Group which has been involved or implicated in various shady deals in Nigeria over the years,”

According to the report, the sale of Delta Steel to Premium Steel by the Assets Management Company of Nigeria (AMCON) had generated national uproar following alarm raised by one Dr. Ajibola Aribisala, a lawyer and a Senior Advocate of Nigeria (SAN) who was appointed as the Receiver/Manager of Delta Steel Company by AMCON, and therefore was supposed to be at the forefront of the transaction on the steel company.

In the report, Aribisala had issued several press statements many of them placed as open advertorials in major newspapers, and accused the former AMCON management of undue interest in the deal involving Premium Steel and Mines Limited.

He told Nigerians and the government that a Chinese consortium, China Polaris Technologies Company Limited was ready to buy Delta Steel for N33billion but that AMCON rather sold the company to Sunil Vaswani’s Premium Steel and Mines Limited for N28billion instead.

Worse still, Aribisala said that while the Chinese company was ready to pay all the N33billion at once, Vaswani promised to pay 10percent of his offer within 30 days and to spread the remainder for a period of 8years with a moratorium of one year. He therefore accused Chike Obi, former AMCON boss, of being compromised to have opted for Vaswani’s Premium Steel with its outrageous offer instead of the Chinese company.

Aribisala said that it was his refusal to accept Vaswani’s offer that made AMCON to remove him while quickly bringing in one Dr. Joseph Nwokebike, an alleged crony of Chike Obi as new Receiver/Manager.

Aribisala revealed that Vaswani had in 2013 cooked up a company called West African Mines and Steel Company Limited and had tried to use the company to take over Delta Steel but failed.

He said that Vaswani, having struck a deal with the AMCON Chief Executive in principle, again concocted another company called Premium Steel and Mines Limited in December 2014, through which Delta Steel was handed over to him.

“It is also interesting to note that the said Premium Steel and Mines Ltd was only incorporated, for the above purpose, on December 14, 2014, when the bidding was already in full progress, thus, the company did not submit any bid on the sale of the assets, yet it was the same company that the assets of Delta Steel Company Plc were purportedly sold to. The essence of AMCON’s acquisition of bad debts from commercial banks, along with the collateral securities, is to confer on AMCON the assurances that in the event of failure of the borrower, in the case of Delta Steel Company Plc, to discharge the indebtedness, AMCON can fall back on the pledged securities to recover the indebtedness by virtue of section 34 of the Asset Management Corporation Act,” Aribisala had stated.

He said that AMCON management was “unduly influenced” to sale Delta Steel to Premium Steel and Mines Ltd against the interest of Nigeria.

“Also, by Section 43(3) of the AMCON Act, all officers of AMCON including the Managing Director, Mr. Mustafa Chike-Obi are obligated to act in good faith, in the exercise of their duties, powers and obligations imposed on AMCON or nay of its directors. Furthermore, by Section 15(5) of the Constitution of the Federal Republic of Nigeria 1999, AMCON being an agency of the Federal Government of Nigeria, is obligated to avoid corrupt practices and abuse of power.”

He further said that AMCON’s sale of Delta Steel to Premium Steel and Mines, with a promise that payment will be made by instalments when there is a buyer willing to pay N33billion at once, did not only deviate from the provisions of Section 15(5) of the Constitution, but violated Section 4(9b) and (c) of the AMCON Act and as well amounts to economic sabotage or economic crime since the proceeds of the sale which is quite below the sum of N33billion which China Polaris Technologies Company Limited, the highest bidder would have paid, belongs to the Federal Government of Nigeria by virtue of AMCON being a Federal Government agency.

Aribisala has called on President Muhammadu Buhari to terminate the sale of Delta Steel to Premium Steel and Mines Ltd adding that it was bad business for the country.

Delta Steel is not the only Nigerian company acquired by the Vaswanis and deliberately abandoned to rot away. They had earlier acquired Volkswagen of Nigeria which became unviable.

The scandal that arose from the manner in which the Vaswanis acquired Volkswagen of Nigeria so much offended President Obasanjo that he ordered Nuhu Ribadu to deport them which was executed.

While they were outside, they, in February 2005, incorporated a Barbedos Virgin Island (BVI) in the UK and partnered Barbedos Nigeria Limited owned by Kashim Shettima to acquire the remaining 35 percent Federal Government stake on Volkswagen.

When a case arose between them and Shettima, the Nigerian businessman in a petition to the Federal Government stated that the Vaswanis cheated Nigeria by short-circuiting due process under a company called AVOLON to acquire Germany’s 51 percent in Volkswagen which was said to be a breach of the pre-emptive rights of Federal Government as obtained in Section 151 of the Companies and Allied Matters Act, 1990.

After acquiring Volkswagen through their BVI, the Vaswanis completely shut down the plant and turned the vast premises of the once thriving company to a bonded warehouse where they store and hoard imported vegetable oil, rice, sugar, fertilisers, thousands of assorted cars and containers among other items.

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