ALSCON: BFI Group Disputes Asset Worth, Accuses RUSAL of ‘Criminal’ Devaluation

09 Dec 2012

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Aluminium Smelter Company of Nigeria

James  Emejo 
The lingering controversy over the management of the Aluminium Smelter Company of Nigeria (ALSCON) has taken a new twist as the BFI Group has threatened not to “touch the assets of the company” unless issues of criminality allegedly perpetrated by Russia’s United Company RUSAL was addressed.

BFIG had accused the Rusal-the current management of ALSCON- of devaluing the assets of the company to only about N14.5 billion as at December 2011 from N130 billion when the firm was taken over in February 2007.

But Rusal had denied the allegations stating instead that it had invested about N10 billion in the capital asset of the plant.
However, the statements of accounts, which Rusal had filed with the Corporate Affairs Commission (CAC), copies of which were obtained by THISDAY showed a consistent devaluation of the company’s asset base over the period.

This is coupled with the fact that the accounts were also poorly documented and showing no competence in the preparation.
Moreover, the N10 billion which Rusal claimed to have invested in the firm was not reflected in its financial statement because this ought to have enhanced the value of its assets.

For instance, at some point, ALSCON had been described as a “small company” in one of the financial statements it submitted to CAC.
THISDAY gathered that the Bureau of Public Enterprises (BPE) had formally been notified about the asset depreciation while the current Acting Director-General Benjamin Ezra Dikki was said to have already committed to seeing the Supreme Court order on ALSCON carried out.

The court had directed that ALSCON be given to BFIG after it faulted Rusal’s acquisition of the company.
RUSAL has dragged the Federal Government to the International Arbitration Court in London demanding $500 million in damages.
However, a top BFIG official who spoke to THISDAY in confidence said Rusal’s alleged criminal devaluation of ALSCON had put BFIG at risk with its financiers.

The source said: “This is very important because BFIG Group has been mandated by law to buy ALSCON for $410 million, because that was the judgement. it is a decree.  It is an act of the Supreme Court.

“Now, if the government insists on the interpretation of the law, that we must pay $410 million, because that is what the law says we should pay but the other report of the firm shows N14.5 billion which was less than $100 million; so you have $410 million mandated by law, you have the value of the company of $100 million.”

According to the source: “BFIG is going to the bank to get money to pay for ALSCON. Any bank you go to, like any lender appearing before a bank; the lender is going to say what is this company worth?

“And we say this company is worth $100 million and I am going to buy it for $410 million. And in our own case, we are dealing with the US bank-then they would now say this sounds like you are crazy.”

THISDAY gathered that BFIG, as a result, had resolved not to “touch” the assets until all discrepancies were sorted out with the Federal Government.

It said such criminal filing in the statement of accounts of the company could have dire consequence when a new board is eventually appointed.

It was further gathered, however, that the Supreme Court judgement had already offered a platform for negotiation when it added that the Share Purchase Agreement (SPA) be mutually executed between BPE and BFIG.

THISDAY further learnt that BFIG had already asked to be joined in the London suit because it believed it had concrete evidence to dislodge the Russians.

THISDAY learnt exclusively that the Group considers RUSAL’s UK arbitration suit as the “greatest blunder in Deripaska’s (RUSAL’s Chief Executive Officer) career because it opens the door to evidence and proof of RUSAL’s systematic instigation of fruad, theft and harm.” “The best legal ammunition usually is provided by the other side without their realising it at first,” the source said.

Tags: Business, Nigeria, Featured, Aluminium Smelter Company

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