Home Finance How not to encourage foreign investment…. The Edo Cement Coy example

How not to encourage foreign investment…. The Edo Cement Coy example

by Business News Report

By Godfrey Ikhemuemhe,Emma Uja and Franklin Alli
A serious communual clash was recently averted between the Igbirra community in Kogi State and Okpella community in Edo State as a result of an apparent misguided decision by the Ministry of Solid Minerals Development to share Obu quarry between Ado Ibrahim & Co and Edo Cement Company. The contest over the quarry has lead to the failed privatization of the cement company by the Edo State government as the core investor Scancem of Norway left site last January.
In specific terms, the issue that has stalled the privatization of the cement company is the mining lease over Obu marble deposit where the cement company was supposed to get the bulk of its raw materials. The deposit has been a subject of litigation between Ado Ibrahim, the Ohinoyi of Igbirra land represented by his company, Ado Ibrahim & Co and the Okpella Community in Okpella. But several judgements in the past had denied that Ado Ibrahim & Co had any leases to the deposit under contest. In one of such judgements in 1995, the Federal High Court in Suit No FHC/B/42/94, H.R.H. Alhaji A.Y.E. Dirisu & 3 ORS V. Ado Ibrahim Company Ltd, & 7 ORS, held on April 1995 that Ado Ibrahim &Co held no leases of any nature on any part of Okpella. The Attorney General of the Federation and the Ministry of Mines were also defendants in the case.
But on the 16th of March 2005, one Engr. Chris Ushedo, Assistant Director (Mines) who said he was acting on behalf of the Minister of Solid Minerals, Elder Odion Ugbesia, directed that the Obu quarry be divided into two equal halves between the people of Okpella and Ado Ibrahim and Co.
Ushedo, in the letter Ref. No MSMD/MN/CO.0105/s.1/126, which was obtained from the Ministry, gave as reason for the action, a purported earlier agreement between the two parties in a meeting with the Minister.

But the action did not go down well with the Okpella people who have over the years spent a lot of money in litigations to ensure that they got full possession of Obu quarry, which they claimed, belonged to them. Vanguard gathered that they had indeed mobilised to deal a heavy blow on the Igbirras who accompanied the Ministry team from Abuja for the sharing exercise but for the timely intervention of His Royal Majesty, the Okuopkellagbe of Okpella, Alh. A.Y.E.Dirisu.
Speaking later, the Okuopkellagbe who led the team to the said meeting, said that the meeting with the minister never agreed on the sharing of Okpella land, stressing that the meeting was actually deadlocked. He also indicated that from the action of the minister, he had consistently shown that he was biased in favour of Ado Ibrahim & Co.
The issue of the failed privatisation of Edo Cement Company is a pathetic one. In response to the stringent calls by the President across the globe for investors to come and invest in Nigeria, Scancem, a member of the Heidelberg group had bought up the former Bendel Cement Company Okpella for $4million (about N580 million). The new company that sprang up from the ashes of Bendel Cement Company was Edo Cement Company with Scancem as core investor since 2002. In 2003, the foreign investors took control of the company, and had expended another N500 million in rehabilitating the company and paying the salaries of over 100 staff members.
While investing so much into a venture for which they understood its potentials having run another of such plant in Sokoto, Northern Nigeria successfully, Scancem did not know that danger was looming ahead. The lease for the main limestone deposit upon which the success of its venture lay was not issued by the Ministry of Solid Minerals despite the assurances by the Edo State government during negotiations for the purchase of the company that the lease was theirs for the asking.
Despite repeated pleas with the Federal Ministry of Solid Minerals by the Edo State government, the Okpella people and other well meaning Nigerians, the ministry has refused to sign the mining lease for Edo Cement Company, claiming that it is a subject of litigation between Ado Ibrahim & Co and the Okpella community. Indeed the Deputy Governor of the State, Mike Ogiadomhe, had led a delegation including His Royal Majesty, The Okuokpellagbe of Okpella to the Minister this year without making any impression on him on the need to issue the mining lease to the Edo Cement Company so that it can commence operations.
In a swift reaction to the letter asking for the sharing of the quarry site between Okpella and Ado Ibrahim &Co, the Okpella community through their lawyers have served notice on the Minister that it might be forced to seek legal redress if he does not desist from ‘doing anything that could result to ridiculing the judiciary, the third arm of government and bring it to public disrepute’.
In a letter from Okpella Consortium, a consortium of legal practitioners, the Minister’s attention was drawn to the Federal High Court judgement of 1995, which established that Ado Ibrahim & Co had no leases on Obu quarry.
Vanguard gathered that in one of the meetings by the contending parties with the Minister, Alhaji Ado Ibrahim had actually been asked to produce the lease which he purported to have and he could not. He however told the Minister that he had gone on appeal on the 1995 High Court judgement that declared his leases non-existent and or null and void and illegal if existing.
And when the Minister asked the Ohinoyi why summons have not been served on the defendants about ten years after the Federal high Court judgement, he had no ready response.
The Ohinoyi presented the same alibi last week when Vanguard met him on the issue at Okene. He told our correspondent that he would not grant an interview on the issue because it was in court. But when asked at what Court of Appeal he had the case, he gave the same excuse. Even when our correspondent reminded the Ohinoyi that telling him the court he had filed the case does not amount to contempt of court, he would not bulge.
Such antics as this have made the Okpella community to believe that the Court of Appeal case, which Ado Abraham is peddling, may be non-existent.
Barister Ayuba Giwa, one of the counsels to the community said that he would be surprised if the case actually existed as none of the defendants has been served ten years after the Federal High Court case on which the appeal is based.
In deed in 1995, when the Edo State government wanted to privatise the cement company, Ado Ibrahim & Co had gone to court, instituting winding up petition against the company on the disputed mining lease. The petition was based on an alleged indebtedness of the company to Ado Ibrahim and Co, AICO, on the basis of the purported leases. Edo Cement Company through the assistance of the Okpella community resisted this claim as dubious and the Federal high Court agreed with the defence. AICO went on an appeal and the Court of Appeal also dismissed it in Appeal no CA/B/150/96.
Also in Alh. Ado Ibrahim & Co Ltd. VS Eldestein (Nig.) Ltd 2003, the Court of Appeal again dismissed AICO’s claim to mining rights in Okpella as bogus and false.
Only recently in suit no FHC/B/CS/12/2004, in a case between Cambut Ltd. Vs Alh. Ado Ibrahim & Co Ltd., the Federal High Court restrained AICO from claims over mining rights in Obu.
Giving this situation, officials of the Edo Cement Company are irked that despite the seeming weakness in the case of the contestant, the lease has not been issued. They even challenged the Minister to issue the lease so that whoever does not feel satisfied can go to court since there is already an existing court judgement upon which he can justify his action. But all these advise seem not to appeal to the Minister.
All these have given credibility to the assertion by some people in Edo State that the issue of the lease for Edo Cement Company goes beyond who is right. There are strong feelings in the State that the Anenih/Igbinedion tussle for the control of Edo State has crept into the issue.
Vanguard was told that the Anenih loyalist in government and important places think that if Edo Cement Company is successfully privatised, it would be to the credit of the Igbinedion administration and so must not be allowed to happen.
Indeed some of the Anenih loyalists were said to have boosted to some indegenes of Okpella recently that the mining lease would only be released to the company by 2007 after elections would have been fought and won in the State.
Elder Ugbesia, a former Personal Assistant to Chief Tony Anenih when he was Minister of Works, is an avowed Anenih loyalist and is alleged to be very strategic in this regard. As Minister of Solid Minerals, he is alleged to be in a position to make this calculation happen.
But as strong as this allegation may be, the Okuokpellagbe of Okpella does not believe it. He however says he would explore the possibility of discussing the issue with Chief Anenih for an amicable resolution.
Barrister Ayuba Giwa,who is part of the legal consortium handling the case says it was high time the community commenced contempt proceedings against the Minister on the issue. He does not see how the issue can be attributed to the Anenih/Igbinedion politics in Edo state.
When Vanguard confronted officials of the Ministry of Solid Minerals with these allegations last week, the official response was neither here nor there.
The Ministry officials debunked the claims, saying that the rule in the Ministry concerning the issuance of leases for mining activities is that once an application for a mining lease has been properly filed, the lease would be issued within two weeks.
He indeed said that once such license is not issued within the stipulated time, such applicants should approach the Ministry with a proof of the application for relevant action. Yet it is now more than one year since the Ministry denied Edo Cement Company the lease it has applied for with the consent of the community where the limestone ,mine is situated.
While the politics around the privatization of Edo Cement Company gets complicated by the day, it is Scancem of Norway that feels the pinch with its investment of about N1 billion almost going down the drain. This, at a time President Obasanjo is going around the world with a plate in hand practically begging investors to come to Nigeria.

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