Damning reports emerged yesterday at the Senate Ad-hoc Committee investigating the activities of the Bureau for Private Enterprises (BPE), as a World Bank report between 1999-2003 indicted a former Director-General of BPE, Mallam Nasir el-Rufai, for the lack of proper internal audit arrangement on projects, inadequacy of transparency in some transactions and failure to comply with the federal government privatisation procedures in a consistent fashion.
However, el-Rufai has faulted the claim of the World Bank report, saying that the report is nonsense.
He said, “I think this report is nonsense. I have challenged everyone, including the World Bank, to go through the whole 33 privatisation transactions and tell me if anyone of them did not go through the rules. It must be in the imagination of Julius Bala who succeeded me.”
This comes as the prominent human rights lawyer and former president of the West African Bar Association (WABA), Mr. Femi Falana, said former President Olusegun Obasanjo should be summoned to explain his role in the privatisation of enterprises just as he described the process since its inception as bastardised.
Also, a former director-general of the BPE, Irene Chigbue, said the political drift between Obasanjo and his former deputy, Alhaji Atiku Abubakar, hampered the activities of the BPE. She said the political lacuna at the time created hiccups in the operation of the BPE.
The World Bank report was presented in the testimony of the former director-general of the BPE, Dr. Julius Bala, who took over as the director-general after El-Rufai.
But El-Rufai had during his testimony on Thursday, said the woes of the BPE started with the appointment of his successor (Bala), whom he claimed was earlier dismissed from the bureau for corruption but was brought back to head it.
However, according to the World Bank report, it was revealed that there were major lapses in the retirement of advances and that charges made by the project commercial bankers were deemed excessive and inconsistent.
The report reads in part, “There was no proper internal audit arrangement for the project; a manual financial system is currently being used; there were major lapses in the retirement of advances; charges made by the project commercial bankers are deemed excessive and inconsistent; interest have not been credited on special account balance; expenses dated back to late 2001 and 2002 were submitted in 2003.
“Expenses were incurred before no objection was sought from the bank. The most important public enterprises, in terms of economic and social impact, have not yet been divested. Moreover, the bank expressed serious concerns about inadequate transparency in some transactions (for example, NITEL) and failure to comply with the federal government’s privatization procedures in a consistent fashion. In addition fiduciary oversight and accountability of the Privatisation Proceeds Accounts (PPA) have been inadequate to date, and audits of these accounts are overdue”
But Bala on his part, said that because of the lapses on what he met on resumption, he focused on “a major overhaul of the privatisation implementation through a complete review of strategies for implementation and rescheduling of the time frame for the conclusion of all transactions.
“To prepare the ground for implementing privatisation transaction on major utilities and huge industrial complexes from 2005. Such enterprises include the major utilities as NEPA, NITEL, ports, NAFCON, the steel plants, ALSCON and the likes,” he added.
In his submission at the hearing, Falana said the BPE should be prosecuted in the interest of Nigeria for the way they have sold Nigeria illegally.
He said, “The revelation of what happened is the looting of Nigerians. There is no country in the world where they do wholesale privatisation. Privatisation has violated the constitutional provision in section 16.”
He insisted that failure on the part of the committee to invite the former president and others people that have been mentioned in the panel probe would expose the committee as covering up the errant officials.
In the same vein, the former director-general, Irene Chigbue while responding to questions over the carrying out of transactions not approved by the National Council of Privatisation, (NCP) which oversees the BPE, said the political lacuna between the office of Obasanjo and Atiku resulted in some of the problems in the BPE.
It was revealed at the hearing that at particular point in stand-off between Obasanjo and Atiku, the ex-Vice- President and Chairman of the NCP was caught off by the BPE while letters were sent directly to Obasanjo. This it was further stated, resulted in a situation where most preferred bidders at particular point time were replaced by another bidder.
She said, “There was a political lacuna between the office of the then president and his vice -president. The ex-president in his wisdom said we should be relating with the then finance minister who is now a senator. Because of that, we were getting approval directly from the ex-president.”
Also, former Minister of Aviation, Ambassador Kema Chikwe, said el-Rufai laid a very controversial foundation in privatisation of Nigeria, adding that his personality caused the corruption and confusion that plagued the process as he craved in to the powers of the ex-president.
Reacting to allegation by el-Rufai at the hearing on Thursday that Kema told stories to stall the sale of Nigerian Airways, Chikwe noted that the el-Rufai almost suffered a fit over Air Nigeria. She said el-Rufai had capitalised on the Senate committee’s profound investigation into BPE’s privatisation and Nigeria’s gains and losses to unleash his political frustrations on her and others.
But she tendered a letter to the panel dated 2003 which contained an apology by el-Rufai for using strong language over their disagreement on the privatisation of the Nigerian Airways.
Also a former deputy director of the BPE, Charles Osuji, admitted taking bribe from a chairman of an oil company. He claimed that he was unjustifiably dismissed from the Bureau after he had collected the bribe and did not remit it to the then director-general of the Bureau, el-Rufai.
The committee, however, queried the BPE for not prosecuting Osuji over his revelation.
But in his reaction, el-Rufai said after reporting the matter to Atiku, the late Bola Ige had initiated court actions against Osuji. He noted that when sequel to Bola Ige’s death, Osuji was dismissed which was approved by the then Vice -president.
Meanwhile, the BPE yesterday disclosed that the gross proceeds from the direct sale of public enterprises between 1999 to date is N249, 497,188,000.
The BPE added that of the said sum, N103, 844,517,000 was used to settle staff salaries and terminal benefits of the workers of the privatised firms, while other transaction expenses gulped N23, 988,232, 000. Also, the net proceeds, during the period under review, were N121, 664,439, 000. When dividend revenue is added to the net proceeds, the amount remitted to the Federation Account was N146, 182,300,000.
They further said the presentation of the Director General of the Bureau, Ms. Bolanle Onagoruwa, on privatisation proceeds at the opening day of the public hearing, which has led to mischaracterization of the facts as presented.
A release by spokesman of the Bureau, Chukwuma Nwokoh, said: “This data is one of the myriad documents submitted by the Bureau of Public Enterprises (BPE) to the ongoing public hearing by the Senate into the activities of BPE from 1999 to date.
“The activities of the BPE are governed by the Constitution of the Federal Republic of Nigeria and its enabling legislation- the Privatisation and Commercialisation Act of 1999. In undertaking its mandate, the BPE has been faithful to the tenets of these laws.
“It must be noted that upon acceptance of the offer price by the National Council on Privatisation (NCP), the core investor is expected to make graduated payment of the agreed sum while negotiations continue to finalise the Share Purchase Agreement.
“It is also apt to point out that payment of the offer price by the winning bidder is graduated and as a result, until full payment is made, the initial payments are lodged with commercial banks for transfer to the privatization proceeds account with the Central Bank of Nigeria (CBN) on final payment by the winning bidder.
“In this regard, the Federal Government, which is aware of its liabilities to the workers and other creditors, approves the deductions of the agreed sum before the net proceed is paid into the proceeds account. In other words, surplus revenue after closure of each transaction and net off of transaction expenses is paid into the Privatisation Proceeds Account.
“The Bureau’s expenditure is broken into two broad categories: transaction expenses and administrative expenses. Transaction expenses are the direct expenses of carrying out a sale which includes advisers’ fees, settlement of labour entitlements, etc, while the administrative expenses include staff salaries and other overheads. The administrative expenses are offset through budgetary provisions.
He said it would be completely impossible to undertake the privatisation programme of the Federal Government if no arrangements had been made to pay off the workers’ entitlements and other transaction expenses, as the Bureau in the last four years has been picketed and its staff locked out by workers of privatised enterprises who are demanding the payment of their entitlements.
“For the avoidance of doubt, we would like to reconfirm to the Nigerian people that all privatisation proceeds from inception are fully accounted for and the records are open for all.” he said.?