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Dangote: Our acquisition of Obajana Cement plant followed Due Process
Nasiru Yusuf
The management of Dangote Industries Limited has insisted that its acquisition of the Obajana Cement Plc in 2002 followed due process, contrary to claims by the Kogi State government.
KANO FOCUS reports that the conglomerate asserted that Kogi State government has no equity interest in Obajana Cement Plc.
It also stated that the company as a responsible corporate organisation has been paying relevant State taxes, levies and charges to the Kogi State government since 2007 when production commenced in the acquired cement plant.
These clarifications were contained in a statement issued by the management of Dangote Industries Limited titled ‘Obajana Cement Plant: Separating Facts from Fiction.’
According to the statement, “This is a statement issued for the sole purpose of addressing the concerns and apprehensions of the stakeholders of Dangote Cement Plc (DCP) especially the over twenty-two thousand people it employs directly, and more indirectly, as well as thousands of contractors, wholesalers, users of our products, our financiers and shareholders.
“At a time of significant economic challenges that we face as a nation, we believe all must be done to keep our economy running effectively, our people employed, businesses that depend on us thriving and not discourage those who take the risks of needed, lawful and significant investments in our economy. The shutdown of our plant has materially jeopardised the economic wellbeing of our country without any regard for its significant consequences.
“Whilst reserving our rights to proceed to arbitration in accordance with the extant agreement, we have reported the unlawful invasion by KSG and the consequential adverse effects of same to all the relevant authorities, including the Federal Government of Nigeria who has now intervened in the matter. It is hoped that the dispute resolution process we have initiated will quickly resolve the disputes and allow us to focus on our business without distraction and continue our significant contribution to our national economy. It is in this context that we state in brief as follows”, the company added.
According to the statement, “The Obajana Cement Plant is one of the most critical components of economic activity in the nation, being one of the highest taxpayers, and vehicle for one of the largest companies invested in by thousands of Nigerian and foreign investors. Its most important assets are (1) its land, the plant and machinery thereon, and (2) the vast limestone deposit covered by mining leases issued under licence by the Federal Government of Nigeria (FGN).”
The company clarified that the land on which Obajana Cement Plant is built was solely acquired by Dangote Industries Limited (DIL) in 2003.
“The land on which the Obajana Cement Plant is built was acquired solely by Dangote Industries Limited (DIL) in 2003, well after it had acquired the shares in Obajana Cement Company in 2002, following the legally binding agreement it entered into with KSG to invest in Kogi State. DIL was issued three Certificates of Occupancy in its name after payment of necessary fees and compensation to landowners.
“The plant and machinery were conceived, designed, procured, built, and paid for solely by DIL, again, well after it acquired the shares in Obajana Cement Company. The limestone and other minerals used by the Obajana Cement Plant, by the provisions of the Nigerian Constitution belonged to the Federation, with authority only in the FGN and not the State in which the minerals are situated, to grant licences to extract and mine the resources”, the company explained.
“After the agreement with the KSG, DIL applied for and obtained mining leases over the said limestone from FGN, at its cost and has complied with the terms of the leases since inception. The Government of Kogi State had no minerals to give, had no assets to give, and only invited DIL as most responsible governments do to come into the State and invest in a manner that will create employment, develop the State, and earn it taxes”, the statement added.
In a section of the statement titled, ‘The Incorporation of OCP and the Invitation by KSG’, the company noted that, “In 1992, the Kogi State Government incorporated Obajana Cement PLC (OCP) as a public limited liability company. Sometime in early 2002, about 10 years after the incorporation of the OCP (which still had no assets or operations as of that time), KSG invited Dangote Industries Limited (DIL) to take the opportunity of the significant limestone deposit in the State by establishing a cement plant in the State.
“Following several engagements and assessment of the viability of the proposed opportunity, DIL agreed that it would establish a cement plant in Kogi State and provide the entirety of the substantial capital required for the investment.
“DIL also agreed, following a specific request by KSG, to use the OCP name (albeit only existing on paper as of that time, and without any assets or operations) for the time being, as the vehicle for this investment. On 30 July 2002, KSG and DIL entered into a binding agreement to document their understanding. The agreement was amended in 2003 and remains binding on, and legally enforceable by, the parties to same,” the statement explained.
On the issue of an Agreement between Dangote and Kogi State Government, the statement gave a summary. It noted that “it was agreed, inter alia, that: DIL would establish a cement plant with a capacity of 3,500,000 metric tonnes per annum; DIL shall hold 100% of the shareholding in OCP, and source for all the funds required to develop the cement plant; KSG shall have the option to acquire 5% equity shareholding in OCP within 5 years; and KSG shall grant tax relief and exemption from levies and other charges by KSG for a period of seven (7) years from the date of commencement of production.
“Consistent with the terms of agreement, DIL sourced for 100% of the funds that was used to develop the plant without any contribution from KSG. In line with its rights, ensuring alignment with the Dangote Brand, as part of internal restructuring and for better market recognition the name of OCP was changed to Dangote Cement Plc in 2010, and a number of other significant cement companies (such as the Benue Cement Company) owned by DIL were merged with OCP to become the enlarged Dangote Cement Plc”, the statement added.
On the issues of ‘Execution of the Agreement: The Plant, Taxes, Shares & Dividends’, the statement noted, “DIL assiduously and at significant cost met all the terms of the agreement between it and KSG in relation to OCP. It built the cement factory, much bigger and better than envisaged.
“KSG could not meet its financial obligations of contributing to the funding the plant in any form; neither could KSG fund acquisition of 5% equity shares in OCP when it was asked on a number of occasions to exercise the purchase option.
“KSG also did not meet its obligations to grant waiver of taxes, charges and levies that it could charge the operations, affairs and activities of OCP. Rather despite being entitled (under the terms of the agreement with KSG) to tax relief and exemption from charges and levies by KSG for a period of seven (7) years from the date of commencement of production, OCP (and now DCP) has paid all due sub-sovereign taxes, levies and charges to KSG since it commenced production in 2007.
“KSG does not have any form of investment or equity stake in OCP, so no dividend or other economic and/or shareholding rights whatsoever could have accrued to it from the operations of the company”, the statement added.
On the issue of the Acquisition of the Plant Site, the statement noted that, “After the agreement between DIL and KSG in 2002, DIL in 2003, applied to KSG for the acquisition of land for the plant site, and this application was granted with the issuance of three Certificates of Occupancy to DIL. DIL to the knowledge of KSG, paid substantive compensation to Obajana Farmland Owners located within the two (2) square kilometres plant site.
“Subsequently, in September 2004, DIL, in good faith, applied to the State Governor for the statutory consent for DIL to assign the plant site to OCP being DIL’s investment vehicle. This consent request was granted by the State Governor and the appropriate consent fees were paid by DIL”, it added.
Shedding more light on the company’s engagement with Kogi State Government, the statement explained that, “The investment of DIL in Kogi State through OCP was at the instance of the duly constituted government of Kogi State, done in accordance with the law of the State and all enabling laws in that regard, and the transaction documents were effectively, lawfully and duly executed by the Governor and Attorney General of the State (at the time), after internal approvals were obtained within the government.
“Since the inception of Alhaji Yahaya Bello’s administration in 2016, and regardless that government is a continuum, we have had series of enquiries about the ownership structure of the Dangote Cement PLC as it relates to the alleged interest of KSG; and had several engagements with the officers of the State government including Governor Yahaya Bello. At all of these engagements we have provided all the details and information supported by relevant documents, required by the Government and the State House of Assembly to confirm our lawful investment.
“For instance, in 2017, we were invited by the Judicial Commission of Inquiry, and we made our submission to the commission with relevant documents to support our position. We are yet to receive any feedback from the Judicial Commission of Inquiry. While still waiting to hear of the report of the Inquiry, we were invited by the State House of Assembly on the same matter earlier this year, and again, we provided evidence in support of our position that KSG does not have any equity or other interest in OCP or DCP.
“On Wednesday 5 October 2022, hundreds of dangerously armed men, other than law enforcement officers, attacked our cement plant in Obajana, Kogi State, destroyed our property, inflicted grievous injuries on many of our employees, and shutdown operations at the plant. KSG has admitted that the armed invaders acted on its instructions, and in furtherance of the recent enquiry by the Kogi State House of Assembly in connection with the ownership of the Obajana Cement Plant.
“Curiously, on 6 October 2022, a day after the shutdown of our facility in Obajana on the orders of KSG, Governor Bello addressed the public and announced that a Specialised Technical Committee which was set up as part of the recommendations of the Judicial Commission of Inquiry had just presented its recommendations, which have been accepted by KSG. This statement makes it abundantly clear that the shutdown of DCP’s plant occurred regardless of the Governor’s own confirmation that implementation of the recommendations of the Specialised Technical Committee was still pending”, the statement noted.
Focusing on the current state of play, the company said, “Whilst we do not want to speculate on the motivation for the spurious claims being made by KSG in relation to the ownership of the Company, which have resulted in the unfortunate unlawful forcible closure and damage of our plant, and injury of several people, we condemn in strongest possible terms, the unlawful shutdown of our plant by KSG sponsored armed-thugs, the damage to our property (including the looting of large sum of money kept in the office), and grievous injury inflicted on our employees by them.
“This disruption of operations at the plant has caused loss of revenue not only to our company and its customers but has also adversely impacted revenue due to both the Federal and State governments. It has also occasioned loss of jobs for the teeming youths who are daily paid workers that throng our plant for their daily sustenance. Appealing for overall peace and calm,” the statement noted.
“We implore all our stakeholders, namely shareholders, customers, suppliers, employees, and the entire community of Obajana and Kogi State at large to remain calm while we follow the legitimate and lawful process to resolve this matter. We shall keep our stakeholders duly updated whilst we remain confident that the statutory and contractual rights of DIL shall be upheld by these legal processes which we have initiated.”
Nasiru Yusuf Ibrahim
Nafisah Yusuf Hassan, a magistrate in Kano State, has been recommended for appointment as a judge of the Kano State High Court by the National Judicial Council (NJC).
KANO FOCUS reports that Hassan is among four judicial officers from Kano State recommended for elevation to the High Court bench out of 28 candidates selected nationwide.
The other nominees are Halima Yahuza Ahmad, Abdullahi Abdulsalam Bature and Musa Ibrahim Umar.
The NJC disclosed the recommendations in a statement issued by its Deputy Director of Information, Kemi Babalola-Ogedengbe, following its consideration of candidates for judicial appointments across the country.
The council said all recommended candidates were expected to be sworn in by their respective state governors without delay.
Hassan’s recommendation follows her years of service in the Kano State judiciary, where she has reportedly distinguished herself through diligence, professionalism and careful handling of cases.
She has been commended for her commitment to judicial ethics, diligence and fairness in the discharge of her responsibilities, achievements that contributed to her career progression within the judiciary.
Her elevation is part of a broader development in the Kano State judiciary, with four magistrates from the state successfully scaling the selection process for appointment to the High Court.
The four nominees were reportedly assessed during the selection exercise and demonstrated strong professional competence, while their service records were found to be free of adverse remarks.
Their recommendation marks a significant step in their judicial careers and is expected to strengthen the judicial workforce in Kano State upon their formal appointment.
Nasiru Yusuf Ibrahim
The Kano State Accountability Forum on Education (K-SAFE) says it has tracked nearly 1,000 education projects across the state as part of efforts to promote transparency, accountability and effective service delivery in the education sector.
KANO FOCUS the coalition’s Co-Chair, Dr Auwalu Halilu, disclosed this on Wednesday during an advocacy visit to the Kano State Ministry of Public Procurement and Project Monitoring.
Dr Halilu said K-SAFE had monitored projects in more than six local government areas, covering interventions implemented by the State Universal Basic Education Board (SUBEB), Kano State Senior Secondary Education Management Board and Local Education Authorities (LEAs).
He explained that the monitoring exercise involved physical inspections and documentation of projects through photographs, videos and geographical locations.
According to him, reports of the findings had been submitted to relevant ministries, departments and agencies (MDAs), highlighting projects that met required standards and those requiring further attention.
He cited Rimin Gado Local Government Area, where the coalition tracked more than 80 education projects, adding that it planned to extend the exercise to all 44 local government areas of the state.
The K-SAFE Co-Chair said the visit was aimed at presenting the coalition’s activities to the ministry and exploring areas of collaboration in procurement and project monitoring.
He called for the inclusion of civil society organisations in procurement and monitoring processes, particularly tender board activities and field inspections, to strengthen independent oversight and provide them with firsthand information on government projects.
Dr Halilu also requested the ministry’s support in organising capacity-building programmes for civil society organisations on procurement procedures, due process, project standardisation, monitoring and evaluation.
He said such training would enhance civil society organisations’ understanding of procurement regulations and the technical requirements guiding project implementation.
Responding, the Commissioner for Public Procurement and Project Monitoring, Dr Nura Iro Ma’aji, welcomed the delegation and acknowledged the coalition’s contributions to supporting the state government’s efforts in the education sector.
He expressed the ministry’s readiness to collaborate with K-SAFE through information sharing and other relevant engagements to strengthen accountability and ensure compliance with due process.
“From our side, we are ready to work together because we know what they have been doing to support Kano State Government in the education sector,” he said.
Dr Halilu further disclosed that the coalition and its partner organisations had carried out the monitoring exercise without financial sponsorship, describing it as a demonstration of their commitment to transparency and accountability.
He reaffirmed K-SAFE’s commitment to sustaining engagement with relevant government agencies, civil society organisations and the media to strengthen oversight of education projects across Kano State.
Ibrahim Khalil
Government Secondary School (GSS) Army Day Bukavu has emerged champion in both the male and female categories of the maiden Kano State Secondary Schools Tug of War Competition.
KANO FOCUS reports that the school clinched the double victory at the competition, which ended on Wednesday at the Kano Pillars Stadium, Sabon Gari, Kano.
Governors College finished as runners-up in the male category, while Government Girls College (GGC) Kano secured second position in the female category.
The competition was organised by the Kano State Tug of War Association in collaboration with the state Ministry of Education, the National Drug Law Enforcement Agency (NDLEA) and the Kano State Sports Commission.
The maiden championship brought together secondary school students to promote teamwork, discipline, unity and sportsmanship, while raising awareness about the dangers of drug abuse.
Speaking at the closing ceremony, the Vice Chairman of the Kano State Tug of War Association, Jamilu Uba Adamu, described the competition as a successful initiative that had achieved its objectives.
He commended the Ministry of Education, Sports Commission, NDLEA, Gongoni Company Limited and MAGZO Pharmaceutical for supporting the event, particularly through the provision of T-shirts and Pocari Sweat drinks.
Also speaking, the Secretary of the Kano State Tug of War Association, Bashir Muhammad Sulaiman, who represented the Executive Chairman of the Sports Commission, Muhammad Tukur Babangida, reaffirmed the commission’s commitment to developing grassroots and school sports.
He said the initiative would help identify and nurture young sporting talents across the state.
The closing ceremony was attended by a member of the Kano State Football Association Board, Rilwanu Idris Malikawa Garu, representatives of the Ministry of Education, NDLEA, the Sports Commission and other stakeholders in the sports sector.
The organisers congratulated the winning schools and commended all participating institutions and partners for contributing to the success of the maiden edition.
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