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The management of Dangote Industries Ltd. (DIL) claims that it fully owns the Obajana Cement Plant and that all legal procedures were followed in its 2002 acquisition.
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The company made this claim in a statement titled “Obajana Cement Plant: Separating Facts from Fiction” and released by Mr. Anthony Chiejina, Group Head Branding and Communications, DIL.
The organization claimed that the Kogi government has no ownership stake in Obajana Cement Plc and that since the company’s production began in 2007, it has been paying all necessary state taxes, levies, and fees to the Kogi government.
This statement was made solely to allay the worries and concerns of Dangote Cement Plc (DCP) stakeholders, particularly the over 22,000 people it directly and indirectly employs as well as the thousands of contractors, distributors, and customers, as well as our financiers and shareholders.
“At a time when our country is facing significant economic difficulties, we believe that everything must be done to keep our economy operating efficiently, keep our people in jobs, keep the businesses that depend on us thriving, and not dissuade those who take the risks of making necessary, legal, and substantial investments in our economy.
According to the statement, “The shutdown of our factory has seriously jeopardized the economic health of our nation without any consideration for the serious ramifications.”
The organization claimed that, while reserving its right to pursue arbitration in accordance with the existing agreement, it had informed all pertinent authorities—including the Federal Government of Nigeria, which had intervened in the case—about the illegal invasion and its deleterious repercussions.
It is hoped that the dispute resolution procedure we have started will enable us to focus on our business without distraction and continue making a major contribution to our country’s economy.
The Obajana Cement Plant, one of the major taxpayers and the vehicle for one of the largest corporations with investments from hundreds of Nigerian and foreign investors, is regarded by the group as one of the most important elements of economic activity in the country.
The Federal Government of Nigeria (FGN) has mining leases covering a large limestone deposit, making them two of the company’s most valuable assets, according to the statement.
The company claimed: “Dangote Industries Limited (DIL), pursuant to the legally binding agreement it entered into with KSG to invest in Kogi State, acquired the land on which the Obajana Cement Plant is built solely in 2003, well after it had acquired the shares in the Obajana Cement Company in 2002.
“After paying the required costs and compensating the landowners, DIL received three Certificates of Occupancy in its name.
“Again, well after it had purchased the shares of the Obajana Cement Company, DIL was fully responsible for the conception, design, acquisition, construction, and payment of the plant and machinery.
“According to the provisions of the Nigerian constitution, the limestone and other minerals used by the Obajana Cement Plant belonged to the Federation, with jurisdiction to give extraction and mining permits only in the FGN and not the state in which the minerals are located.” Following the agreement with the KSG, DIL requested and paid for mining leases over the aforementioned limestone from the FGN, and it has abided by the terms of the leases ever since.
The business said that the Kogi government asked DIL to invest in the state in a way that would generate jobs, advance the state, and pay for itself because it had no assets to give or minerals to give.
The business stated that Obajana Cement PLC (OCP) was established as a public limited liability corporation by the Kogi government in 1992.
“Sometime in early 2002, almost 10 years after the OCP’s creation (which at that time still had any assets or operations), KSG asked DIL to take advantage of the state’s substantial limestone deposit by building a cement plant.
“DIL agreed that it would build a cement plant in Kogi and provide all of the significant money needed for the initiative after a number of consultations and an evaluation of the prospective opportunity.
“DIL additionally consented, at a particular request from KSG, to use the OCP name as the vehicle for this investment, despite the fact that it was only in existence at the time on paper and had no assets or operations.
“To formalize their understanding, KSG and DIL signed a legal agreement on July 30, 2002. The 2003 amendment to the agreement has not changed its legal effect or the parties’ ability to enforce it, according to the statement.
The following was stated in the statement regarding a deal between Dangote and the Kogi government: “It was agreed, among other things: DIL would develop a cement plant with a capacity of 3,500,000 metric tonnes per year.
“That DIL shall own all of the shares of OCP and provide all of the funding necessary to build the cement factory.
“KSG shall grant tax relief and exemption from levies and other charges by KSG for a period of seven years from the date of commencement of production,” states the agreement. “KSG shall have the opportunity to acquire five percent equity investment in OCP within five years.”
According to the statement, in accordance with the conditions of the contract, DIL raised all of the money needed to develop the facility independently, with no help from KSG.
According to the statement, OCP’s name was changed to Dangote Cement Plc in 2010 as part of internal restructuring and for greater market identification. This was done in accordance with its rights and to ensure alignment with the Dangote Brand.
In order to create the larger Dangote Cement Plc, several additional substantial cement firms held by DIL—including the Benue Cement Company—were merged with OCP.
Regarding the issues surrounding the agreement’s execution, DIL assiduously and at some expense complied with all the requirements of the contract between it and KSG with regard to OCP. It constructed a cement factory that was much larger and better than expected.
“KSG was asked on numerous occasions to exercise the purchase option but was unable to do so due to financial responsibilities to contribute in any way to the finance of the plant or to support the purchase of 5% equity shares in OCP.
“KSG also failed to fulfill its commitments to grant OCP a waiver of taxes, fees, and levies that it may have assessed.
Instead, since it started producing in 2007, OCP (and now DCP) has paid all owed sub-sovereign taxes, levies, and charges to KSG, despite being entitled (under the terms of the agreement with KSG) to tax relief and exemption from charges and levies by KSG for a period of seven years from the date of commencement of production.
No dividend or other economic or shareholder rights could have accrued to KSG from the operations of the company because it has no equity ownership in OCP or other kind of investment.
Regarding the purchase of the plant site, it was stated in the statement that “after the 2002 agreement between DIL and KSG, DIL applied to KSG in 2003 for the acquisition of property for the plant site, and this application was granted with the issuance of three Certificates of Occupancy to DIL.
According to KSG’s knowledge, DIL gave meaningful compensation to the owners of farmland in the Obajana community within two (2) square kilometers of the plant site.
“Thereafter, in good faith, DIL applied to the State Governor in September 2004 for permission under the law to allocate the plant site to OCP, DIL’s investment vehicle.
The State Governor approved this request for consent, and DIL paid the necessary consent fees.
The statement provided more information about the company’s interactions with the Kogi administration, stating that “DIL’s investment in Kogi through OCP was made at the request of the lawfully elected government of Kogi and was done in compliance with all applicable laws and state law.
And after receiving internal government clearances, the Governor and Attorney General of the State (at the time) successfully, legally, and properly executed the transaction agreements.
We have had a number of inquiries about the ownership structure of the Dangote Cement PLC as it relates to the alleged interest of KSG since the start of Alhaji Yahaya Bello’s administration in 2016, and we have had several engagements with the officers of the state government, including Governor Yahaya Bello.
The statement said, “At all of these encounters we have provided all the information and data supported by necessary documentation, required by the government and the State House of Assembly to prove our authorized investment.
The corporation was further reported to have submitted its reply to the Judicial Commission of Inquiry in 2017 along with pertinent documents to support its viewpoint.
“We haven’t heard anything from the Judicial Commission of Inquiry yet. We were invited by the State House of Assembly to discuss this issue earlier this year, but we are still waiting to hear the inquiry’s report.
“Once more, we offered proof in support of our claim that KSG has no equity or other stake in OCP or DCP.
“On Wednesday, October 5, hundreds of dangerously armed individuals assaulted our cement plant in Obajana, Kogi. They destroyed our property, severely hurt many of our staff, and stopped the company’s operations.
Curiously, Governor Bello addressed the public on October 6, a day after our facility in Obajana was shut down by KSG, and stated that a Specialized Technical Committee, which was established as part of the recommendations of the Judicial Commission of Inquiry, had just presented its recommendations and that KSG had accepted them. It is abundantly evident from this statement that despite the Governor’s own assurances that the Specialized Technical Committee’s recommendations were implemented, the shutdown of DCP’s plant nonetheless took place. remains pending,” the declaration said.
The corporation claimed that the plant’s activities were disrupted, which resulted in lost revenue for the company and its clients as well as for the Federal and State governments.
