The Immediate past Managing Director/CEO, Benue Investments Property & Company Ltd, Dr. Alex Adum has said BIPC under his management achieved significant investments that grew the assets position of the company.
In a statement he made available to our correspondent, he also said BIPC under paid N600 million tax liabilities incurred before he was appointed.
Find below the complete press statement.
By way of response, we wish to unequivocally state that these assertions are incorrect. For the avoidance of the doubt, even though the Benue State Government (BNSG) is the 100% shareholder of BIPC. The company had under our management operated in accordance with the spirit letters of the Company and Allied Matters Act as a limited liability company, with a board, management and staff and generated its resources independent of government to run its operations, pay staff emoluments, treat trade obligations and debts and declare a profit or loss as any company would do.
These allegations leveled against the management of the company are therefore most unfortunate because they are contrary to the documented facts, which we can boldly say are available at the company and even in the public domain.
- For instance, on the Lagos Liaison Office and Benue Plaza Lagos:
We wish to state that the Lagos Liaison Office is still very much intact. The material information concerning the extant state of the property which is available at the company is that:
Right from 1980 when the Liaison Office was set up in Lagos. It operated from within the Benue Plaza, which was designed and built as a guest hospitality facility to service visiting guests from Benue State and outside of the state in Lagos.
The Plaza itself was handed over to BIPC the state investment company to commercially operate and manage as a guest hospitality facility since 1982.
BIPC in the course of managing the Plaza has always had third-party management arrangements with various hospitality services firms. Some have been indigenous and some outside of the state. Some of the indigenous hospitality actors are Cherry Wood Ltd which leased the Plaza for over 10 years from about 1994 to about 2005 and another company leased it from 2005 to about 2016.
One common denominator amongst the indigenous hospitality managers was the inability to keep to the lease terms and conditions including the non-payment of rental obligation which was as low as N2 million per annum. They were also unable to execute any reinvestment in the facility leading to its comprehensive decay and dilapidation.
The situation was such that between 2016 and 2019 the BIPC had to reinvest almost N100 million to retool the property after it successfully ejected the company out of the Plaza for non-payment of rents for over 10 years. That money, however, went down the drain as the company could not match up with the about N500 million that was required to renovate the Plaza to tenantable conditions.
Meanwhile, utility bills such as water, electricity, ground rents, sanitation fees, tenement rates, etc had piled up over N400 million.
The Lagos State government ground rents demand to the BIPC also carried a notice to remedy the disrepair or risk revocation and demolition of the property.
Alarmed by the precarious situation, the BIPC management put in place in 2019 sourced for a more reputable hospitality management firm with a proven track record in the industry to remodel the plaza from a 30-guest chalet facility to 45 guest chalets, build a swimming pool and provide other ancillaries.
The terms and conditions also included furnishing the facility, renovating the BNSG Liaison Office, clearing all outstanding property charges, except the ground rents, and shouldering the responsibility of all utility charges for the Plaza and the Liaison Office for the next 15 years duration of the leasehold.
The lease fee is not N10 million for 15 years as the spokesperson was quoted to have said. The lease fee was calculated at N10 million per annum for the first 5 years, yielding a cumulative rent of N50 million paid upfront to BIPC, which payment the company acknowledged as it is receipted by BIPC.
The rental fees is to be increased by 50% at the expiration of the first 5 years to N15 million per annum affording N75 million to BIPC which shall be due in 2025 and increased to N20 million per annum in 2030 affording N100 million for the last 5 five years. All rental fees are to be paid in blocks every 5 years. This is in addition to the reversionary interest to BIPC of the over N500 million sunk-in-invest to reconstruct and remodel the Plaza.
It is therefore erroneous to posit that the Lagos Liaison Office was leased out by the Ortom administration for N10 million for 15 years. The Liaison is still very much up and running under a better and more conducive atmosphere than any of the state’s Liaison offices in Abuja and Kaduna.
This was only made possible by the enterprise and business oriented management strategies put in place by the management of the BIPC to bail out the utilisation of its Benue Plaza Lagos, which in turn positively robbed off on the Lagos Liaison Office.
Any indigene of Benue State, who had been to the Plaza prior to the extant arrangement can testify that things that had completely gone down south for the Benue Plaza and Lagos Liaison Office have since changed for the better, courtesy of the BIPC management under Ortom. And it is instructive to note that ever since the Benue Plaza Lagos was built, this is the first time that the BIPC is getting any significant monetary return on investment from the Plaza.
B .With regards to the Benue Liaison Office Abuja.
It is important to note that the Liaison Office is located differently from the Benue Plaza Abuja.The former is in Asokoro managed by the Liaison Officer, whereas the latter located at the central business district, Abuja. The Benue Plaza Abuja is a property whose construction was financed by the BIPC and is entirely managed by the Company as a commercially tenantable property since year 2000.
At inception, the property was managed by Knight, Frank and Ruteley on behalf of BIPC. From 2000 to 2008 the first tenant was the Nigerian Communications Commission (NCC), while the property management switched to Renaissance Law Consult in 2004.
In 2008 the tenancy changed to Federal Housing Authority (FHA) who by ministerial directive subleased same to the defunct Nigerian Telecommunications Limited (NITEL). The latter surrendered vacant possession in 2014 and the Plaza remained unoccupied for 5years from 2014 to 2019.
During this period of disuse, it fell into great disrepair until the new management of BIPC in 2019 sourced for another corporate tenant TAJ bank at the rental value of slightly over N100 million per annum; the receipt of 5 years full rents of over N500 million, which the BIPC acknowledges.
Note that the lease terms and conditions also include the investment of over N1 billion by the bank to remodel the plaza into a pristine modern office complex. A task which has been admirably executed to turn the Plaza into one of the most iconic business address in the central business district of the Federal Capital Territory.
These improvements by the Bank are on a continuing basis and would all revert to BIPC in whole upon the expiration of the lease.
The property is not sold to anyone. Any person, operating any business premises at the Plaza, is a tenant of the BIPC, which is the owner of the property, is the lessor and has full custody of the Certificate of Occupancy and exercises proprietary control over the property even as we speak.
These facts and information are domiciled at BIPC and available to the spokesperson for verification and confirmation.
We inherited a wrecked and collapsed BIPC and the staff are also in trouble.
Please permit us to give a brief account of the BIPC Management 2019-2023 Under Governor Samuel Ortom.
For the information of the public, the management of BIPC, which we ran for 3 years took not a single Kobo loan, aid or grant from any bank, individual or the BNSG to invest anywhere in the world or run BIPC in debt equity.
To explain to the people of Benue the trajectory of the investment decisions we took, we start by giving you a brief on the informing consciousness behind our investment decisions and spell out some of the notable things our management was able to achieve.
On the assumption of office in 2019, we inherited an equity portfolio of about N3.8 billion, which meant the bottom line of the company was negative.
To curb the downward spiral, we designed a new investment policy that classified our existing 20 equities as legacy stocks and prohibited any trade on the stocks, except the investment committee does a market analysis to determine, which stocks to HOLD OR SELL. This proposal is considered by the management and approved for presentation to the Board and the Board considers and approves and reverts to the shareholder, whose approval is also first sought and obtained through the State Executive Council before any transaction on the equities is authorised.
We did this, to prevent the ugly scenario where previous CEO’s could whimsically trade in the stock at will without taking into account the prevailing market fundamentals and the company’s bottom line, which account for the steep decline of the portfolio and assets.
As previously stated, the value of Equities as at 2019 was 3.8 and properties about 5 billion.
By implementing the new investment policy protocol, we saved the depletion of the portfolio and assets to achieve three objectives:
Portfolio growth, by way of long hold to earn bonuses; and
Enhanced dividend yield.
These 3 objectives are the principal reasons for investing in the market.
So we did not just trade in stocks, we traded on the portfolio from an informed market position and if you review the portfolio properly you will see that we acquired 87million plus units of Zenith Bank, which is the best dividend paying stock on the market with a ratio of 15% RoI. That singular prudent decision to hedge our investment in Zenith Bank and HOLD our legacy stocks maximised our interest by resulting in over a 100% capital appreciation of the portfolio from N3.8 to N7.6 Billion by June 2023, while dividend yield also rose by close to 100% from N290 million in 2019 to about N550 million by 2021 to date.
These are the fundamentals that enabled stability of the company, to give us room to rejig the real estate assets, which was still comatose as at September 2019, when we assumed office.
The specific actions taken with respect to the property portfolio was to convert every wasting asset of BIPC from a weakness to strength using Other People’s Money (OPM).
So we secured over a billion Naira investment in retooling the Benue Plaza Abuja from TAJ Bank to modernize the Plaza, which was lying fallow to one of the most ICONIC office complexes in the CBD of Abuja and earned a five year rental income of 500million as previously mentioned.
We reworked the construction of the BIPC Mabushi housing estate by partnering with Cosgrove to construct the BIPC/Cosgrove Smart Homes Estate, attracting an investment of about N5 billion without any monetary obligations on the company, but with a RoI of about N1.3 billion.
As also previously mentioned, we retooled the Lagos Plaza, which was lying waste as at 2019 by securing half billion Naira investment from Presken Hotels Ltd to expand sales rooms from 29 to 45, furnish all the rooms, build a swimming pool and incorporate a refurbished Benue Liaison Office Lagos. The facility is also serviced with a borehole and two 500KVA and 300KVA generators. The terms and conditions are to earn the company N225 million in 15 years plus the reversionary interest at the expiration of the leasehold.
We secured investment of WAP construction for the construction of 100 unit housing estate at Karu and lease of BIPC Mall at Karu with additional investments to upgrade the facility to a more contemporary and befitting Mall, with an annual rental value of 25million with a 30% increment every 5th year. A template that applies to all our OPM transactions across the board.
We are retooled the Kaduna guest house, which we delivered 20 out of the 36 rooms from our internally generated revenue and work is expected to be completed in December of 2023.
We delivered the BIPC Fountain Estate Nyorgyungu in Makurdi, a N600 million investment entirely from our funds without a loan or grant.
We also retooled the BIPC guest house North Bank with our internally generated revenue.
We conceived, designed, and performed the groundbreaking of the Makurdi Mall By BIPC to create the first premium commercial and leisure exchange centre in Makurdi to bring Makurdi closer in terms of commerce with its peers of the class of states created in 1976. This is because from our findings, of the class of 1976 only Makurdi is existing without such a facility in contemporary Nigeria.
Our management rescinded the sale of plot I, II & III Modibo Adama Road, GRA, Kaduna by my predecessor for N50 million, which is only 10% of the open market value of N500 million such a property commands in the neighborhood. The matter is pending in court at the Kaduna State High Court and the Supreme Court.
We processed all BIPC inchoate title deeds in Kaduna, Abuja, Makurdi, and Lagos. We also processed and obtained the title deeds for Benue Plaza, Kaduna, and have processed the allocation of 50 hectares of land at Abiem Layout in Makurdi.
In the area of administration, we frontally tackled the unsustainable tax liabilities of the company by discharging the over N600 million tax liabilities of the company and obtained TCCs from 2019, 2020, 2021, and 2022.
We renegotiated the loan of N280 million, which the company took from the Federal Mortgage Bank in 2004* to construct low income houses in Nyiman and North Bank that remained unserviced, thus accumulating principal and interest of over 700 million by 2019.
We secured a waiver to pay an interest of N178 million in addition to the principal sum. *As at June 5 we paid all the loan sums with a balance of 4N5 million on the interest to exit.*
We traced and recovered our assets and investments in Plateau State under the assets sharing agreement in plots 1213 Ahmadu Bello Way, Lagos, NESCO, and Hill Station Hotel.
We also traced and recovered all our unclaimed dividends with all Registrars amounting to over N100 million.
Our management paid all staff salaries, allowances, and statutory obligations from September 2019 to May 2023.
BIPC under our watch was the only establishment in Benue State today, with such an unblemished record as at 29th May 2023.
As at June 5th, 2023, we handed over BIPC with a net balance sheet of about N20 billion up by over N13 billion from the N7 billion which took over in September 2019. Available Cash in Bank Balances dedicated specifically for Salary payments was over N100 million in Sterling and TAJ Bank.
Conclusion: This is just an abridged highlight of what we were able to achieve in 3 years. They are, however by no means exhaustive.
BIPC MANAGEMENT 2019 -2023