N30bn loot uncovered at Delta Steel * ICPC to clamp down on former GMDs




April 8, 2008

N30bn loot uncovered at Delta Steel

• ICPC to clamp down on former GMDs


AN end to the crisis rocking the multi-billion naira Delta Steel Company, Ovwian-Aladja, sold to Global Infrastructures (Nigeria) Limited under the privatisation regime of the Olusegun Obasanjo administration, is not yet in sight as monumental scams perpetrated by past managements of the company have now been brought to the fore with allegation of over N30billion embezzlement.

Only last week, the Federal Executive Council had taken a decision to rescind the concession agreements between the Federal Government and Global Infrastructure (Nigeria) Limited in respect of Ajaokuta and the National Iron Ore Mining Company, accusing the firm of non-compliance and asset-stripping.

President Umaru Musa Yar’Adua, after reviewing the Economic and Financial Crimes Commission (EFCC’s) interim report on the concessioning/sale of Ajaokuta Steel Company Limited, Nigeria Iron Ore Mining Company and Delta Steel Company has ordered criminal prosecution of indicted officials of the Federal Government and promoters of Global Infrastructure (Nigeria) Limited for alleged asset-stripping.

In a petition to the Vice President of the Federal Republic of Nigeria in his capacity as the Chairman on Privatisation Committee, a group that goes by the name Niger Delta Mirror chronicled the history of perceived corrupt practices that contributed largely in the initial collapse of the company which was built at the cost of about N2 billion in 1981.

According to the petitioners, more than N30 billion fraud had taken place over the years in the company before the privatisation and even after the change of ownership to Global Infrastructure as certain financial anomalies have pervaded the place in connection with staff pension entitlements.

Out of this amount, about N18 billion was said to have been deducted from staff salaries in lieu of official accommodations they occupied in the four major housing estates belonging to the Company between 1982 when DSC became fully operational and 2007. This amount collected from staff and some non-staff resident in the estates were said to have been deducted over the years by several managements but where it was paid to, has remained a mystery.

According to the petitioners, “these monies collected were never paid into any government treasury” and they had gone ahead to buttress their argument by disclosing that the company’s external estate managers, Dan Odiete & Company has records of all such deductions which can be verified by investigators.
It was also alleged that about N180 million withdrawn from the Company’s account to pay 1995 pensioners was diverted by the DSC Management under the leadership of Engr. Obi Okoye and lodged into a private fixed deposit account at Savannah Bank believably owned by Okoye’s kinsmen in other to make quick money, but unfortunately, the money got trapped there due to the collapse of the bank at the time.

Following this unseemly development, the Company’s Board of Trustees at the time, in a letter dated October 31, 2002 directed Okoye to write the Accountant-General of the Federation urging him to mediate through the Nigerian Deposit Insurance Corporation (NDIC) for the recovery of the money. Regrettably, Okoye allegedly failed to do so till he retired.

The various managements of the company over the years at different times had embarked on illegal sale of DSC properties and converting the proceeds into personal use. The Management team of Engr.Tachia Jooji was reported to have sold over 30 heavy duty electric generating sets and pocketed the money. Also, tons of granites meant for tarring of access roads in the Steel town estates were allegedly sold and money converted to private fund by Engr. Efobi while he served as the Group Managing Director of the Company.

The various Managements of DSC were also alleged to have dipped hands into monthly allocations from the Federation Account over the years such that staff salaries and allowances were owed, thus leading to the workers’ riot of 1992 during which the Management team of Engr. Abiodun Titus Abe was sacked by the workers.

The privatisation and subsequent transfer of DSC to a new ownership and Management which ought to have ended the fraudulent activities in the Company did not abate as according to the petitioners, the new management under the Group Managing Director, Dr. Samuel Nwabuokei who was one of the General Managers prior to the privatisation exercise made deductions of about N40 million between November and December 2006 from the company’s pensioners monthly pay.

These deductions were said to be in lieu of house rents, utilities and other expenditure incurred on behalf of the pensioners. However, an intervention by the Joint Military Task Force created to keep peace in the area saved from what would have resulted to serious industrial crisis as the workers were already poised for a serious show down with the Management over the deductions. Following this intervention by the Military Task Force, about N14 million had been recovered from the Management as at August, 2007 leaving a balance of N26 million.

Besides the afore-mentioned cases of embezzlement, about N180 million was also said to have been deducted from the pensioners’ 30 per cent part payment of their retirement benefits earlier paid.

It was alleged that a recent audit exercise on the finances of the Company showed that about N163 million was also missing from the coffers of the Company and questions are being asked as to who had stolen it. Part of the monumental scam which has rocked the steel company was the money released to the Management of the Company by the Federal government to purchase spare parts and servicing of the plants prior to the privatisation.

About $50 million was allegedly released to Oskar Nigeria Limited and Voest Alpine, two major contractors engaged to renovate and service the plant to a functional state since the machines had been abandoned over the years. It was gathered that $40 million was used by Oskar Nigeria Limited and $10 million was used in procuring parts which were kept for the new Management.

On the privatisation exercise carried by BPE, the petitioners disclosed that out of the four companies that bided for the purchase of the Company, Global Infrastructure was not one of them. The companies, Boaz Nigeria Limited, Osakar Nigeria Limited, Niger Benue Transport Company and Voest Alpine had offered $25million, $24 million, $22 million and $20 million recently.

The sale was to include the dredging of Warri/Escravos river and completion of the Railway line Aladja. In spite of the glaring fact that Global Infrastructure did not participate in the bid to the purchase, it eventually emerged the victorious buyer of the company for $30 million without the dredging of the Escravos/Warri River and completion of the Railway line as specified in the bid proposal.

How Global Infrastructure emerged the winner in a bid process it never participated in has created ripples that have refused to settle and there is the belief in some quarters that the buyers were fronting for some highly placed Nigerians. Delta Steel Company had resumed production of commercial quantities of liquid steel and conversion into billets since 29, 2005 after about 10 years of inactivity.




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3 Responses to “N30bn loot uncovered at Delta Steel * ICPC to clamp down on former GMDs”

  1. Kohl E. says:

    I worked together with Eng. Obi Okoye for 2 1/2 years when he was Assistant Manager of Unit 10 (RMH) of DSC.
    He always was a diligent and honest man and he still is.
    Kohl E.

  2. saint says:

    we need change over two mornth now we have not being paid

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