The Enugu State chapter of the Labour Party, LP, and the Enugu State government are not on the same page as the government consummates an agriculture partnership agreement with Pragmatic Farms Limited.
The partnership between the Enugu State Government and Pragmatic Farms Limited, worth N100 billion, is for the revival of the moribund United Palm Products Ltd (UPPL).
However, the Labour Party in the state had opposed the project, alleging that it might be a conduit to syphon the state’s resources.
The party, in a statement signed by its Chairman, Comrade Casmir Uchenna Agbo, and Publicity Secretary, Onuora Odo, questioned the propriety of the transaction, pointing out that the company in question was allegedly registered only four days before it signed the agreement with the Enugu government.
It accused the government of planning to use the alleged newly registered company as a conduit to syphon the resources of the state, saying that there was no indication that the company has the track record and capacity to manage the enterprise.
“We are raising this alarm because the entire project smells of large-scale fraud and as a responsible and responsive political party, we owe it to the people of the state, the duty of drawing their attention to what we see as economic rape and corrupt tendencies.
“Checks at the Corporate Affairs Commission (CAC) have created a cloud of suspicion around the project, following our discovery that Pragmatic Palms Limited was registered only on May 6, 2024, four days before the partnership agreement was signed with the Enugu State Government on May 10, 2024,” the Labour Party claimed.
The party demanded that the state governor should tell the people of the state “when discussions on this partnership began and how he concluded and signed the deal within four days of incorporating the company”.
“We are worried because a lot of things in the transaction do not appear straightforward.
“We are also worried that while on its website, Diamond Stripes Limited claimed it was in the business of electricity generation, ports services and the building of silos, data on its registration documents at the Corporate Affairs Commission indicated that it was registered ‘to carry on the business of the manufacturer, importation, exportation, distribution, promotion, sales, supply and marketing of all types of products, materials, agents, reagents and equipment to engage in the business of real estate and property.
“We are therefore calling on the good people of Enugu State to be vigilant.
“We also invite the anti-corruption agencies to investigate this transaction with a view to saving the people of Enugu State from what looks like a bogus transaction.”
Although it welcomed efforts at reviving moribund state government-owned projects, the party lamented what it said was the “crushing tax siege” on the state and called for judicious use of the resources.
However, the Senior Special Adviser to the Governor on External Relations, Mr Uche Anichukwu, has explained that the Enugu State Government was not releasing N100 billion or any dime to Pragmatic Palms Ltd.
Aninuchukwu, in a statement he made available to journalists, said, “Instead, Pragmatic Palms Ltd, a Special Purpose Vehicle (SPV) for the partnership, will finance the revitalisation of UPPL. Pragmatic Palm Ltd. will provide finance for 60 per cent of the transaction value, while the Enugu State Government will provide the plantations valued as 40 per cent equity.”
Anichukwu said UPPL is one of the numerous initiatives of the late Premier of the defunct Eastern Region, Dr Michael Okpara, and had been moribund for decades.
He said, “Because several parties/investors are involved, it became imperative, as is the best international practice, to register a Special Purpose Vehicle (SPV) as the platform to transact the deal. Pragmatic Palms Ltd. was duly incorporated before the signing of the agreement.
“As demanded by the Enugu State Government, Pragmatic Palms Ltd. provided a guarantor, which is Diamond Stripes Ltd, a reputable and huge company that has done investments worth over $20bn spanning power and renewable energy sector, port sector, and agricultural sector since 2013.
“Diamond Stripes Ltd. is the sole investor in Onitsha River Port and has invested heavily in the agricultural sector where it is the largest owner of silo complexes in Nigeria.
“It was involved in the acquisition of 600MW Shiroro Hydroelectric Power plant in 2013, concessions of 30MW Gurara Hydroelectric Power Plant in 2019, and establishment of 300MW Shiroro solar power project in 2021.
“The state’s interest in the N100BN UPPL deal is well secured, benefitting from Governor Peter Mbah’s experience as an investment finance expert and an entrepreneur, who has handled multi-billion-dollar projects himself.
“Besides asking for and getting a corporate guarantor on the part of Pragmatic Palms Ltd, the government also demanded for and got bank guarantors from Pragmatic Palms.
“Importantly, performance targets and timelines were equally set in the Agreement for Pragmatic Palms Ltd. failing which the Enugu State Government is free to revoke the deal and reassume total ownership of United Palm Products Ltd., UPPL.
“In addition, the Enugu State Government is represented on the company’s Board, including the Chairmanship of the Board, as part of the steps taken to secure the state’s interest.”