FG Revokes Sale Of NITEL

• We Are Not Aware Yet, Says Transcorp

• Shareholders Threaten Lawsuit

By By Nkechi Onyedika, Emma Eke and Marcel Mbamalu

18th Feb 2008

The Federal Government has reversed the sale of Nigeria's premier telecommunications outfit, Nigeria Telecommunications Limited (NITEL) and its mobile service provider, Nigerian Mobile Telecommunications Limited (M-tel) to Transnational Corporation (Transcorp).

It also directed that investigation be carried out in the management contract of NITEL/M-tel by Pentascope.
In a statement in Abuja, the Minister of Information and Communications, Mr. John Odey, declared that the measure was part of government's efforts in ensuring that due process and the rule of law were followed at all times.

The minister noted that the revocation had become necessary considering various complaints arising out of the sale of NITEL/M-tel to Transcorp in addition to the failure of growing concern to achieve the objectives of the privatisation guidelines, thus making the government new position on the sale tenable. Major players in the NITEL/M-tel matter - Transcorp and the Bureau of Public Enterprises (BPE) - spoke in hushed tone on the issue last night.

Transcorp's Vice President, External Communications, Adedayo Ojo, denied knowledge of the development, stating that the reversal had not been officially communicated to the conglomerate.
"Transcorp, as at this time, is not aware of any reversal; there is nothing like that. If there is anything like that, it should have been communicated to us, for us to sit down and come out with our own position."
Pressed further for comments, Ojo admitted that he only got wind of the development from the media but insisted that Transcorp's ownership was still intact until the government communicated the corporation to the contrary.

"Only then," he said, "would Transcorp react officially."
An official of the BPE refused to comment on the issue. Declining to be identified, he said: "We are like a baby of government and ours is to executive policies and programmes of government; and that was what we had done by selling NITEL to a highest bidder. Whatever government has decided to do thereafter draws our support."

However, major investors in the companies may be warming up for litigation against government decision.
Reacting to the revocation the sale of NITEL, an investment expert, Mr. Sam I Ogidi, whose clients attracted huge patronage in Transcorp shares, noted many Nigerians, within and in the Diaspora as well as foreigners were lured to buy into the conglomerate based on the potentials of NITEL as a major asset to the firm.
Ogidi, who is the chief executive officer of Sam Ogidi Company, said: "It is unfair for government to have taken such an action, even at a time that the shareholders and the management had taken certain steps on how to inject new blood in the firm.

"The system could have seen a full separation of the M-tel, a subsidiary NITEL." He regretted that, "as at today, all the landed properties of NITEL had been sold to willing buyers and billions of Naira spent in paying the former employees their severance pay; meaning that government's hands were no longer to be seen in the affairs of the company.""The wrong signal being sent out by the news of revocation is that of discouraging many investors from participating in its privatisation programmes."

He added: "However, a court action may be the way out, when we meet over this matter."
The NITEL crisis has come a long way. Pentascope, a Dutch firm, had bought over firm and M-tel after the privatisation exercise. The investor was relieved of its services within a short period due to its inability to complete the payment before the deadline given by the BPE. Yet, in another round of bid process conducted by the BPE, an Egyptian firm, Orascom, won offer but was denied of it, as the amount, according to the BPE, was below the reserved price.

At this stage, some of the operators of the Global System for Mobile Communication (GSM) such as MTN and Glomobile thought of buying over NITEL/ M-tel but the Nigerian Communications Commission (NCC) came up with a statement that the companies would not be sold to any existing telecommunications service provider. This led to the emergence of Transcorp.

Presently, the Federal Government owns 41 percent shares on NITEL/M-tel while Transcorp has the majority share of 51 per cent. It would be recalled that workers of the two organisations, at a press conference recently in Abuja, demanded the immediate reversal of the privatisation exercise, to make way for more competent organisations to invest in them.

The workers, under the aegis of the Senior Staff Association of Communication, Transportation and Communication (SSACTAC) stated that no meaningful progress had been made since the two companies were handed over to Transcorp in 2006. They gave the government a 21-day ultimatum to address the problems facing the two telecommunications firms or face the wrath of the union.

President General of SSACTAC, Mr. Adetunji Adesunkanmi, said that without the right back-up, financially and technologically coupled with internal wrangling, Transcorp cannot take the telecommunications outfits to levels expected in spite of the presence of well-trained and dedicated workforce.

"Transcorp is busy making excuses while NITEL fixed-lines reached their lowest ebb nationally and M-tel is only heard in Abuja while its subscriber base has dwindled from over one million to less than 200,000 in 2007.
"As at this moment, there is a threat by Transcorp to further retrench 4,000 from the workforce while staff salaries have not been paid for six month."
Adesunkanmi disclosed that Transcorp had not recorded any singular achievement since it took over NITEL and M-tel in 2006, "except press briefings and releases by a hapless management team that must doubt itself by now."

He noted that before the privatisation, NITEL and M-tel had one million and 1.5 million lines respectively but pointed out that NITEL has less than 500,000 lines while M-tel cannot boast of 30,000 lines. The union president also alleged that Transcorp was cannibalising NITEL property it inherited upon privatisation, stating that none of the NITEL exchanges was working, and that Transcorp had not added even a kobo despite realising N20 billion from the public offer in 2007.

Also, the Secretary-General of SSACTAC, Mr. Chubby Nwagbara, has asked the government to stop Transcorp from causing further damage to the two firms and retrenchment of workers. He argued that if NITEL and M-tel were sold to any private telecoms operator, it would have been better, asking government to revoke the privatisation agreement reached with Transcorp, to enable a competent telecommunications company to invest in the two organisations.

He said, the government, as a key equity holder, must discuss with major stakeholders in NITEL and M-tel, including organised Labour, on a new arrangement to involve financial and technologically competent partnership in the future of the organisations.

Source: Guardian

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