Former President Olusegun Obasanjo was Tuesday alleged to have ordered the Bureau of Public Enterprises (BPE) to swap the debt equity of African Petroleum (AP) to pave way for Zenon Petroleum, owned by Femi Otedola to buy over the company.

This was revealed at a public hearing by the House of Representatives Committee on commercialisation and Privatisation on the controversial sale of AP.

As a result of the allegation and other startling revelation on the deals culminating in the acquisition of AP by Zenon Oil, the committee decided to summon the former managing director of Nigerian National Petroleum Corporation (NNPC), Engr.
Funsho Kupolokun, the Director General of BPE, Mrs. Irene Chigbue and Director General of Nigerian Stock Exchange, Mrs. Ndi-Okereke Onyuike to appear before the investigative panel today.

Chairman of Sadiq Petroleum, Sir Peter Okocha, who petitioned the National Assembly had claimed that the AP shares were forcefully acquired by the Federal Government through the NNPC and wanted it to be given back to his company.

Alhaji Ibrahim Abubakar, who is in charge of oil and gas at the BPE, while testifying said although BPE was not involved in the debt equity conversion, it was aware that the former president gave the orders.
“The BPE was not involved in the debt equity swap conversion or the final investiture to Zenon Petroleum Ltd, we were aware that approval was granted by the former president (Obasanjo), he told the committee.

According to him, after Sadiq Petroleum had successfully taken over as the core investor, they later uncovered a debt of about N40 billion in the company which was concealed by the former management of the company prior to privatisation.

He added that N23 billion of this debt was trade debt owed to the NNPC, which the Federal Government approved its conversion to equity.

Chairman of Sadiq Petroleum in his presentation before the panel, said his closeness to former vice president Atiku Abubakar was responsible for the forceful take over of the company from him, explaining that former President Obasanjo had asked him on several occasions if Atiku was the owner of Sadiq Petroleum, which he denied.

“On that ground, he (Obasanjo) asked me several times when I met him whether Atiku owned Sadiq Oil. I presented the article of association and every document. I presented everything else, yet the president could not believe me. He told me that anything that has to do with Sadiq Oil, he does not want to talk about it,” he alleged.

He said when they bought the company, he was made to believe that its debt profile was only N6.5 billion, but was surprised to discover that AP was owing N26.5 billion.
According to him, following the discovery, Sadiq Oil made spirited efforts to get the Federal Government cancel the debt leading to the constitution of the Justice Nkong Judicial Commission of Iinquiry whose report never saw the light of day.

He said that former Group Managing Director (GMD) of NNPC, Mr.Gaius Obaseki who knew the problems decided to play down the repayment issue of over N26.5 billion, because both the previous GMD and chairman, Abba Gana and Rev. Omomukuye were both NNPC staff, hoping that the government white paper would have given them the much needed reprieve.
Representatives of Aminu Ibrahim & Co, the chartered accounting firm that audited the AP accounts told the panel that AP was indebted to the tune of N86 billion with N6.8 billion belonging to banks.

But the Securities and Exchange Commisssion (SEC), in its position noted that it received a letter from a stockbroker, Unec Securities for the conversion of AP debt to equity amounting to N10.195 billion in favour of NNPC on December 24, 2005.

Representative of BPE, Charles Odorah disclosed that the conversion was duly approved by the AP.
Chairman of the committee, Hon. Njidda Gella consequently ordered that Zenon oil, Engineer Funsho Kupolokun and BPE DG, appear before the panel today to explain their position in the sale of AP.