As Nigerians grapple with soaring petrol prices and widespread scarcity, the firm currently responsible for importing petrol into Nigeria has controversially changed its ownership.
The downstream arm of the Nigerian National Petroleum Company Limited (NNPC Retail) officially no longer exists after it asked a court to transfer its ownership and properties to a firm it claimed to have bought.
PREMIUM TIMES reported NNPCL’s controversial purchase of OVH Energy Marketing Limited and how the purchased company essentially took over the management of the buyer, which an NNPC insider described as “the most ridiculous business acquisition in the world.”
OVH Energy
OVH Energy
NNPCL bought OVH from Nueoil Energy Limited a month after Nueoil Energy acquired OVH in September 2022.
However, two months ago, the three firms – NNPC Retail, OVH and Nueoil – jointly filed a petition at the Federal High Court in Lagos. In it, they asked the court to grant eight orders, including an order that NNPC Retail and Nueoil “be dissolved without being wound up” and that “the resultant company from the scheme shall be” OVH.
Dangote Refinery
The court granted all the eight orders.
The court’s decision was then published in the official gazette of the Nigerian government.
Justice C.J. Aneke delivered the ruling, which was based on a petition filed on 24 June by NNPC Retail Limited, Nueoil Energy Limited, and OVH Energy Marketing Limited.
The affidavit of suit No: FHC/L/CS/921/2024 was deposed by Valentina Ine Kodjo-Soroh.
Meanwhile, the affidavit, with 17 exhibits attached and a written address signed by Abimbola Akeredolu, a Senior Advocate of Nigeria (SAN), was filed at the court registry in Ikoyi, Lagos.
The Prayers
According to the Certified True Copy (CTC) of the court’s order, published on 18 July in Punch Newspaper, the petitioners requested the court to sanction their merger as agreed upon by their shareholders during a court-ordered meeting.
The petitioners further asked that all tax attributes, unutilised 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.
Audience Survey
The petitioners also sought the cancellation of the entire share capital of NNPC Retail and Nueoil Energy Limited and requested that all legal proceedings, claims and litigations pending or contemplated by or against the NNPC Retail and Nueoil Energy Limited be continued by or against the OVH Energy Marketing Limited after the scheme becomes effective.
Additionally, they asked for an order to dissolve NNPC Retail and Nueoil Energy Limited without being wound up. They also sought an order that the resultant company from the scheme shall be OVH Energy Marketing Limited.
They told the court that the merger should be effective from 1 January 2024.
They also told the court to make such incidental, consequential, and supplemental orders as necessary to ensure that the merger is fully and effectively implemented.
The Ruling
Justice Aneke granted all the prayers of the petitioners, 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.
The court also made the following orders to carry the merger into effect.
“That an order is hereby made that all assets (including all tax attributes, unutilised capital allowances, tax losses, withholding tax credits and other refunds available, but excluding the 2nd petitioner’s shares in the 3rd petitioner), liabilities and business undertakings, including real property and intellectual property rights of the 1st and 2nd petitioners be transferred to the 3rd petitioner subject to the terms and conditions set out in the scheme without any further act or deed.
“That an order is hereby made that the entire share capital of the 1st and 2nd petitioners be cancelled. That an order is hereby made that all legal proceedings, claims and litigations pending or contemplated by or against the 1st and 2nd petitioners be continued by or against the 3rd petitioner after the scheme becomes effective.
“That an order is hereby made that the 1st and 2nd petitioners be dissolved without being wound up. That an order is hereby made that the resultant company from the scheme shall be the 3rd petitioner,” the judge ruled.
The ruling signifies that NNPC retail, which is currently responsible for importing virtually all of Nigeria’s petrol, no longer exists and is now wholly owned by OVH Energy Marketing Limited.
Background
NNPC Ltd. 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 operates 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 exposed 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.
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 staff told this newspaper.
In July 2023, the House of Representatives, following the adoption of a motion moved 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.
In September 2023, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, while appearing before the committee investigating the acquisition, said NNPC Ltd now operates 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 intends to apply for operating licenses for the facilities under OVH Energy Marketing Limited.
NNPC Speaks
Olufemi Soneye, the chief corporate communications officer of NNPC Ltd, confirmed the court order to PREMIUM TIMES.
He said the mandate of NNPC Retail and the working conditions of its staff remain unchanged.
“The working conditions of NNPC Retail staff remain unchanged following the court order. The mandate of NNPC Retail also remains consistent, ensuring energy security across its retail outlets nationwide and continuing to serve its customers effectively,” Mr Soneye wrote in a text response to our enquiry.
Workers at NNPC Retail told PREMIUM TIMES that they are aware of the court order and the gazette but are yet to be officially informed.
“I am aware of the gazette, it’s criminal,” one staff member told this newspaper. “They have not informed us officially about it. It is part of their plans to take over the company.”
“Nothing has changed in the working conditions of NNPC Retail. You see, it’s a gradual process for them to take over NNPC retail; that’s their plan,” the aggrieved staff member said, asking not to be named for fear of victimisation.
He expressed optimism that the whole acquisition will be challenged in court in the future.
Another staff member questioned how a profit-making NNPC Retail before the acquisition was now subservient to OVH, which NNPC Retail bought.
“It is the most ridiculous business acquisition in the world, whether in the oil and gas or banking sector,” the source said. “We bought them because we were making profits and needed expansion and they were struggling. Now they own us. How do you explain that? One day, Nigerians will know the truth about this NNPC-OVH saga.”