The sale of Nigeria's state-owned Nigerian Telecommunications (Nitel) and its mobile arm, Mobile Telecommunications Mtel), is once again bogged down in confusion following allegations that the government sold the company below the value offered by another willing buyer.
The NATCOM consortium, headed by a Nigerian, last week emerged as winner of the bidding for the company, on an offer of $252.25 million.
However, fresh controversy has emerged, with Arabian Amlak For Investment taking the matter to court. Arabian Amlak is challenging the government's so-called guided liquidation process, via which Nitel is being acquired for far less than the $920 million the company says it offered. In the guided liquidation process, the government is selling the company on the assurance that the buyer will continue to operate the company, rather than buying it and potentially selling off pieces.
The government originally tried to sell the company about 12 years ago through a typical competitive bidding process. But tentative deals struck though normal bidding all fell through for various reasons.
Arabian Amlak then struck a tentative deal with the government in a so-called "willing buyer, willing seller" agreement, in which a prospective buyer and a seller agree on a fair market value for a company. Under this process, Arabian Amlak was pre-qualified and given a letter of acknowledgement by the Public Bureau of Enterprise (BPE).
Though the Nigerian government verbally requested that funds be transferred for the acquisition to go through, it effectively abandoned the deal after it received a request for documentation for the arrangement, according to Arabian Amlak .
Now Arabian Amlak wants the court to stop the sale of Nitel.
NATCOM was expected to revamp Nitel's operations in order to win back public confidence and be able to compete with private operators. But with new issues surrounding the sale of the company, nothing is expected to happen until the court clears up the legal wrangling. As has been the case of over the past 12 years, if the legal fight continues, NATCOM is expected to back out of the deal.
BPE spokesman Chigbo Anichebe has told the media "Arabian Amlak For Investment has no case because they solicited for the bid but lost out. We don't accept unsolicited bid."
Corruption by senior government officials involved in the privatization process of the company, a lack of transparency, and a failure of potential buyers to come up with necessary funds, have all been blamed for unsuccessful attempts to sale the company. From the time that the Nigerian government launched a hunt for the buyer of the company over 12 years ago, several international telecom companies including Investor International London and Omen International consortium have tried but failed to buy Nitel.