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A journalist's account of his 15 years of unrelenting digging into ALSCON, a company that was sold in suspicious circumstances
My investigative report on the sale of the Aluminium Smelter Company of Nigeria (ALSCON) is a product of more than 15 years of unrelenting digging and found that the Nigerian people lost many millions of dollars when the deal was done.
ALSCON was set up to run an aluminium smelting plant in the Niger delta, which was completed in 1997 and cost a staggering $3.2 billion to build. This was considered hyperinflated by international standards.
My story revealed that when ALSCON was sold in 2004 for less than 5 percent of its $3.2 billion value, the payment was in fact made by Nigerians. Nigerian funds were used, with a company called RUSAL - a Russian aluminium giant - acting as a front.
The payment for ALSCON was $130 million, which appeared to come from RUSAL.
But in fact it came from almost $5 billion that was being returned to Nigeria by the Swiss government. The money had been sitting in bank accounts belonging to the late former Nigerian dictator Sani Abacha, who had hidden this money during his time in power.
I found evidence that the funds were first transferred from Abacha's Swiss bankers to a company affiliated with RUSAL. This company then transferred the funds to the Nigerian government.
So while the payment appeared to come from RUSAL it actually came from Abacha's hidden billions, which should have been returned in full to the Nigerian people.
My interest in ALSCON predated the Nigerian government’s decision to privatise its equity in the company and the eventual "sale" of the plant in 2004.
When ALSCON commenced production in 1998, the oil producing communities in the Niger Delta had hoped the end of poverty was in sight.
Initially, the company provided the bulk of jobs for youths in the area, many of whom were behind the spate of kidnappings of oil workers and vandalism of oil facilities in the area.
In 2000, when the government announced that ALSCON was among government assets to be sold to private operators, it made me curious to investigate why such a huge investment of taxpayers' money would be disposed at a scandalous fraction of the total cost.
Apart from being an observer of the privatisation process as a reporter, my investigations mainly covered reviews of annual reports, financial documents, court papers and interviews of key personnel involved in the transaction.
I have been following the saga right up to the present day. I covered how the sale to RUSAL was accompanied by various tax concessions - which freed the company from all tax obligations on its operations.
I also covered how Nigeria’s Supreme Court gave two separate rulings, in 2012 and 2014, declaring that RUSAL should not have been permitted to buy ALSCON - not least because there was a better bid from another company. To this day, the Nigerian government agency in charge of privatisation has not acted on this ruling.
ALSCON was originally initiated to redress the contrasting reality in the Niger Delta: a region blessed with huge natural resources, but whose people wallow in abject poverty. Its sale to RUSAL failed to help realise that objective.
Bassey Udo's investigation was completed as part of Wealth of Nations, the Thomson Reuters Foundation's pan-African programme working with journalists to report on tax abuse. Read his full story at Premium Times here.
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