President Muhammadu Buhari has mandated the ministry of communication to provide details of the recent privatisation of the Nigerian Telecommunications (NITEL) and its mobile arm, MTEL, to ascertain whether or not Nigeria was short-changed.
Speaking to journalists Tuesday after briefing the president on the activities of the ministry of communications, permanent secretary Tunji Olaopa said the president requested that a memo detailing how the transaction was processed be submitted directly to him.
He said Mr. Buhari was concerned about the possibility of Nigeria not receiving a fair value from the deal.
“The president was also concerned about the liquidation of NITEL. He is not opposed to its privatization but he wants to know… and he wants us to bring a memo on how the whole transaction was undertaken so that he would know whether Nigeria was short-changed,” he said.
Mr. Olaopa said the president was very concerned about the whole issue of privatization that is hindering investments in ICT and said “that he will personally champion this”.
“The president talked about the potentials of the ICT sector in generating employment,” Mr. Olaopa said.
He said Mr. Buhari was also concerned about the quality of service from telecom operators in the country.
The privatisation of the NITEL and MTEL was completed in December 2014 after the financial bid was opened in October 2014 by the Goodluck Jonathan administration.
A consortium run by Skye Bank’s chairman, Tunde Ayeni, the founder of Sahara Energy, Tonye Cole, and two other companies, received the nod from the Nigerian government to take over the two companies for $242.3 million (about N42.4 billion).
Their investment vehicle, NATCOM Telecommunications, emerged the sole bidder for the Nigerian Telecommunications Limited, NITEL and Mtel.
NATCOM has as members NATSPACE Telecommunication Investment Limited, PCCW Global Limited, Prime Union Investment Limited, Olutoyi Estate Development & Services Limited, Legal Resources Alliance & Co., Sahara Energy Resources Limited, and LM Ericsson Nigeria Limited.
Of the seven firms, Mr. Ayeni, profiled as a businessman and lawyer on Skye Bank’s website, owns three.
He is the founder and operator of Prime Union Investment Limited, Olutoyi Estate Development & Services Limited, and Legal Resources Alliance & Co. There were suggestions that he has link with NATSPACE, but PREMIUM TIMES could not independently verify that claim.
In December 2014, Mr. Ayeni led NATCOM in its acquisition of NITEL/MTEL less than two months after he also led Skye Bank to buy Mainstreet Bank from Assets Management Company of Nigeria, for N120 billion.
In 2013, Mr. Ayeni was the chief promoter of Integrated Energy Distribution and Marketing Company Limited, a group that eventually bought the Ibadan and Yola electricity Distribution Companies, DISCOs.
Mr. Cole is the owner of Sahara Energy, while LM Ericsson is a subsidiary of Swedish group, Ericsson.
NATCOM, which merges the seven firms, appears to be a new corporate entity created solely for the purchase of NITEL/MTEL. Very little is known about the consortium.
NATCOM emerged winner after NETTAG Consortium, another little known group, was disqualified for failing to attach a $10million bid bond to its bid submission as stipulated in the Request for Proposals (RFP) to prospective bidders.
History of failed sales
Before the acquisition, four previous attempts to sell NITEL failed.
Nigeria started the process of privatising the national telecom groups in 2000 as part of the government’s reform of the telecommunications sector.
In 2001, the government tried to sell 51 per cent equity to Investors International London Limited (IILL) as the strategic core investor.
There was also the failed management contract by Pentascope in 2005, the aborted Orascom Telecoms bid in 2005, and the strategic core investor sale through negotiated sale strategy to Transcorp that was cancelled in 2009.
The last effort was the strategic core investor sale in 2011, where New Generation Communications Limited and Omen International emerged preferred and reserved bidders respectively.
Following the last failed attempt, former Vice President Namadi Sambo-led National Council on Privatisation, adopted the guided liquidation strategy for the sale of NITEL/MTEL.