As Nigerians grapple with high petrol prices and widespread scarcity, a controversial change in ownership has taken place at the company currently responsible for importing petrol into Nigeria.
The downstream division of the Nigerian National Petroleum Corporation (NNPC Retail) has formally ceased to exist as it asked the court to transfer its ownership and assets to the company it claims to have acquired.
Journalists reported on the controversial acquisition of OVH Energy Marketing Limited by NNPCL and how the acquired company essentially took over the management of the buyer in what an NNPC insider described as the “most ridiculous business acquisition in the world.”
NNPCL bought OVH from Nueoil Energy Ltd a month after Nueoil Energy acquired OVH in the month of September 2022.
However, two months ago, the three companies NNPC Retail, OVH, and Nueoil jointly filed a petition in a Federal Court in Lagos. In it, they asked the court to issue eight orders, including an order to “be dissolved without being wound up” and that “the resultant company from the scheme shall be”
The court granted all eight orders. The court decision was subsequently published in the Nigerian Government Official Gazette.
Justice C.J. Aneke announced the ruling on a petition filed on June 24 by NNPC Retail Limited, Nueoil Energy Limited, and OVH Energy Marketing Limited.
The Complaint Affidavit No: FHC/L/CS/921/2024 was filed by Valentina Ine Kodjo-Soroh.
According to a certified copy (CTC) of the court order published in the Journalists on July 18, the applicants asked the court to approve the merger in accordance with the shareholders’ agreement at a court-ordered meeting.
The petitioners also requested the inclusion of all tax properties, unused capital reserves, tax losses, withholding tax credits and other available refunds (except Nueoil Energy’s shares in OVH Energy Marketing Limited), liabilities and business obligations, including real property and intellectual property rights of NNPC. Retail and Nueoil Energy Limited will be transferred to OVH Energy Marketing Limited, subject to the conditions set out in the plan, without any further deed or action being taken.
The petitioners also sought the cancellation of the entire share capital of NNPC Retail and Nueoil Energy Limited and the continuation of all suits, actions, and proceedings pending or proposed by or against NNPC Retail and Nueoil Energy Limited, or by or against OVH Energy Marketing Limited, until the scheme came into effect.
They also sought an order to wind up NNPC Retail and Nueoil Energy Limited without liquidation. They also applied for an order that the company resulting from the scheme be OVH Energy Marketing Limited.
They told the court that the merger should take effect from 1 January 2024.
They also asked the court to make any necessary ancillary, consequential, and further orders to ensure that the merger is fully and effectively implemented.
Judge Anneke granted all the petitioners’ requests and ordered the merger to take effect from January 1. The court also ordered that all necessary incidental, consequential, and further orders be made to ensure the full and effective implementation of the merger.
The court also issued the following orders giving effect to the merger:
“That an order is hereby made that all assets (including all tax attributes, unutilized 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 canceled. 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.
This ruling means that NNPC Retail, currently responsible for virtually all of Nigeria’s petrol imports, no longer exists and is now wholly owned by OVH Energy Marketing Limited.
NNPC Ltd announced the acquisition of OVH Energy Marketing Limited’s downstream assets in October 2022. The acquisition will see OVH Energy merge with NNPC Retail, a subsidiary of NNPC Ltd.
The assets acquired by the company, which operates Oando gas stations, also include a jetty with a monthly capacity of 240,000 tonnes, as well as eight liquefied petroleum gas plants, three lubricant blending plants, three aviation warehouses, and 12 warehouses.
However, in June 2023, a Premium Times investigation into the acquisition revealed collusion and a complex ownership structure that put the management of NNPC Retail in the hands of OVH Energy Marketing.
The report also revealed that OVH Energy Marketing may not own as many gas stations as it claimed during the merger negotiations.
Furthermore, the report highlighted that former OVH Energy CEO and expatriate Huub Stokman has been appointed as the new Managing Director of NNPC Retail, further complicating the structure of NNPC Retail.
The paper also revealed that the acquisition of OVH Energy has turned NNPC Retail into a toxic workplace, with the former’s representative taking over the management of the latter.
“Did we acquire them, or did they acquire us? How come they are now the ones in the management,” an NNPC Retail source told the paper. In July 2023, the House of Representatives, after passing a motion by Miriam Onuoha (APC, Imo), directed NNPC Ltd to suspend the acquisition pending investigation by the committee.
Parliament then set up a special committee chaired by Hassan Nalabraba (APC, Nasarawa) which began investigating the controversial deal in September 2023.
The special committee asked NNPC Ltd to provide information on 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 related to the acquisition, including payment records and fund transfers.
In September 2023, Mr. Mele Kyari, Group Chief Executive Officer of NNPC Ltd, told the committee investigating the acquisition that NNPC Ltd is currently operating as a private limited company and has entered into a business relationship with OVH to gain market share in the downstream oil market.
He said NNPC Ltd had done nothing wrong in the acquisition. Meanwhile, in a letter dated September 25, 2023, addressed to the Chairman of the House of Representatives Committee, some “concerned staff’ of NNPC Retail noted that the Committee’s requests had not been complied with.
In October 2023, Nalabraba tabled the investigation report.
In February, the House of Representatives dissolved the committee investigating the controversial acquisition after the committee tabled a report that many lawmakers described as “suspicious and shabby”. The task was subsequently transferred to the House of Representatives Committee on Petroleum Resources (Downstream) for a fresh investigation.
In January, NNPC Ltd announced that the OVH acquisition had not been completed. It said it would apply for an operating license for the facility under OVH Energy Marketing Limited. Olufemi Soneye, Chief Corporate Communications Officer, NNPC Ltd, confirmed the court order to Journalists.
He said NNPC Retail’s mission and employees’ working conditions 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,” Soneye wrote in an SMS reply to our queries.
NNPC Retail employees told Journalists they were aware of the court order and gazette but had not yet been formally informed. “I am aware of the gazette, it’s criminal,” an employee told the paper. “They did not formally inform us about it. It is part of their plan 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 victimization.
He expressed optimism that the entire takeover would be challenged in court in the future. Another employee asked how NNPC Retail, which was profitable before the acquisition, could be subordinated to OVH, which has acquired NNPC Retail.
“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.”
