posted September 17, 2024
The renaming of OVH Energy Marketing Limited as NNPC Retail Limited is being gleaned as a complex legal and corporate maneuver involving the dissolution of NNPC Retail and its integration into OVH Energy, that calls for critical inquisition.
According to a report by Premium Times newspaper, the sequence of events began when NNPC Retail Limited, a subsidiary of the Nigerian National Petroleum Company Limited (NNPC), was dissolved through a court ruling in August 2024. This ruling transferred ownership of NNPC Retail’s assets to OVH Energy Marketing Limited, a company NNPC had previously purchased.
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In essence, the court ordered that NNPC Retail cease to exist as a separate entity and that OVH Energy Marketing Limited would become its successor.
This corporate restructuring came after NNPC Ltd’s controversial acquisition of OVH Energy Marketing Limited in 2022, which had been earlier acquired by Nueoil Energy. Following this transaction, both NNPC Retail and Nueoil Energy were dissolved by the Corporate Affairs Commission (CAC), while OVH Energy remained active, effectively taking over the role of NNPC Retail.
The renaming of OVH to NNPC Retail Limited was formalized on September 2, 2024, when the CAC issued a certificate confirming the change, signed by the Registrar General, Hussaini Magaji, SAN.
What makes this case noteworthy is the peculiar business arrangement where the purchased company (OVH Energy) essentially assumed control over the management and assets of the buyer (NNPC Retail), raising concerns about the strategic and financial rationale behind the deal. An insider at NNPC described this as “the most ridiculous business acquisition in the world,” underscoring the unusual nature of the takeover.
This scenario highlights the intricate corporate restructuring in Nigeria’s downstream oil sector and brings to light questions surrounding the governance and oversight of key government assets like NNPC Retail.
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The petitioners further asked that all tax attributes, unutilized capital allowances, tax losses, withholding tax credits and other refunds available, but excluding the Nueoil Energy shares in the OVH Energy Marketing Limited, liabilities and business undertakings, including real property and intellectual property rights of the NNPC Retail and Nueoil Energy Limited be transferred to the OVH Energy Marketing Limited subject to the terms and conditions set out in the scheme without any further act or deed.
The court granted all eight orders, ordering that the merger be effective from 1 January. The court also mandated that all necessary incidental, consequential, and supplemental orders be made to ensure the full and effective implementation of the merger.
Miffed by all this opaque movements, the presidential candidate of the Peoples Democratic Party (PDP) in the last election and former vice president of Nigeria, Atiku Abubakar, expressed astonishment at the operations of the NNPC Ltd and how the government-owned oil company had put its retail arm under the control of OVH, which he alleged was owned by Wale Tinubu, a relative of President Bola Tinubu.
Atiku lamented that the suggestion that he has canvassed for years which was to privatize NNPC and increase its transparency has been overshadowed by what he describes as the “criminal hijack of the NNPC by corporate cabals around the current president,” according to the statement signed by his Media Adviser, Paul Ibe, said.
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The NNPC as promptly responded to Atiku, saying that at the time it acquired OVH in 2022, Oando (in which Wale Tinubu has equity interest) had fully divested its equity in OVH to the two other partners, Vitol and Helios.
The NNPC explained that Oando began its divestment in 2016, with Vitol and Helios coming in as equity partners, leading to the change of name from Oando to OVH. By 2019, according to NNPC Ltd, Oando had fully divested its equity interest in OVH resulting in Vitol and Helios holding 50 per cent equity interests respectively.
A track of the long-range planning recorded that NNPC Ltd had announced in October 2022 the acquisition of OVH Energy Marketing Limited’s downstream assets. This acquisition would merge OVH Energy with NNPC Retail, a subsidiary of NNPC Ltd.
The assets acquired from the company, which operated Oando filling stations, also include a reception jetty with 240,000 metric tonnes monthly capacity and eight liquefied petroleum gas plants, three lube blending plants, three aviation depots, and 12 warehouses.
But in June 2023, PREMIUM TIMES’ investigation on the acquisition revealed the secret deals and the complicated ownership structure that left managerial control of NNPC Retail in the hands of OVH Energy Marketing.
The report also exposed that OVH Energy Marketing may not have owned as many filling stations as it claimed during the merger talks.
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In addition, the report highlighted how Huub Stokman, an expatriate and former Chief Executive Officer of OVH Energy, emerged as the new Managing Director of NNPC Retail, a development that further compounded the structure of NNPC Retail.
This newspaper also found out that the acquisition of OVH Energy had turned NNPC Retail into a toxic workspace, with officials of the former taking over the latter’s running.
“Did we acquire them, or did they acquire us? How come they are now the ones in the management,” one NNPC Retail staffer told this newspaper.
In July 2023, the House of Representatives, following the adoption of a motion move by Miriam Onuoha (APC, Imo), directed NNPC Ltd to suspend the acquisition pending an investigation by its committee.
Consequently, the House set up an ad-hoc committee with Hassan Nalabraba (APC, Nasarawa) as the chairman and commenced an investigation into the controversial deal in September 2023.
The ad-hoc committee requested the NNPC Ltd to furnish it with information about “registration documents/history from CAC for OVH, Nueoil, and NNPC Retail Limited (NRL), Board Resolution of NNPC Ltd on purchase of OVH, Audited Financial Statement and Management Accounts from 2015 to Date OVH, Nueoil, NRL and NNPC Ltd” and the “payroll from 2015 to date for NRL and OVH, Board Resolution of NRL/CHQ for movement of head office to Lagos and evidence of Tax Payments for NRL and OVH from 2015 to date.”
The committee also requested documents on all financial transactions associated with the acquisition, including payment records and fund transfers.
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In September 2023, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, while appearing before the committee investigating the acquisition, said NNPC Ltd operated like a private limited liability company and entered the commercial relationship with OVH to take over market shares in the downstream petroleum market shares. He said NNPC Ltd did nothing wrong in the acquisition.
Meanwhile, some NNPC Retail ‘concerned staff’, in a letter dated 25 September 2023, addressed to the chairman of the House Committee, and signed on their behalf by Mohammed Muazuo, noted that the request by the committee was not met.
In October 2023, Mr Nalabraba presented a report on the investigation.
In February, the House of Representatives dissolved the committee investigating the controversial acquisition after the panel presented a report many lawmakers described as “suspicious and shabby.” The task was subsequently transferred to the House Committee on Petroleum Resources (Downstream) for a fresh investigation.
In January, NNPC Ltd announced that it was unable to complete the OVH acquisition. It said it intended to apply for operating licences for the facilities under OVH Energy Marketing Limited.
Source: PREMIUM TIMES