DAWODU.COM
Dedicated to Nigeria's socio-political issues
2009 US DIVERSITY VISA LOTTERY INFORMATION
October 3, 2007 - December 2, 2007
LUNARPAGES.COM and IPOWERWEB.COM - Despicable WebHosts - Read My Story
|
DAWODU.COMDedicated to Nigeria's socio-political issues
2009 US DIVERSITY VISA LOTTERY INFORMATION
October 3, 2007 - December 2, 2007
LUNARPAGES.COM and IPOWERWEB.COM - Despicable WebHosts - Read My Story
|
|
The Ethical Burden of Obasanjo's "Blind Trust" And Transcorp- "Please Speak to the Nation, Ejoo Sir!" -
by
Mobolaji E. Aluko, PhD Burtonsville, MD, USA
August 19, 2006
QUOTE from Wikipedia http://en.wikipedia .org/wiki/ Blind_trust A blind trust is a trust in which the executors or those who have been given power of attorney have full discretion over the assets, and the trust beneficiaries have no knowledge of the holdings of the trust. Blind trusts are generally used when a trustor wishes to keep the beneficiary unaware of the specific assets in the trust, such as to avoid conflict of interest between the beneficiary and the investments. Politicians often place their assets in blind trusts so they cannot be accused of conflict of interest when they direct government funds to the private sector.
UNQUOTE The ethical blindness - or sight-challengedness - with which our Nigerian leadership often approaches various issues can be amazing. One reads of heads of regulating agencies accepting car gifts from those they regulate and harrumphing that such gestures will not affect their objectivity; ministries donating public money for birthdays and book launches of their ministers and other high officials; adult brothers and mothers' and concubines' health, hotel and/or other accommodation bills paid for from the public purse, etc. More befuddling is that when confronted with the clear moral burden at hand, there is amazement exhibited by some protagonists that the issue is raised at all, and you find certain actors, both paid and unpaid, coming out of the woodworks asserting that nothing is wrong, and that the accusations are being made out of envy and/or political pettiness. With regard to the matter at hand, the president's personal involvement in the running of his Ota Farm [ http://www.obasanjofarms.com/ ], and in Obasanjo Holdings [ http://obasanjoholdings.com/ ] well into his presidency is a well-known fact. For example, back in December 2004, and again in September 2005, Governor Orji Uzo Kalu of Abia State, in one of his many verbal and written combats with the president over his impounded Slok Airlines and other matters, indicated that he once sat with the president while he (president Obasanjo) was signing Obasanjo Farm checks of First Bank, Plc, among several accusations. [See http://odili. net/news/ source/2004/ dec/2/303. html ; and http://www.nigerian muse.com/ nigeriawatch/ officialfraud/ Orji_Uzo_ Kalu_accuses_ Obasanjo_ before_EFCC. htm ] That statement has not been controverted. More importantly, the nation was once told earlier in November 2004 by then presidential aide Remi Fani-Kayode (now Minister of Culture and Tourism) that since Obasanjo's farm and other business concerns earn approximately N30 million per month, the president was not inclined to steal government money, meaning that the president was benefitting well, thank you, from such proceeds [ http://www.nigerian muse.com/ important_ documents/ Obasanjo_ farm_wealth. htm ]. And now August 2006, and disclosure of a Blind Trust investment in Transnational Corporation of Nigeria (Transcorp http://www.transcorpnigeria.com/ ) , Nigeria 's answer to South Korean "Chaebols", which was incorporated on November 17, 2004. When did the Obasanjo Holdings become "blind", if that was the vehicle? Can a "blind trust" have a "sighted" name? Who are its executors? Was it registered with Corporate Affairs Commission so as to be able to trade? And now that the blinded trust is with sight, has the basic legal requirement of its blindness not been violated, in which case it should disgorge itself immediately of the 1, 20, 100 or even 200-600 million share in Transcorp (out of how many? A total of 1 billion as alleged?) , or more accurately (since no Initial Public Offering IPO has really been made yet) in any Private Placement offering taken up in Transcorp? These are germane questions which many Nigerians, including yours truly, are raising. These are questions that demand answers - and quickly too. The ethical dilemma which the President has entangled himself with - the multi-billion- naira donations by Corporate Nigeria both to his 2003 Campaign and to the Presidential Library Fund; the establishment of a private University at Bells Technological University in the midst of the declining fortunes of our public universities; and now the allegations of "blind trust" holdings in a highly-favored Transcorp - constitute a really troubling pattern. One gets the feeling that he is not properly advised by lawyers around him, and/or by his public relations handlers that a person in such a high position can be easily accused - and rightly so - of unrighteous influence peddling. There is a certain base level in which these activities can be described as strictly "legal", but at another level of public decency and perception, they leave a uncomfortable stink when every spirit of the law has been violated. The president can do better. He should indeed speak to the nation on Transcorp and his involvement - and quickly too - and make amends if necessary. NigerianMuse. com Bolaji Aluko August 19, 2006 _____________________________________________________________________________________
Information on Transnational Corporation of Nigeria (Transcorp)
http://www.transcorpnigeria.com/
"Transnational Corporation of Nigeria Plc ("Transcorp") was incorporated on the 17th of November 2004 in response to the need to establish a "Mega Corporation", "created" in Nigeria and owned by all Nigerians, which will respond to market opportunities that require heavy capital investment not just at home but in the sub African region and around the world. TransCorp will be the vehicle to reposition Nigeria in Africa and the world, as a nation ready to compete in global markets. TransCorp is made up of Nigeria's most influential business people and most successful businesses. Household names and the Nation's premier brands are all part of TransCorp......."
"Late in 2005, we embarked on our first funding round which included seed capital from Directors and a Private Placement. Altogether, we set out to raise six billion naira (N6 billion). The Private Placement closed formally on March 31, 2006. Although collating is still going on, we are pleased to announce that we have raised over seventeen billion naira (N17,000,000, 000.00). In addition to the amount of funds raised, the capital raising exercise marked a first in another way. It is the single largest fund raising for investments in the real sector of the Nigerian economy. ......."
"The Directors who are also the founding fathers of Transcorp include patriotic Nigerians with a burning desire to create a truly Global Nigerian Corporation that will provide the platform for Nigeria to compete favourably in the global economy. They include the following distinguished persons:
Olusegun Obasanjo Presidential Library (OOPL) project
See: http://www.nigerianmuse.com/nigeriawatch/?u=Info_on_Obasanjo_library.htm
"The trustees
include Ambassador Christopher Kolade,
Nigeria's high commissioner to the United
Kingdom, as chairman, Mr. Carl Masters, an
American as co-chairman, Ogun State Governor
Gbenga Daniel, Hon. Vernon Jordan, an
American, Mr. Richard Branson, owner of
Virgin Atlantic Airline, Dr. Onaolapo
Soleye, Minister of Finance under the Buhari
administration and Mr. Jim Ovia, MD/CEO
Zenith International Bank. Others include
Dr. Iyabo Obasanjo-Bello, the president's
eldest daughter and Ogun State commissioner
for health and Mr. Nyaknno Osso, the
president's librarian who serves as
secretary…………" ________________________________________________________________________________________________________________ DAILY TRUST EDITORIAL: August 18, 2006 Obasanjo, speak on Transcorp
Recently, newspaper reports alleged that President Olusegun Obasanjo holds 200 million paid-up shares in Transnational Corporation Plc (Transcorp). Transcorp, a mega-company that President Olusegun Obasanjo has actively promoted as Nigeria's answer to South Korea 's Chaebols, has somehow emerged as the preferred bidders in the controversial sales of strategic national assets such as the Hilton Hotel, Abuja and the National Telecommunications Plc (NITEL). As we write this, the Presidency has not made a formal response to the allegation. Nor has it responded to another newspaper story alleging that the President's holding in Transcorp is 600 million shares, and not 200 million as earlier stated. The President's shares in Transcorp are said to be held in a blind trust "in line with international best practices," and are being run by some prominent Nigerians and a foreign national. The same story has it "that Obasanjo Holdings Blind Trust subscribed to 200 million shares in Transcorp when it was incorporated in November" and that the "shares were fully paid" for.
The President ought to know that even before the newspaper publications made the issue of the ownership of Transcorp a matter for national discourse, most Nigerians, in the safety of their homes and places of work, have marveled at Transcorp's extra-ordinarily good fortune. Nigerians have asked whether it is proper that Dr. Ndidi Okereke-Onyiuke, who is the Director-General of the Nigerian Stock Exchange, umpire and regulator of publicly quoted companies, should also be Transcorp chairman. Not a few eye-brows were raised at the absence of transparency in the sale of NICON-HILTON Hotel, a cultural heritage that sits on one of the world's choicest estate, to Transcorp, a company which, because it has zero experience in the hospitality industry, should not in the first place have bidded for it. And now NITEL, where the BPE, in a desperate bid to hand over the telecommunication giant to Transcorp, over-reached its own record of dubiety and disingeniousness. Initially, BPE said 51% of NITEL was for sale. After the investors' bids were rejected, BPE decided to have a negotiated sale, only to come out with an announcement that Transcorp has emerged winner of the 71% of NITEL, a substantial remove from the 51% that has been on offer.
The events of the past two weeks justifies the position that Nigerians deserve meaningful clarification on Transcorp and its ownership structure from relevant agencies and persons like the Corporate Affairs Commission, the BPE, the National Council on Privatisation, General Olusegun Obasanjo and the relevant committees of both Houses of the National Assembly. It is noteworthy and commendable that Alhaji Atiku Abubakar, the Vice-President around whose neck the yet-to-be proved allegations of corruption were strung by this administration, had the presence of mind to reject the Transcorp shares when 100 million of them were offered to him. If Transcorp is really in the habit of offering shares to highly placed Nigerians in public service, notwithstanding the clear strictures of the fifth schedule of the 1999 Constitution, could it have made such offers to number two without doing same to number one" Was an offer made to the President, was it accepted or was it refused? In relation to Transcorp, was it the case that at a point, the President was a judge in his own case? If the President really owns shares in Transcorp, how much of a conflict of interest does that pose? And how does this untidy bit fit into the other stories concerning the donations for a Presidential Library? So the President needs to speak, directly to Nigerians, on the Transcorp matter. It is clear that the direct route of talking through a sympathetic newspaper publication that attempts to make the transactions look good has failed. For one, the laws of Nigeria and the 1999 Constitution do not know what a "blind trust" is. If blind trust is unknown to our laws, then there can't be "an applicable international best practice of a concept," Obasanjo Holdings Blind Trust "which is unknown to the laws of the Federal Republic of Nigeria. And if a TRUST was really created, for whose benefit was it created, and if a trust was registered, where was it registered?
INDEPENDENT
Obasanjo Holdings and Transcorp Plc: 16th August
The tepid denial of the Senior Special Assistant to the President on Media Matters, Mrs Remi Oyo, notwithstanding, there is the need for a comprehensive statement directly from the President of the Federal Republic on the nature of his involvement or lack of it with the Transnational Corporation of Nigeria Plc (Transcorp). In a recent newspaper report, it was alleged that Obasanjo Holdings, a firm purportedly managing many hitherto unknown companies owned by President Oluseggun Obasanjo, subscribed to 200 million shares when Transcorp was incorporated in November 2004. According to the report, full payment was duly made in respect of the said shares. If the allegation is true, then there is a clear conflict of interest.
A 'blind trust,' in its conventional application, is a special purpose vehicle, which is brought into play when an individual with private stock holdings goes into public office, elective or appointive. By as it were erecting a wall between the owner of the shares and its operations and immediate direct benefit, a 'blind trust' seeks to limit, if not entirely eliminate, potential conflict of interest. However, a grey area exists on the moral front about this particular transaction. Can a 'blind trust' be justified when a person has already assumed office? For the presumption in a democracy is that all personal additional business interaction ceases the moment the person assumes high office. Given the nomenclature as well as the raison d'etre for its foundation, a 'blind trust' involving Transcorp Plc is fraught with grave danger.
The company was set up specifically as a "national champion" with the clearly stated intention of capturing the commanding heights of the economy. In this guise, there is clearly no way in which anyone in a position of authority will not be in an invidious position in his dealings with Transcorp, if he also has indirect holdings in the company. There have always been problems of conflict of interest in the promotion of "national champions" and this newspaper has consistently pointed out the landmines. This becomes even more poignant in a case where openness is not enshrined through a "Freedom of Information" process. In the case of Transcorp there have been grave allegations of favouritism, granting of special favours and privileges as well as rigging of privatisation deals. All these issues came to the fore during the recent sale of the country's first telecommunication national carrier – NITEL.
The absence of anti-monopoly, pro-competition and fair trading frameworks within the country clearly breeds a situation of distrust. Such frameworks ought to have preceded the privatisation programme. In the absence of these, there will always be allegations of unfairness. The issue here brings up a wonderful opportunity to set the parameters in which a democratic structure and culture can evolve. Office, as Lord Acton has famously observed, "does not sanctify the man." In a democracy office-holders are in a position of trust and there must be clear rules and regulations to minimise conflicts of interest and distortions. These rules must apply across the board at every level of public office holding.
We should initiate a Parliamentary Standards Commission headed preferably by a respected retired judicial officer to oversee the entire gamut of behaviour and decide on issues of propriety. There must be a register in which public office-holders have to declare direct and indirect interests in private and public companies including those of their immediate family members. The register must be made public, sworn to on oath and regularly updated. We must have a clear National Democratic Agreement on the issue of acceptable gifts and gratification for public office-holders.
Finally, since apart from NITEL, Transcorp Plc is known to have made bids for other public companies as well as oil blocks, it is absolutely vital, in the interest of fair play, open competition and probity, that the matter is speedily clarified and the shareholding structure of the company opened up for public scrutiny.
_________________________________________________________________________________________________ This Day 08.15.2006 Just How Blind is Transcorp's Blind Trust? Last week, THISDAY exclusively reported the President's ownership of 200,000,000 shares in Transcorp, the conglomerate which has of recent, been buying up national assets. A Blind Trust pertaining to those shares was said to have been put in place. HENDERSON JOHNSON-AGBA explains just what a blind trust is and raises legal and ethical issues about the presidential blind trust in Transcorp.............................
I read with interest and concern Samuel Famakinwa's article in THISDAY of August 9 2005 titled, "Transcorp: Obasanjo's Shares in Blind Trust." The gist of it was that "The 200 million shares owned by President Olusegun Obasanjo in Transnational Corporation Plc (Transcorp) are being held in a blind trust on behalf of the President by Obasanjo Holdings, THISDAY authoritatively reports. According to information, the President's shares which are being held in a blind trust, in line with international best practice and it is being run by some prominent Nigerians and a foreign national. THISDAY also gathered that the President, through Obasanjo Holdings Blind Trust subscribed to 200 million shares in Transcorp when it was incorporated November 2004. The shares were fully paid." Any inquisitive mind (of which I am one) would like to know if the shares where actually purchased in the name of Obasanjo Holdings Blind Trust and so registered at the Corporate Affairs Commission. However beyond the inquisitiveness are several interesting legal issues that this concept throws up. Chief amongst them are: What exactly is a blind trust? Does Nigerian Law recognize the concept of a blind trust? The American Heritage Dictionary defines a blind trust as "A financial arrangement in which a person, such as a high-ranking elected official, avoids possible conflict of interest by relegating his or her financial affairs to a fiduciary who has sole discretion as to their management. The person choosing the trust also gives up the right to information regarding the status of the assets." Three major components of this definition are: (a) It is intended to avoid conflict of interest (b) The trustee assume full powers - 'sole discretion' - for managing the assets (c) the public officer loses the right to information on the assets during the tenure of the trust. Do we have any law that provides for a blind trust in Nigeria ? Who regulates it? We would come back to this later after we have seen how a blind trust actually operates in the United States . The story of U.S Senator Bill Frist is a good example. Senator Frist inherited a company HCA Inc from his late father and was a major shareholder before he became a Senator. In keeping with existing U.S regulations by virtue of the Ethics in Government Act 1978 (as amended) the Senator created a blind trust and duly informed the Senate Ethics Committee and filed all the necessary forms included a trust deed drafted in accordance with the laid down regulations. Under the statute Senator's Frists' trust agreement is not recognized as creating a blind trust for whatever purpose unless it has been approved by the Senate Committee on Ethics prior to execution. The standard Trust agreement contains clauses to the effect that the tenure of the trust shall be for the period that the Senator (or other public officer) continues in public office. It also lays down rules on interested parties which are defined as "the Grantor, spouses, any minor or dependent child, and their representatives". Additionally, the Senator had to furnish information to relevant agencies on the proposed Trustee and Investment Adviser for their consideration by the Senate Committee to ensure that these persons are truly independent. By the Statute the Trustee has a long list of obligations which include reporting to the Senate Committee on Ethics, Office of Public Records and the Secretary of the Senate whenever "a particular asset transferred to the trust by an interested party have been completely disposed of or when the value of the asset becomes less than $1000" and on and on goes the laid down procedures. The Senator supposedly complied with all these provisions as laid down by statute. So what do the accusers of the distinguished Senator have to say? Here is what happened. Senator Frist was asked during an interview whether he would not have a conflict of interest in voting for or against health care legislation despite his ownership of stock in HCA, a hospital chain which his family founded and asked whether he would sell his shares, to which he responded: "I really think viewers should know that I put this into a blind trust. So far as I know, I own no HCA stock. I have no control. It is illegal right now for me to know what the composition of those trusts assets. So I have no idea? It was later found out that Senator Frist actually received regular updates of transfer of assets to his blind trusts and sales of stocks. He also was able to initiate a stock sale of HCA with perfect timing because shortly after he sold the stock price dived. Apart from the issue of having knowledge of the affairs of the blind trust, the US Attorney-General's office and the Securities and Exchange Commission began to investigate whether the Senator sold his stock based on insider information about earnings report. The level of 'blindness' expected of a grantor of a blind trust in public office in the US is total impaired vision NOT partial impaired vision. He is expected to take his hands and eyes off the asset entirely, leaving it to the Trustee for the tenure of the Trust. Indeed an onerous task, I think so too! But that is the character of a blind trust. Now that we have a good idea of the essence and workings of a blind trust we can go back to the earlier question on whether any law or regulation exists on blind trusts in Nigeria. I would rephrase that question to read: Would any Nigerian Senator have run foul of any Nigerian Law pertaining to public office if he acted as Senator Frist did? NOT likely. Our situation and jurisprudence is totally different! The major portion of our laws that deal with conduct of public officers is as contained in Schedule 5 of the Nigerian Constitution. Permit me to quote some relevant sections which provides inter alia: Section 1 - "A public officer shall not put himself in a position where his personal interest conflicts with his duties and responsibilities? Section 6 (1) A public officer shall not ask for or accept property or benefits of any kind for himself or any other person on account of anything done or omitted to be done by him in the discharge of his duties. Section 7 (b) The President or Vice-President, Governor or Deputy Governor, Minister of the Government of the Federation or Commissioner of the Government of a State, or any other public officer who holds the office of a Permanent Secretary or head of any public corporation, university, or other parastatal organisation shall not accept any benefit of whatever nature from any company, contractor, or businessman, or the nominee or agent of such person. Section 8 - No persons shall offer a public officer any property, gift or benefit of any kind as an inducement or bribe for the granting of any favour or the discharge in his favour of the public officer's duties. Section 9 - A public officer shall not do or direct to be done, in abuse of his office, any arbitrary act prejudicial to the rights of any other person knowing that such act is unlawful or contrary to any government policy. Section 11 (1) Subject to the provisions of this Constitution, every public officer shall within three months after the coming into force of this Code of Conduct or immediately after taking office and thereafter (a) at the end of every four years; and (b) at the end of his term of office, submit to the Code of Conduct Bureau a written declaration of all his properties, assets, and liabilities and those of his unmarried children under the age of eighteen years. Section 11 (2) Any statement in such declaration that is found to be false by any authority or person authorised in that behalf to verify it shall be deemed to be a breach of this Code. Section 11 (3) Any property or assets acquired by a public officer after any declaration required under this Constitution and which is not fairly attributable to income, gift, or loan approved by this Code shall be deemed to have been acquired in breach of this Code unless the contrary is proved. Section 13. A public officer who does any act prohibited by this Code through a nominee, trustee, or other agent shall be deemed ipso facto to have committed a breach of this Code. This is the gist of Nigeria's code of conduct for public officers. I have searched our statute books and regulations I fail to see any 'Blind Trusts Miscellaneous Regulations Law' or any piece of legislation that regulates the operation of blind trusts for public officers. Someone suggested a resort to Common law and the answer to that is what happens where Common Law conflicts with the clear prohibition on conflict of interest in Section 1 of Schedule 5 of the Nigerian Constitution? I submit that our jurisprudence is blind to the concept of a blind trust and where same exists the regulations governing its workings are not in place. One is not in a position to adjudge the truth in the reports of Mr. Famakinwa of THISDAY. However since it has become an issue then it is a worthwhile intellectual discourse to raise questions that may arise in judging the propriety or impropriety of blinds trusts in relation to this transaction and generally. The questions that agitate my mind in this regard are: ONE: Can a public officer create a blind trust for shares held in a company which was created and nurtured by him during his tenure in office? To put this in perspective Senator Frist had the controversial stock in HCA before he became a Senator. He did not acquire them in the course of his duty as a Senator. He did not set up the company during his tenure as a Senator or use his official powers and statutory powers as Senator to set up a company to which he became a shareholder. TWO: Can the act of a public officer become legal (or ethical) by importing the 'blind trust' concept which is alien (and therefore not subject to regulation) to Nigerian law? Would Senator Frist for example borrow our Code of Conduct in Schedule 5 of the Nigerian Constitution to defend himself of any impropriety in the United States? Mr. Famakinwa's article says that the blind trust is set up according to 'best International practice' to which I ask: Can we apply any 'best' international practice (no matter how well versed) to a transaction that is not in tune with domestic laws? THREE: Where the act in question clearly runs against the omnibus Conflict of Interest provisions in Section 1 of the Code of Conduct (above quoted) would the niceties of a blind trust erase or negate the duties of an elected officer as a public trustee? One major pillar of our inherited Anglo-Saxon jurisprudence is the underlining concept of 'equity and good conscience'. As we continue in this discourse we should ask ourselves whether in all good conscience a grantor of such a blind trust - a shareholder in a company - can remain a major player (or the major player) in determining the fortunes of the company and through the instrumentality of his public office. Just how blind can this blind trust be? • Johnson-Agba wrote in from Enugu State |
|
© 1999 - 2006 Segun Toyin Dawodu. All rights reserved. All unauthorized copying or adaptation of any content of this site will be liable to legal recourse. Contact: webmaster@dawodu.com Segun Toyin Dawodu, P. O. BOX 710080, HERNDON, VA 20171-0080, USA. This page was last updated on 10/27/07. |
