Kogi Govt Institute Legal Action Against Dangote Group Over Ownership of Obajana Cement

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The Kogi State Government on Tuesday commenced legal action over the controversial ownership of Obajana Cement Company, now Dangote Cement Plc.

The legal action instituted on behalf of the state by Chief Joseph Daudu, at the High Court of Kogi State, Lokoja, has Dangote Industries Limited as the sole defendant.

Specifically, Kogi state government is seeking the nullification of the 2002 and 2003 agreement between it and Dangote group on the grounds that the agreement lacked clear consideration of what should pass from Dangote to the state.

In the originating summons, the state government wants the court to determine whether upon careful examination and consideration of the agreements made between the Kogi State Government and Dangote Industries Limited on July 30, 2002, and February 14, 2003, respectively, it is not apparent that consideration (an essential ingredient of a valid contract) is lacking?

The government is also asking the court to determine whether in view of the clear lack of consideration (an essential ingredient of a valid contract), the agreements made between the Kogi State Government and Dangote Industries Limited on July 30, 2002 and February 14, 2003, respectively, are not null and void?

In the event that the above questions are answered in the affirmative, the state government prayed the court to declare that the agreements made between the Kogi State Government and Dangote Industries Limited on July 30, 2002 and February 14, 2003, respectively, “lack consideration, which is an essential ingredient of a valid contract”.

The government is also asking the court to declare that the clear lack of consideration in the agreement made between the Kogi State Government and Dangote Industries Limited on July 30, 2002 and February 14, 2003, respectively, render both agreements null and void.

The state government is also seeking the following reliefs: “A declaration that Dangote Industries Limited cannot take any benefit, interest or rights from the incompetent agreements entered into on July 30, 2002 and February 14, 2003 respectively, having failed to furnish any consideration to the Kogi State Government.

“An order nullifying the agreements entered into on July 30, 2002 and February 14, 2003 respectively, for lack of consideration.

“An order of perpetual injunction restraining Dangote Industries Limited, any of its agents or assigns from further utilizing and or taking any benefit(s) from the agreement dated July 30, 2002 and February 14, 2003 between the Kogi State Government and Dangote Industries Limited.”

In a nine paragraph affidavit deposed to in support of the suit, the Kogi State government claimed that the Obajana Cement Company was solely registered in 1992 by the state government with registration number RC: 208767.

Deponent of the affidavit and Secretary to the Kogi State Government, Mrs. Folashade Ayoade, submitted that the sole purpose of establishing Obajana Cement Company was to mine the huge lime stone deposit in Obajana and consequently produce cement for the economic benefit of the people of Kogi State.

She confirmed that the Kogi State government and Dangote Industries Limited entered into two agreements on July 30, 2002 and February 14, 2003, for the purpose of producing cement for the economic benefit of the people of Kogi State.

However, she noted that no benefit by way of consideration passed from Dangote Industries Limited to the state government.

In the agreements although the state solely owns the company it had however transferred 90 per cent of its total shareholding to Dangote Industries Limited.

Parties also agreed that that they would be responsible for the funding of the project in equal proportions to their equity shareholding.

In the agreements the state shall be at liberty to sell up to 50 per cent of its 10 per cent equity in Obajana cement company to Kogi State indigenes by public offer or privilege within three months of comment of the project.

The agreement in addition noted that Kogi State shall not be entitled to lay any claim to any sum that may have accrued on its shareholding in dividends in the event of failure to meet its funding obligation as provided in the agreement.

No date has been fixed for the hearing of the suit.


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