Jimoh Ibrahim Faces Trouble At The Senate Over Privatization Issue

August 11, 2011 – Jimoh Ibrahim Faces Trouble At The Senate Over Privatization Issue

Revelations at a continued Senate public hearing investigating the sales of various government enterprises by the Bureau for Public Enterprises (BPE) indicate that the Nigerian Re-Insurance Company, like most companies investigated by the d hoc committee so far, may have been undervalued before it was sold to the Global Fleet Company, its core investors.

Pensioners of the Nigeria Re-Insurance Company, on Wednesday, at the hearing, said that while Global Fleet bought the  company at N1 billion, they re-valued the company shortly after taking over and used its assets to acquire a Union Bank loan of N46 billion without physically adding any value to the company.

Ochigbo Desmond, leader of the pensioner’s union said that Global Fleet also sold some of the assets of the company without returning the sales value to the federal government. The pensioners claimed that the new owners sold the Isolo Warehouse of Nigeria Re-Insurance for N200 million in an asset stripping stunt and that Global Feet failed to meet the share purchase agreement, especially, payment of pensions.

Bolanle Onagoruwa, the Director General of the BPE denied knowledge of the pensioners’ claims. She said the BPE categorises Nigeria Re-Insurance Company as performing since it is making profit and employing more staff.

She, however, stated that Nigeria Re-Insurance was last monitored in 2009 because the management of the company barred the BPE from assessing company information detailing their activities since they acquired the company.

Similar allegations were also leveled against Global Fleet in its purchase of Nigeria Insurance Company of Nigeria (NICON). Dickson Osuala, a petitioner representing Assurance Acquisition Limited (AAL), claimed that Jimoh Ibrahim, the owner of Global Fleet, forged company records pre-qualifying him for the bid to buy NICON.
He described Ibrahim, whom was hitherto their business partner, as an imposter. According to him, the Global Fleet boss posed as an agent of the presidency to buy into the board of AAL, the preferred bidder for NICON at the time, and shortly thereafter, forged company resolutions claiming that two AAL directors have stepped down for him.“He subsequently took over the company, changed the name and bought NICON,” he said.

Emmanuel Jegede, the Managing Director of NICON, could not respond to Dickson’s allegations. He, however, admitted that the company has not met up with share purchase agreement, five years after they took over. Global Fleet had undertaken to meet the share purchase agreement three years after takeover.
Wednesday’s investigation of the performance of NICON Luxury Hotel, which was also bought by Global Fleet, also showed that it has also failed to meet up with the share purchase agreement.

The six days public investigative hearing continues on Thursday when the ad hoc committee will admit Nasir Elrufai, the foremost Director General of BPE, to testify on the sales of government enterprises he supervised.