The Benue State Government has initiated a legal battle to reclaim its purported stake and entitlements in Dangote Cement Company Limited, stemming from a Rights Issue that transpired in 2005. The state government, through its investment arm, Benue Investment and Property Company (BIPC), asserts it is entitled to 111,438,493 shares, currently valued at N65.8 billion (as of August 1, 2024). This claim originates from the privatization process in 2005 when Dangote Cement, formerly Benue Cement Company Plc, was acquired by the Dangote Group. BIPC maintains that it has remained a substantial shareholder since the takeover, with clearly defined benefits that have yet to be realized.
Central to BIPC’s argument is a Terms of Settlement agreement purportedly reached with Dangote Cement following the acquisition. This agreement, which served as the basis for withdrawing a lawsuit filed against Dangote at the Security and Investment Tribunal (Suit No. IST/APP/02/2006), outlined specific provisions for BIPC’s continued involvement in the company. These provisions included BIPC holding a Deputy Managing Director position, a 10 percent equity stake in Dangote Cement, and two seats on the company’s board for representatives of the Benue State Government. BIPC alleges that Dangote Cement has failed to honor these agreed-upon terms, thereby depriving the state of its rightful benefits.
BIPC’s Managing Director, Dr. Raymond Asemakaha, expressed the state’s frustration with Dangote Cement’s perceived disregard for their claims. He detailed the efforts made by BIPC to amicably resolve the matter, including numerous attempts to engage with Dangote Cement’s management. However, according to Asemakaha, these attempts were met with “disdain,” forcing BIPC to pursue legal recourse. He outlined the steps taken, including instructing external solicitors to formally demand the allotment of the shares and payment of accrued dividends and other entitlements. Asemakaha emphasized that BIPC’s actions are consistent with corporate governance principles and administrative due process.
Asemakaha further stated that BIPC had sent several letters to Dangote Industries regarding the disputed shares and entitlements, none of which have received a response. He underscored BIPC’s commitment to transparency by making these correspondences available for public scrutiny. This press conference served as a public declaration of BIPC’s intent to pursue legal and judicial avenues to enforce the Terms of Settlement and secure the state’s alleged rightful claim. The lack of response from Dangote Cement underscores the growing tension between the two entities.
The Benue State Government’s claim presents a significant challenge to Dangote Cement. If successful, it could result in a substantial redistribution of equity and influence within the company. The N65.8 billion valuation of the disputed shares represents a significant sum, and the added requirement for board representation could shift the power dynamics within the company. The case also raises questions about the privatization process in 2005 and the extent to which the terms of the takeover were adhered to.
As the legal battle unfolds, it will be crucial to examine the validity of the Terms of Settlement agreement and the reasons behind Dangote Cement’s alleged non-compliance. The outcome of this case could have far-reaching implications for corporate governance and transparency in Nigeria, particularly within privatized companies. The lack of response from Dangote Cement adds to the intrigue, leaving many questions unanswered. The public and stakeholders will be closely observing the legal proceedings as they unfold, anticipating a resolution to this significant corporate dispute.
