N10bn scandal rocks NIPOST’s restructuring plan

The Senate has ordered a probe into the N10 billion in restructuring funds released to NIPOST by the Federal Ministry of Finance.

This followed the discovery of irregularities in the agency’s subsidiaries, NIPOST Properties and Development Company and NIPOST Transport and Logistics Services Limited.

In its resolution of December 30, 2023, the Red Chamber said it uncovered the alleged illegal transfer of federal government shares in two NIPOST subsidiaries to private individuals.

The discovered infractions sparked outrage, prompting the lawmakers to call for immediate action.

An investigation shows that some individuals in key positions within the Bureau of Public Enterprises (BPE) and NIPOST were listed as shareholders of the two NIPOST subsidiaries.

The Corporate Affairs Commission (CAC) records confirm that as of November 8, 2023, some top officials of BPE control significant shares in the subsidiaries.

Responding to these discoveries, the Senate passed a resolution on December 30 last year.

The resolution declared the NIPOST subsidiaries in question “irregular and illegal” and recommended their immediate winding-up and deregistration.

The Senate resolution goes beyond immediate action; it demands a thorough investigation into the N10 billion voted by the Ministry of Finance for NIPOST’s restructuring and recapitalisation.

Should evidence of “injudicious utilisation” surface, the Senate said the committee responsible must recover the full amount.

The resolution reads: “The sum of N10 billion released by the Ministry of Finance for the proposed NIPOST restructuring and recapitalisation be investigated, and the funds fully recovered if established to be injudiciously utilised by the relevant committee of the Assembly charged with the responsibility of fiscal prudence.”

A high-ranking government official, who spoke on the condition of anonymity, painted a picture of the potential consequences of the alleged malfeasance.

The official highlighted the immense value of NIPOST’s property assets, estimated at trillions of naira, and expressed alarm at the prospect of the assets falling into private hands through share inheritance.

“Imagine 15 years from now when none of us is on the scene, their children can come and lay claims to the shares, and in the eyes of the law, those shares will belong to whoever their next of kin will be, for government assets,” the official told The Nation.

He further emphasised: “The alleged share transfers represent a blatant disregard for established legal frameworks. Even the recently enacted Petroleum Industry Act (PIA) allocates shares to corporate entities, not individuals.”

ADVERTISEMENT

It was learned that after receiving a letter on the infraction, the individuals involved hurriedly reassigned their shares in NIPOST Transport and Logistics to three government entities: NIPOST (80%); BPE (10%) and the Ministry of Finance Incorporated (MOFI) (10%).

The Nation also discovered controversial shareholding arrangements that have led to changes in the ownership structure of NIPOST Properties and Development Company.

The changes reinforced concerns about the legality and transparency of the original share transfer.

As the official noted, “BPE has no business holding shares in NIPOST, and the involvement of an MDA in shareholding directly contradicts established procedures.”

The government official who raised doubts over the credibility of the transaction stated that “the Senate is unwavering in its stance, demanding investigation and rectification”.

“The NIPOST scandal raised serious questions about corporate governance and asset protection within public institutions. The Senate’s swift action and call for investigations are commendable, but ensuring swift, comprehensive, and transparent results is paramount. The Nigerian public deserves clear answers and the assurance that their national assets are being protected with utmost integrity,” the official said.

Reacting to enquiries from The Nation, a BPE official said: “The NIPOST subsidiaries were registered in 2020 and at the time, the CAC portal only allowed individuals to be shareholders as there was no option of using companies as shareholders.

“This was because the commission wanted to hold people accountable in respect of shares ownership. Subsequently the CAMA 2020 became operative in January 2021, which was six (6) months after the Companies were registered.

“The portal was thereafter updated to allow companies to hold shares but with representatives. The shareholding of NIPOST subsidiaries has been duly corrected to reflect the intent of the subscribers.”