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Wednesday, May 27, 2009

Uncertainty engulfs NITEL

... Over search for new core investors

SEVENTY-TWO hours to the expiration of the May 30 deadline allowed for Expression of Interest (EOI) for the sale of, at least, 51 per cent of the Nigerian Telecommunications Plc (NITEL) to new core investor, uncertainty appeared to have surrounded events leading to the exercise.

Transnational Corporation (TRANSCORP), the current owners of the 51 stake in NITEL took over the management in 2005 after a widely criticized ‘preferred bidder’ option purportedly concluded at the presidency and ever since then it has been crisis after crisis either on the part of Transcorp or NITEL and its mobile subsidiary, MTel.

Coupled with the inability of Transcorp to meet the desire of the Federal Government and NITEL workforce, it was agreed that the current stake of 51 per cent be offered for sale, which could even be adjusted upward to 71, if need be.

The height of present uncertainty within the Information and Communication Technology (ICT) sector with particular reference to NITEL, which built up due to several issues capable of forestalling the ‘unending’ efforts to dispose NITEL by the Bureau for Public Enterprise (BPE), were drawn from the turn of events in recent weeks leading to the deadline for the search for new core investor.

For instance, the unrest of the workforce since Transcorp took over, created a faction and latest exposure on alleged fraudulent activities in high circles within the organization, leading to the arrest of NITEL board chairman, Mr. Mr. Tom Iseghohi and some top management staff, which came after the purported sack of the American chief executive, Mr. Kevin Caruso, few weeks to the deadline for the expression of interest.

Piqued by the inability of NITEL and Transcorp management to settle their salary arrears for the past 11 months, NITEL workers have decided to take their destinies in their hands by engaging debtors of the organisation, including the First Bank of Nigeria Plc, for its inability to remit over N1.1 billion collected on behalf of NITEL in the past six years.

Industry observers said that as at press time, there is yet no hope for any keen core investor for the moribund NITEL.

While the closure of this bidding process is said to be a key trial for the newly appointed Director General of BPE, Dr. Christopher Uloneme Anyanwu, given the unfruitful attempts of his predecessor, Mrs. Irene Chigbue in the past four years.

BPE in its addendum call for EOI for the sale of at least 51 per cent equity stake in NITEL plc, noted that as published at the end of March 2009, the shareholders of Nitel “The Shareholders” thereby expressed their willingness to consider selling NITEL and its wholly-owned Global System for Mobile communications (GSM) subsidiary, MTEL, either as combined or as two separate entities.

According to BPE, bidders will have the opportunity to submit proposals for the acquisition of the combined operation or for the acquisition of the two separated companies.

“At the submission of their Expressions of Interest, interested parties may indicate their preliminary preference to bid for either, NITEL, MTEL or both,” part of the BPE public statement read.

Equally, NITEL shareholders said they were aware of the need to eliminate from the proposed transaction any uncertainty over the amount of debt carried by both companies before conclusion of the transaction.

The prequalification criteria for the EOI stage, they said, have been adjusted to include the minimum of 1.2 million aggregate fixed and/or mobile subscribers; telecom operators with operations in only one country are eligible to apply.

“Where interested parties express interest as a consortium including a qualified telecom operator and other investors, the telecom operator will be required to own at least 20 per cent of the consortium’s post-acquisition equity,” it read, stressing that with the all other pre-qualification criteria remain unchanged, preference will however be given to investors that meet the original published prequalification criteria in its entirety.

BPE pointed out that every ‘Expressions of Interest’ must be submitted with the documentation supporting qualification, latest Saturday, May 30, 2009 by 5 pm Nigerian time to “The Director General, Bureau of Public Enterprises(BPE) office in Garki, Abuja.

ITRealms Online recalls that just last week, embattled NITEL employees under the aegis of the Senior Staff Association of Communications, Transport and Corporations (SSACTAC), in Abuja gave the management of First Bank Nigeria Plc, a seven-day ultimatum within which to clear a $7 million debt (about N1.1billion) owed the organisation or face the anger of the workers, who report indicated were determined to prevent the bank from carrying on with its services.

A letter addressed to the Managing Director of the bank which was made available to ITRealms Online, weekend in Abuja, SSACTAC said, the in-house union has been left with no other option than to issue a seven-day notice to the bank to clear the matter in both parties interest to avoid crisis.  

Stating that the letter signed by the President and Deputy President of the Association, Comrades E.Y. Kazzah and Gabriel Abah, listed the debt accruing from non remittances of collection, unauthorised debits of account and letters of credits not completely drawn with the bank since 2002.

However, most outrageous aspect of the pervading crisis in NITEL was the fraudulent case of millions of dollars which blew open earlier this month, involving the Group Managing Director of Transcorp and who also is the chairman of NITEL board, Mr. Tom Iseghohi and two other management staff, namely, the company secretary, Mohammed Buba and director of operations, Mr. Mike Okoro, even as they may be facing criminal charges of fraud, cheating, theft, obtaining by false pretence and breach of trust, money laundering and forgery among others.

Trouble was said to have started for Messrs Tom Iseghohi and Co, when he purportedly sacked Mr. Kevin Caruso, who discovered to his chagrin the shortchanging that occurred in his monthly allowance of about $75,000 (about N11m), whilst he was being paid just $25,000.

This eventually linked to the intervention of security agencies, mostly the State Security Services (SSS), who effected the arrest.

Speaking to ITRealms Online at the weekend, the deputy president of the Senior Staff Association of Transport, Telecommunications and Corporations, (SSATTC) MTel branch, Mr. Chidi Oparauwakwe, said that they are praying, because “we cannot continue like this with Transcorp.”

Meanwhile, the staff of Transcorp recently wrote the corporation, saying that it has nothing more to offer and apparently handicapped in meeting the expectations of its stakeholders.

Those who spoke to ITRealms Online on the state of their respective organizations, both the factional president of the Senior Staff Association of Transport, Telecommunications and Corporations, (SSATTC) Nitel branch, Comrade Elias Kazzah, the deputy president of the union at MTel, Mr. Chidi Oparauwakwe, and the purportedly deposed President, National Association of Telecommunications Employees (NATE) at NITEL, Mr. Charles Amankwe, all agreed that Transcorp has overstayed its welcome.

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