- Category: Latest
- Published on Monday, 09 July 2012 17:31
- Written by Elombah.com
Nigeria's supreme court has overturned the sale of a state-owned aluminum processing plant to the world's largest aluminum producer, news agencies report. Justice Afolabiyi Fabiyi ruled Friday that the sale five years ago of Aluminum Smelter Company of Nigeria to Moscow-based United Company RUSAL PLC was illegal.
He said that the preferred bidder was wrongfully disqualified. He said BFI Group offered $410 million and that RUSAL offered $205 million.
BFI Group sued Nigeria's Bureau for Public Enterprise over the disqualification of its bid in 2004.
An Associated press report says a spokesman for the bureau declined to immediately comment Monday, but a Reuters report said spokesman for BPE said they would wait until they received the judgment before making further comment but they would adhere to any ruling passed by a Nigerian court.
RUSAL says on its website that it acquired a controlling stake of ALSCON in 2007 for around $205 million and now owns 85 percent of its assets with the remaining stake belonging to the Nigerian government.
It says it has since modernized the facility which it describes as "one of its key African assets."
The Russian firm said the judgment would not affect its ownership of ALSCON and that operations continued as normal.
U.S. based private firm BFI Group was the preferred bidder for ALSCON in 2004 after offering $410 million, but was later disqualified by the Bureau of Public Enterprises (BPE), the Nigerian government agency that handled the privatization of state enterprises.
BFI, headed by American-Nigerian Reuben Jaja, took BPE to court, saying the agency breached its contract.
The supreme court ruling last week ordered that BPE revert to the original preferred bidder and BFI Group pay the agreed price of $410 million.
"There is no evidence on record that RUSAL has taken possession of ALSCON," Justice John Fabiyi said in the lead judgment on Monday.
"The appellant's (BFI Group) bid in the sum of $410 million was preferred by the respondent. The appellant was declared winner at the auction sale conducted on 14th June 2004."
However, RUSAL said on Monday the ruling was between BPE and BFI Group and it would retain its shares in ALSCON.
"(The) ruling of Nigeria's supreme court neither does change, nor can change the owner of ALSCON shares belonging to UC RUSAL," a company spokeswoman told Reuters on Monday.
"This litigation relates to claims of BFI Group to BPE of Nigeria, which means that it's Nigerian government to bear responsibility for such ruling and that it cannot have effect on RUSAL's ownership of ALSCON shares."
This means as far as RUSAL is concerned it still owns 85 percent of ALSCON and the ruling is against BPE, a Nigerian government agency, and not the Russian company.
ALSCON has been operated by RUSAL for more than five years and includes an aluminum smelter with annual capacity of 120,000 tonnes, a gas-fired power station and a port. It is one of the Russian's firm's key African assets.
Nigeria's senate ordered an investigation into the sale of ALSCON in 2009 because lawmakers believed the company was worth around $3 billion and was hugely undersold.