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Ajaokuta Steel: Mittal, Indian Businessman Gets $500m Bailout in Nigeria



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A company owned by Pramod Mittal, an Indian businessman who was the chairman of Ispat Industries Limited (now JSW Ispat Steel) is reportedly getting almost $500 million after the federal government of Nigeria agreed to pay his company  the sum to settle a contract dispute over a deal that a previous  administration said was tarnished by fraud.

Ajaokuta Steel: Mittal, Indian Businessman Gets $500m Bailout in Nigeria

Source: Bloomberg

Bloomberg reported that Mittal’s firm won a settlement tied to a Soviet-era steel plant that has sucked up more than $7 billion in Nigerian public investment without producing any metal.

Mittal, whose career in the steel industry has been less glittering than Lakshmi Mittal,  his better-known sibling — the tycoon behind the €20 billion ($21.2 billion) ArcelorMittal SA conglomerate —, has a string of abandoned factories and a trail of unpaid debts to his name.

Five years ago, his Isle of Man-registered Global Steel Holdings Ltd., or GSH, was put into liquidation over $167 million owed to Moorgate Industries Ltd., a company spun off from one of the world’s biggest steel traders.

As a UK court weighed Moorgate’s request to declare Pramod personally bankrupt three years ago, the London-based Indian national held out the prospect of a payout from the Nigerian state to clear his debt.

The judge was unconvinced at the time, but the settlement subsequently reached with Nigeria last year now looks like the 67-year-old’s best route out of insolvency.

Still, while payments from the Nigerian government have reached GSH’s liquidators, as of Oct. 4, Moorgate had yet to see any of those funds despite having asked for them, court documents show.

With Pramod’s bankruptcy winding its way through English court rooms, a new Nigerian president has taken office, and last month his steel minister said one of the administration’s top priorities is to finally fire up the furnaces of the massive plant at the heart of the younger Mittal’s $496 million compensation.

The government has justified the agreement with a former unit of Pramod’s GSH, which was announced in September 2022, saying it frees the state to pursue its ambitions for the sprawling 24,000-hectare (92 square mile) site.

The settlement — representing about 1.5% of Nigeria’s foreign reserves — is just the latest twist in the saga of the vast Soviet-built factory complex begun 44 years ago.

The project has sucked up more than $7 billion in public investment and has yet to produce any metal.

The story of the Ajaokuta steel mill on the banks of the Niger River 190 kilometers south of the capital, Abuja, is often cited as emblematic of the corruption, poor governance and incompetence that bedevils the West African nation.

The country’s most notorious white elephant still sparks passionate debate over whether it should be written off or revived.

“Ajaokuta has been a black hole that has gobbled up billions of dollars, enriching multiple generations of politicians and foreign enablers,” said Matthew Page, a former Nigeria expert for US intelligence agencies and now an associate fellow at London-based Chatham House.

“This last failed reboot — and the giant price tag that came with it — is a preview of the next failed re-concessioning attempt. At this point, Ajaokuta’s dilapidated machinery is capable of doing only one thing: making public funds disappear.”

Bloomberg claimed that neither Pramod’s representatives nor the spokespeople for the newly elected President Bola Tinubu and Steel Minister Shuaibu Audu responded to requests for comment.

Abubakar Malami, Nigeria’s attorney general from 2015 to earlier this year, on whose watch the settlement was reached, said last year that the administration of former President Muhammadu Buhari “rescued the steel industry from interminable and complex disputes as well as saving the taxpayer from humongous damages.”

Pramod’s Involvement

Pramod entered into the Ajaokuta picture in 2004, when then President Olusegun Obasanjo awarded GSH a series of contracts, including an arrangement first to manage and later to buy the steel mill.

Shortly after GSH took over the plant, Solgas Energy Ltd., a small US company, sued it in Texas. Solgas claimed that GSH discussed becoming Solgas’ subcontractor on Ajaokuta before breaching a confidentiality accord and bribing Nigerian officials, including one of Obasanjo’s sons, to “steal the concession.”

While the case was thrown out on jurisdictional grounds, in December 2008 a separate arbitration tribunal ordered Nigeria to pay Solgas $15.2 million in damages for the wrongful termination of the contract — while noting the US firm hadn’t provided evidence to support the corruption allegations.

By then, Umaru Yar’Adua had taken over as Nigeria’s president, and he canceled GSH’s contracts after a panel that his steel development minister set up said the concessions were rife with irregularities. GSH’s claim it had invested $200 million was “a ruse,” the inspectors said.

Rather, the company had used its Nigerian assets to borrow more than $192 million from local banks — funds they “strongly” suspected had been dispatched abroad, they said.

The panel’s full report — never made public but seen by Bloomberg — said rescuing Ajaokuta was beyond the “financial, technical and experiential capabilities” of GSH, which instead had been “systematically cannibalizing, vandalizing and moving valuable equipment” out of the factory.

GSH and its Nigerian unit initiated arbitration proceedings against the government and later entered mediation, which produced last year’s settlement.

Pramod had signed two earlier agreements with the Nigerian government – in 2014 and 2016 – that would have seen his firm retain the right to manage an idled state-owned iron ore mining company but receive no payout.

“I threatened them with criminal proceedings for tax evasion, in addition to other criminal infractions that they had clearly committed,” Mohammed Adoke, a former attorney general who had reached the first of these accords, wrote in his memoir titled “Burden of Service.” “To amicably resolve the issue, I insisted that Global Steel should relinquish (Ajaokuta) for free without any form of compensation.”

Adoke’s successor, Malami, who was the attorney general when the half-a-billion-dollar settlement was struck, modified the terms of the deal to take back the mining firm and award a payment. Malami didn’t respond to a request for comment.

Moorgate’s Case

Even before finalizing the Ajaokuta windfall, Pramod had suggested using the money to pay down the Moorgate debt. In June 2020, as Moorgate sought his bankruptcy, he told Judge Catherine Burton that GSH’s liquidators had failed to account for the “very real prospects of a payment” from Nigeria. He said his Abuja-registered subsidiary would settle the obligation to Moorgate “out of whatever money it receives from the mediation,” according to the decision issued by Burton, who — unpersuaded — ruled in favor of the creditor.

Pramod also tried another way to skirt bankruptcy — using an individual voluntary arrangement, or IVA. He proposed repaying less than £5 million out of £2.5 billion  ($3.1 billion) —  or 0.2% of what a handful of companies and individuals said they were owed by the businessman.

Moorgate countered that “friendly creditors” who approved this meager offer were either associated with Pramod or relying on loan agreements that were “not true or contemporaneous documents.” A UK judge revoked the IVA last November, expressing “serious doubts” about the authenticity of the paperwork. In the IVA, Pramod said he was worth £117,000, claiming he didn’t control GSH. The family’s London mansion is held through an offshore company whose directors were senior managers at GSH.

Contrary to Pramod’s argument, the court determined he controlled the British Virgin Islands-registered company that owned GSH through his influence over a family trust, with an Isle of Man judge similarly describing him as that firm’s “driving force.”

Pramod made other apparent attempts to distance himself from the group and its subsidiaries. Since April 2021, GSH’s Nigerian unit — the settlement’s beneficiary — has been owned by a Mauritian entity named Luminous Star Ltd., classified as defunct for a decade and with a director who was formerly a GSH employee. While Pramod ceased to be a director of the Nigerian firm in late 2020, his son sits on the board.

In January, Nigeria’s then Information Minister Lai Mohammed said the government had paid $446 million to GSH’s local unit in multiple instalments under the settlement. The law firm hired by the Nigerian subsidiary for the mediation made six transfers from these funds to GSH’s account, totaling £219 million ($272 million) between October 2022 and February 2023, according to reports filed by the company’s liquidators. The law firm, King & Spalding LLP, declined to comment on the rest of the money.

In December and again in March, Moorgate asked to be paid out of funds recovered by GSH’s liquidators, according to a court decision issued last month in the Isle of Man. The liquidators, who estimate that only £40 million is available for creditors once GSH’s potential tax liability and additional costs are taken into consideration, are yet to comply with the request, the judge said on Oct. 4, ruling that Moorgate is entitled to receive part-satisfaction of the debt. Moorgate and GSH’s liquidators declined to comment.

Emulating Lakshmi

Like his brother Lakshmi, who built the world’s second-largest steel producer after splitting from the family business in the mid-1990s and embarking on a legendary deal-making spree, Pramod’s efforts also hinged on international acquisitions. As Lakshmi, the UK’s sixth-richest person, entered the wealth stratosphere, his brother sought to emulate him.

In 2004, Lakshmi’s daughter got married in a lavish ceremony at Versailles, France. Nine years later, the younger Mittal spent £50 million on his daughter’s wedding in Barcelona, according to Moneylife, an Indian media outlet, and Spanish news site Vanitatis.  Pramod’s spokespeople didn’t comment on the figure. Just this year, Pramod’s son got married to his long-term partner in a “multi-million pound ceremony” at a five-star UK hotel, the Daily Mail reported.

Pramod’s steel ambitions took him not only to Nigeria, but also to Bosnia, Bulgaria, Libya, Zimbabwe and the Philippines where his companies ran up nearly a billion dollars in debts. During the mid-2000s expansion, GSH agreed to take a loan of up to $35 million from an offshore company owned by his brother Lakshmi, board meeting minutes show. Neither Lakshmi nor the group he heads “have any business connection to the investments” of Pramod, a spokesperson for ArcelorMittal said by email.

In the Philippines, GSH bought a shuttered steel plant in 2004. Within five years, activity at the facility stopped amid a legal battle, with lenders claiming Pramod’s firm had defaulted and the company accusing the banks and liquidator of reneging on an obligation to clear tax arrears. In Bulgaria, where GSH failed to turn around a communist-era steelmaker, a Sofia court put the company owning the mill into bankruptcy in 2008 after it defaulted on a Є325 million bond.

Authorities in Bosnia-Herzegovina arrested Pramod in July 2019 and charged him in January this year with “heading an organized crime group.” Prosecutors alleged that GSH “illegally appropriated” about $11.5 million from a manufacturer of iron-ore smelting coke that the firm took control of in 2003. In a statement following his detention, GSH said the “complaints are categorically false,” according to Mumbai-based news outlet Global Prime News. Pramod was released on bail shortly after being questioned and has not returned to Bosnia. He and his family have initiated arbitration proceedings against the Bosnian state.

Meanwhile, in Nigeria, the attachment of the country’s leaders to the Ajaokuta plant shows no sign of abating, even though critics including the World Bank have called the facility obsolete. President Tinubu pledged during his election campaign to get the steel mill up and running. His predecessor’s government, which left office in May, congratulated itself not only for liberating Ajaokuta from Pramod’s legal claim but also securing it for a settlement significantly smaller than the $5.3 billion that GSH had apparently demanded.

Just last month, touting the potential of the complex to one day create half a million jobs, Vice President Kashim Shettima said the “Ajaokuta plant can be a game changer for the Nigerian nation.”

Source:  Bloomberg L.P except headlines and add ons





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El-Rufai to Launch New $100m Firm in January



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Nasir El-Rufai, former governor, Kaduna State has announced that his Afri-Venture Capital Company, a venture capital/private equity firm, will begin operations in 2024.

El-Rufai to Launch New $100m Firm in January

Nasir El-Rufai, former governor, Kaduna State

El-Rufai, in a post on X, said through the firm, he hopes to finance, nurture, and mentor Nigerian innovators and entrepreneurs to become the next Dangote Group shortly.

The former governor said he would be working with private sector partners, including Eyo Ekpo, co-founder of Excredite Consulting Limited, among others.

“I can confirm that our VC-PE firm, Afri-Venture Capital Company Ltd will by the Grace of God, begin operations initially in Abuja in January 2024 with Jimi Lawal, Hafiz Bayero, Eyo Ekpo and Kabir Yabo as founding directors and initial shareholders. I am privileged to be the part-time Chairman of the Board.

“Please, pray for our success and the Nigerian (and in the near future African) innovators and entrepreneurs we hope to finance, nurture, and mentor to be the Dangote Group of the future,” the former governor wrote on X.

The plan, he said, was to launch a $100 million venture capital fund for startups in Nigeria, particularly those in the Kaduna tech ecosystem, according to BusinessDay.

El-Rufai, speaking on his new firm and his plans,  said Nigerian youths need mentoring and financing to achieve the needed breakthrough.

“What young people need is essentially mentoring and financing to get things going. They develop the idea and see whether it is viable. And we will open doors for them because they don’t have contact.

“They don’t know or have access to ministers, presidents, or regulatory agencies. We do. We know the minefields that they have to navigate. We know that they need to give them appointments and we can provide them with the startup funding and in return we take an equity position.

“We don’t want to take your business; we want to develop it. But if we take the risk on you, we will take a percentage of the business,” El-Rufai told BusinessDay, in Marrakech, Morocco, in November during the Africa Investment Forum.

According to BusinessDay, El-Rufai is willing to stake $2 million of his money for the offtake of the ($100m) fund and plans to convince investors to provide the remaining funding.

“The investors will mostly be those who believe in us but don’t have the capacity or the time to do the analysis and evaluation. But they trust our judgment and they will come with us,” El-Rufai said.

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Deimos Announces Strategic Partnership with Cloudflare on Web Security and Performance



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Deimos, a leading technology solutions provider in Africa, is thrilled to announce a new partnership with Cloudflare, Inc., the leading connectivity cloud company.

This strategic partnership marks a significant milestone in Deimos’ journey to become the leading cloud-native technology company on the African continent, while also reinforcing its commitment to driving innovation, security, and efficiency in the cloud services landscape.

This collaboration will serve as a catalyst for businesses seeking to bolster their online presence while safeguarding their digital assets from emerging threats. By integrating Cloudflare’s offerings and partnering with Deimos, African businesses can now use world-class technology while paying in their local currency.

This democratisation of advanced cloud services ensures that African businesses of all sizes, across various industries, including fintech, e-commerce, healthcare, education, can compete on a global scale while safeguarding their digital infrastructure.

“Today, we take another step towards our vision of becoming Africa’s premier cloud-native technology company. By combining Deimos’ extensive knowledge of the African market with Cloudflare’s cutting-edge solutions to make the Internet more performant, reliable, secure and private, we are empowering African businesses to thrive in the digital age,” said Andrew Mori, CEO Deimos. “This collaboration aligns with our mission to provide innovative and reliable technology solutions to businesses of all sizes across Africa.”

African businesses will benefit immensely from Cloudflare’s robust cybersecurity solutions, which protects them from threats like DDoS attacks, data breaches, and malicious bots.

This level of security is crucial for safeguarding sensitive customer information and maintaining business continuity, ensuring that companies can operate without disruptions or security breaches.

Furthermore, with Cloudflare’s extensive global network spanning 310 cities worldwide, African businesses can expect faster website loading times and reduced latency for their local and international customers.

This performance boost can lead to increased customer satisfaction and higher conversion rates, offering a competitive advantage in our fast-paced digital environment.

The Deimos-Cloudflare partnership represents a transformative force in Africa’s technology landscape, empowering businesses with state-of-the-art cyber security and performance solutions tailored to the unique needs of the continent. Together, Deimos and Cloudflare are paving the way for a new era of digital innovation, growth, and prosperity for African businesses.


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SERAP Tells Akpabio to Reject Wike’s Proposal in 2024 Budget



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Socio-Economic Rights and Accountability Project (SERAP) has urged Mr Godswill Akpabio, Senate president, to use his leadership position “to promptly reject the plan by Nyesom Wike, minister of the FCT, to spend N15 billion for the construction of ‘a befitting residence’ for Mr Kashim Shettima, vice president.”

SERAP Tells Akpabio to Reject Wike’s Proposal in 2024 Budget

SERAP also urged Akpabio to “assert Senate’s authority and constitutional oversight roles to reject the N2.8 billion on publicity for the FCTA and other proposed wasteful and unnecessary spending that may be contained in the 2023 supplementary budget and the 2024 budget proposed by President Bola Tinubu.”

In the letter signed by, Kolawole Oluwadare, SERAP deputy director ,at the weekend, the organisation said: “The plan to spend N15 billion on ‘a befitting residence’ for the vice president is a fundamental breach of the Nigerian Constitution and the country’s international anticorruption and human rights obligations.”

SERAP said: “The Senate has the constitutional duties to ensure that Mr Wike’s proposed spending is entirely consistent and compatible with constitutional provisions including his oath of office. All public officials remain subject to the rule of law.

“The National Assembly including the Senate has a constitutional responsibility to address the country’s debt crisis, including by rejecting wasteful and unnecessary spending to satisfy the personal comfort and lifestyles of public officials.”

The group added that, “The National Assembly cannot continue to fail to fulfil its oversight function. The Senate must assert and demonstrate its independence by checking and rejecting all wasteful and unnecessary spending by the executive.

“It would be a grave violation of the public trust and constitutional oath of office for the Senate to approve the plan to spend N15 billion on ‘a befitting residence’ for the vice president at a time when the Federal Government is set to spend 30% (that is, N8.25 trillion) of the country’s 2024 budget of N27.5 trillion on debt service costs.

“The Federal Government also plans to borrow N7.8 trillion to fund the 2024 budget. Nigeria’s public debt stood at 87.4 trillion naira as of June with 38% owed to external creditors including multilateral and commercial lenders.

“Should the Senate and its leadership fail to stop wasteful and unnecessary spending and rein in government borrowing, SERAP would consider appropriate legal action to compel the National Assembly including the Senate to discharge its constitutional oversight roles in the public interest.

“SERAP urges you to refer to the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) the allegations of corruption in the spending of the previously approved N7 billion for the construction of a new residence for the vice president.

“The ‘construction’ was reportedly abandoned but the whereabouts of the N7 billion remain unknown.

“The Senate has the constitutional competence and legitimacy to compel compliance with the Nigerian Constitution and the country’s international obligations.

“The Senate ought to assert its authority and vigorously exercise its constitutional oversight roles to check the apparently wasteful and unnecessary spending by Mr Wike especially given the growing debt crisis and the indiscriminate borrowing by the government.

“It is a travesty and a fundamental breach of the lawmakers’ fiduciary duties for the National Assembly to allow the executive to use the national budget as a tool to satisfy the comfort and lifestyle of public officials.

“Nigerians have a right to honest and faithful performance by their public officials including lawmakers, as public officials owe a fiduciary duty to the general citizenry.

“Cutting the N15 billion on ‘a befitting residence’ from the FTCA budget would be entirely consistent with your constitutional oath of office, and the letter and spirit of the Nigerian Constitution, as it would promote efficient, honest, and legal spending of public money.

“According to our information, the Minister of the FCT, Nysom Wike and the Federal Capital Territory Administration (FCTA) plan to spend N15 billion for the construction of ‘a befitting residence’ for the Vice-President, Mr Kashim Shettima.

“The plan is contained in the N67 billion FCT supplementary budget which President Bola Tinubu had on Tuesday transmitted to the National Assembly for approval.

“SERAP notes that Mr Wike proposed plan to spend N15 billion on a new residence for the vice president despite the recent allocation of N2.5 billion for the renovation of the current residence of the VP in the federal government’s supplementary budget already passed by the National Assembly and signed by President Tinubu.

“The House of Representatives has reportedly approved the plan to spend N15 billion on ‘a befitting residence’ for the vice president.

“The National Assembly has also approved another N3 billion for the renovation of the vice president’s residence in Lagos State. Mr Wike also plans to spend N2.8 billion on publicity for the FCTA.

“The proposed plan to spend 15 billion on ‘a befitting residence’ for the vice president is different from the


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