The London-based Indian businessman who acquired the Ajaokuta Steel factory and stripped it of its assets is on the cusp of receiving a $240 million windfall from the regime of Umaru Musa Yar’adua.
Investigations by Saharareporters revealed that Yar’adua has signed off on a memo prepared by the notorious Attorney General Michael Aondoakaa. The memo calls for Global Steel Holdings Ltd, a steel giant owned by Mr.Pramod Mittal, to receive $240 million. “This is a bizarre development,” a top official of the Yar’adua regime told our correspondent. “Mr. Mittal’s purchase of Ajaokuta was a scam to begin with. To now pay him with Nigeria’s hard earned cash is to suggest that Nigeria doesn’t know what to do with money.”
The memo, approved last week by Yar’adua, calls for paying close to two hundred and fifty-million dollars to Mittal's GSL so that the company would forego the “share-purchase agreement”. It also would permit the Indian businessman to retain control of Ajaokuta as a concessionaire.
In interviews with numerous contacts within the government and the private sector, one consensus emerged: that Aondoakaa is pushing the gargantuan payment plan for purely selfish reasons. One of them stated, “This is yet another occasion where Aondoakaa’s greed is driving government policy in a direction that will cost Nigerians dearly in financial and other terms.”
Our sources revealed that Mittal had been at daggers drawn with Aondoakaa following the latter’s delay in delivering on a deal to convince Yar’Adua to reverse the federal government’s cancellation of the concession granted the company on Ajaokuta Steel Company. Aondoakaa reportedly asked for and received $6 million from Mittal to persuade Yar'adua to change his mind about the concession.
Yar’Adua had on April 1, 2008 cancelled the concession granted the Indian steel company on Ajaokuta Steel Company by his predecessor, Olusegun Obasanjo, in 2004.
In canceling the deal, the federal government stated that “Instead of investing external funds on the completion of both projects as expected, GSL embarked on massive borrowing from local commercial banks, pledging the assets of Delta Steel as collateral…GSH owes Nigerian banks $192 million…President Yar'Adua has ordered the criminal prosecution of indicated officials and promoters of GSL for asset stripping.”
The GSL then filed a lawsuit at the International Court of Arbitration, Paris, challenging the Nigerian government's decision. The company claimed it had invested over $500 million in the steel plant. GSL also accused the Nigerian government of not giving it “promised support.”
Aondoakaa packaged his memo to Yar'adua as a deal to save Nigeria's face as a friendly "international business destination". But a source familiar with the case described the memo as “a carefully concocted falsehood and misrepresentation.” The source added: “Nigeria’s case is extremely strong and it’s Mittal that should be looking for ways to settle Nigeria for his company’s well-documented scams. To begin with, the concession deal called for him to bring in capital from abroad. Instead, with the collusion of Obasanjo, he turned around and raised money from Nigerian banks. Why then did we cede control to a foreign investor? We might as well have sold the plant to a Nigerian group.”
In approving the memo, Yar’adua empowered Aondoakaa to set up an inter-ministerial committee comprising the Bureau for Public Enterprises (BPE) and other relevant agencies to look into the fine points of the new concession for Mittal.
A highly knowledgeable source in London told Saharareporters that, soon after Yar’adua’s approval, Aondoakaa began negotiations with Mittal to discuss “a sharing formula for the $240 million the Indian businessman stands to receive.”
A technical expert with GSL confided in Saharareporters that Mittal did not invest any money in Ajaokuta. He also stated that, if and when the new deal with Aondoakaa is resolved, the company is unlikely to invest anymore in the project since they already stripped Ajaokuta of its valuable assets.
The latest scam by Aondoakaa puts paid to Yar’adua’s earlier promise to prosecute GSL officials for engaging in “asset-stripping.”
Aondoakaa used that initial threat of prosecution as leverage to extort $6 million from Mittal.
Source: http://www.saharareporters.com/index.php?option=com_content&view=article&id=2737:ajaokuta-scam-yaradua-agrees-to-pay-mittal-240-million-for-stripping-ajaokuta&catid=1:latest-news&Itemid=18
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