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Crisis brews in Ondo over ownership of Owena Oil and Gas

By BusinessNews Staff on May 27, 2014

The alleged moves by the Ondo State Government to transfer oil assets of Owena Oil and Gas Ltd to another entity, Owena Energy Company Ltd, is creating a lot of controversies between the state government and stakeholders in the oil company, THISDAY investigations have revealed.
It is feared that the development if not properly handled, could affect the oil firm’s investments as stakeholders are already counting losses owing to the lingering issue.
A source familiar with the issue linked the disagreement between the state government and entities believed to be equity holders in Owena Oil and Gas to breach of agreement in the Memorandum of Understanding (MoU) signed by parties in 2001.
According to the source, in 2001, Integrated Mineral Development Company Limited (IMDC), a firm of mineral development consultants and investors had approached the Ondo State Government under the administration of the late Governor Adebayo Adefarati for the purpose of providing the state government with consultancy.
The form also provided technical assistance and finance for the development of oil and gas businesses, which included establishment of a petroleum refinery, acquisition of oil assets, construction of an oil terminal and deep offshore supply base on a Public-Private Partnership (PPP) model.

Consequently, the MoU was signed by the parties on March 22, 2001, with equity shares of parties clearly stated.
According to the source, it was stipulated in the MoU that the IMDC and foreign partners shall own 70 per cent equity shares in the business while Ondo State would own the remaining 30 per cent.
The state government registered the private company, Owena Oil and Gas Ltd with its nominees as shareholders and IMDC related firms and Southwestern Hydrocarbon Company Ltd as special purpose vehicles.

The source claimed that ownership of the Owena Oil and Gas resided with individuals who were nominees of the state government and IMDC in the ratio of 30/30 per cent of the authorised share capital.

At the extra ordinary meeting (EOM) of the company on August 3, 2012, a resolution was said to have been passed, directing that the shareholdings reflect the true owners of the company.
Consequently, he said 40 per cent share interest was allotted to IMDC in trust for a technical partner/foreign investor as stipulated in the MoU signed by parties in 2001.
At the EGM said to have been convened in accordance with the clause 17 and 42 of the company’s Articles of Association, a law firm, Enitan Associates was appointed as Legal Advisers/Company Secretary for the Owena Oil and Gas and Samuel Kolajo, the Executive Vice -Chairman and Ambassador Ebenezer Adigun as Directors.

He said notice of the EGM was conveyed to all the directors of the company but Ondo State failed to send any representative to the meeting.

The resolution reached at the well-attended EGM, according to him, was conveyed in writing to the Corporate Affairs Commission (CAC) and other relevant agencies by the company secretary.
The source said weeks after the EGM, the state government, through its Attorney General and Commissioner for Justice wrote the CAC insisting that the state was not a party to the EGM and the resolutions passed at the meeting.

The letter also stated that Owena Oil and Gas was wholly owned by Government of Ondo State and that at no time did the government assign its ownership of the company to any individual or corporate organisation and did also not relinquish its shares in the company to any individual.

He said prior to the present administration in Ondo State, the state government enjoyed peaceful relationship with partners in the business and never had issues with IMDC nominees on the board of the company in respect of the shareholding structure.
The shareholdings, the source further stated, were held by individuals, nominated by each party to the MoU and the shareholding arrangement was recognised by previous administrations from the tenure of Adefarati to the late Olusegun Agagu.

According to the source, the individuals nominated by Ondo State Government had been changed over time with due process, and several requests to the Governor Olusegun Mimiko administration to nominate new representatives after the tenure of the former representatives expired were rebuffed.
He said the worrisome dimension to the issue was the attempt by the state government to unilaterally transfer oil assets of Owena Oil and Gas, including the OPL 241, which it jointly owned with Oilworld to another entity, Owena Energy Company Ltd without the knowledge, consent or participation of the board of the company (Owena Oil and Gas).
He also alleged that about N700 million in the company’s account with a commercial bank was also allegedly withdrawn without the knowledge and approval of the board by individuals who are not connected with the company, who allegedly acted on the directives of the state government.

It was further alleged that a government official unlawfully received over $450,000 from a firm, Sirus Petroleum Company Ltd as share of the $1,000,000 paid for the purported sale of 40 per cent of Owena Oil and Gas’ 45 per cent interest in Ororo Marginal Field 95, of which another firm, Guarantee Petroleum Ltd owns 55 per cent, without the knowledge or approval of the board.

It was learnt that efforts to resolve the issues amicably were rebuffed by the government, which vehemently refused to attend meetings conveyed by parties in the business.

Providing clarifications on the issue, Ondo State Commissioner for Information, Mr. Kayode Akinmade, said Owena Oil and Gas Ltd is 100 per cent owned by the state.
He said Kolajo claimed he has 30 per cent equity in the company, but there was no evidence he has any shareholding interest in the company.

Akinmade said Kolajo was only desperate to corner the company’s funds and connived with his lawyer, Enitan Associates and some corrupt persons to falsify documents, which was sent to the CAC, DPR , Ministry of Petroleum and other relevant agencies, claiming that are equity holder in the company.

According to him, when it was discovered that the company’s documents had been falsified, Kolajo, who he said had the backing of some corrupt top people, Mimiko’s government promptly alerted the CAC and other agencies and departments. He said the Economic and Financial Crimes Commission (EFCC) investigated the matter and recommended that Kolajo’s lawyer, who signed the documents knowing them to be forged, be arrested and prosecuted.

[This Day]

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