House of Representatives, Wednesday, said there might be no budgetary allocation for the Bureau of Public Enterprise (BPE) in 2022 if it fails to pay outstanding balance of N189 million to Jorotom, the investor that acquired National Clearing and Forwarding Agency (NACFA) during privatisation.
House committee on Privatisation and Commercialisation which issued the threat at a public hearing said that BPE has also refused to appear before it over the dispute on NACFA properties.
The Committee also advised Assets Management Company of Nigeria (AMCON), Messrs Jorotom International Agency Limited, Ministry of Defence and other parties in the dispute to take the option of resolving the issue out of court.
It will be recalled that the dispute was about the sealing of Jorotom in Lagos and a land on plot GKN 204, old Airport road Kano currently occupied by the Nigerian army.
The land was among the assets and liabilities inherited by the company after it acquired NACFA and it’s 3.484 hectares of land in Kano.
Jorotom International Agency Limited had acquired 100 percent of NACFA through a core investor sale strategy in 2006 at the sum of 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.
Following the bank loan and the interest therefrom, AMCON sealed the company’s lagos property just as the military occupied its property.
AMCON was later to approach a Federal High Court and the Supreme Court against the company for failing to pay the its liabilities.
Speaking at the Committee hearing, General Manager of the company, Adeniyi Dare said the sealing of the company has led to loss of over 1000 jobs, noting that the military has been occupying its property in Kano since 2006.
He said, “Ministry of Defence showed interest to buy the land but stated that, they undervalued the land and offered N2.2 billion in 2016. Another revaluation was done for the property in 2020 for N32 billion. N2.2 billion quoted, was payment for compensation demanded by the company from Ministry of Defence out of which only N125 million was paid to them. While signing the MOU on the acquisition of NACFA, it was agreed that, the BPE will reimburse the core investor of the sum of 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.”
The company also presented a letter to the Minister of Defence dated August 2nd, 2021 before the committee, saying it received N125 million out of the N2.2 billion compensation.
But in his remarks, the Permanent Secretary, Ministry of Defence, Musa Istifanus said, that the payment paid in bits due to poor budgetary allocations.
Istifanus added that the ministry was owning billions of Naira to various property owners whose lands were acquired by the military and approvals given by the Federal Ministry of Works and Housing for payment.
He appealed for increase in their allocation to help offset the debts.
Similarly, AMCON representative however said they had the backing of the law in their activities.
Reacting, a member of the committee, Hon. Uzoma Nkem-Abonta insisted that AMCON invested in Polaris Bank and became part owners of the loan.
Another member of the committee, Hon. Benjamin Mzondu however advised the parties to amicably resolve the issues, saying it had lingered for a long time.
Ruling on the matter, Deputy Chairman of the committee, Hon. Kolade Vakinjo who presided asked BPE to pay the N189 million to Jorotom, directing the MD/CEO of AMCON to appear before the committee with all documents on the loan purchase agreements.