By Jeff Adama
The decision to undertake the reform of the Nigeria Postal Service (NIPOST) was borne out of the Federal Government policy on privatization and commercialization of its enterprises, especially those identified as underperforming. The objective is to optimize their delivery of service and productivity, as the case may be. It was in line with that policy that the National Council on Privatisation (NCP), at its meeting of 31st October, 2017, approved the Reform of the Postal Sector and specifically, the Restructuring and Modernisation of NIPOST.
At that meeting, the NCP also approved the constitution of a Steering Committee to be chaired by the Minister of Communications & Digital Economy, to drive the reform process and review the Postal Sector Policy. It equally approved the constitution of a Project Delivery Team (PDT) to serve as the secretariat of the Steering Committee and to develop quick fix reform strategies to make NIPOST commercially viable; and the appointment of KPMG as Transaction Advise.
The reform essentially involves the unbundling of NIPOST into viable subsidiary companies which will operate on the principle of commercial viability, while the core postal service function will remain with NIPOST as the parent company.
Consequent to the appointment of KPMG as it the Transaction Adviser (TA) on 12th November 2018, the Secretariat held the Kick-Off Meeting on 5th December 2018 with the management of NIPOST and the Transaction Advisers in attendance. This signaled the commencement of the transaction process.
Thereafter, KPMG submitted an Inception Report on 21st December, 2018 which contained detailed synopsis on the issues affecting NIPOST. The report was reviewed and adopted. KPMG also submitted an Interim Report on 8th April, 2019, which was also considered and adopted by members of the Steering Committee chaired by the then Minister of Communications and Digital Economy.
The Consultants had recommended the following subsidiaries to be carved out of NIPOST as follows:
NIPOST Properties & Development Company Limited; NIPOST Transport & Services Limited; NIPOST E- Commerce Services Limited; NIPOST Financial & Digital Services Limited; NIPOST Microfinance Bank Limited; and NIPOST E-Government Services LimitedBased on KPMG’s recommendations, the Steering Committee at its meeting held on 7th February 2020 resolved that NIPOST would establish three non-postal subsidiaries namely: NIPOST Properties & Development Company Limited; NIPOST Transport & Logistics Company Limited; and NIPOST Microfinance bank Limited. The Steering Committee also deliberated and recommended the treasury as the source of funding for the required amount of take-off funds for the subsidiaries. A letter dated 16th April 2021 requesting for the funds was forwarded to the Minister of Finance.
The breakdown of the 21.502 billion recommended for the take-off of the subsidiaries is as follows: NIPOST 3.159 billion; NIPOST Microfinance Bank N 9.617 billion; NIPOST Transport & Logistics N 5.434 billion; NIPOST Properties & Development Company N2.792 billion; Contingency (Bureau of Public Enterprises) N500 million. However, in May 2023, after due follow ups, the Ministry of Finance released the N10 billion as take-off funds for the reforms programme.
The breakdown of the release is as follows: Nigeria Postal Service (NIPOST) N600 million; NIPOST Transport & Logistics Services Ltd N5.500 billion; NIPOST Properties & Development Company Ltd N3.5 billion; Contingency (Bureau of Public Enterprises) N400 million.
The N400 million Contingency fees released to the BPE include: Registration Fees, Consultancy Fees, Accommodation, Rent, among others expenses.It is important to note that the funds were disbursed to the various company accounts who now have a management and an existing Board of Directors and not the BPE.So far, since the resumption of the management of the companies in May 2023, they have only incurred necessary administrative/overhead costs which are duly approved by their respective boards in line with corporate governance practice. The funds are thus largely intact as the companies finalise their budget plans to commence core operations.
The Bureau completed the registration of the NIPOST Properties & Development Company Limited and NIPOST Transport & Logistics Services Limited at the Corporate Affairs Commission (CAC).As at the time of registration, the representatives of the subscribers to the Memorandum and Articles of Association (MEMART), being the Bureau of Public Enterprises, Ministry of Finance Incorporated and the Nigeria Postal Services (NIPOST) were listed as the shareholders of the Company holding the shares on behalf of the above-mentioned organisations.
The names of the representatives of the subscribers to the MERMAT were Alexander Ayoola Okoh for BPE; Alexander Musa Adeyemi for MOFI and Maimuna Yaya Abubakar for NIPOST.The names of the three people were inputted into the CAC portal because as at that time, the provision on the portal for share shareholders of companies could only accommodate individuals and personal data.CAC’s decision to provide for only natural individuals to hold shares at that time was because the Commission wanted to ensure accountability in shares ownership.Officials of the Bureau raised the matter with the CAC.
Subsequently, the Companies and Allied Matters Act (CAMA) 2020 became operational in January 2021, six months after the companies were registered.The portal was thereafter updated recently to allow the companies hold shares, but with representatives. The shareholding of the NIPOST subsidiaries have duly been corrected to reflect the intent of the subscribers. The changes that were made to the portal with the coming into effect of the Companies & Allied Matters Act (CAMA) 2020 in January 2021, followed a letter of the BPE dated November 13, 2023, requesting a correction to the names of the shareholders of the NIPOST subsidiaries (NIPOST Properties and Development Company Limited and NIPOST Transport and Logistics Services), to reflect the real ownership of the shares.
The letter referenced: BPE/LSCS/CAC/2023/11/M11.02 which was personally signed by the D-G of the Bureau, Mr. Alex Okoh, reads in part, “Kindly recall that the Bureau incorporated two subsidiaries of NIPOST namely: NIPOST Properties and Development Company Limited and NIPOST Transport and Logistics Services Limited by year 2020.“You would also recall that the requisite notice of intention to register the two companies was submitted to the Corporate Affairs Commission via a letter date February 25, 2020 and the approval for the registration was received from the CAC dated March 2, 2020.
“Kindly note that at the time of registration of the companies, the representatives of the subscribers to the Memorandum and Articles of Association, being the Bureau of Public Enterprises, Ministry of Finance Incorporated and NIPOST were listed as the shareholders of the company holding the shares on behalf of above-mentioned organisations.
“Please recall that the Pre-Incoporation Portal at the time only made provision for insertions of details of shareholders using only natural persons and on that note, we proceeded with the registration by using details of the representatives.
“Subsequent changes and updates were made to the portal when the Companies and Allied Matters Act (CAMA) 2020 came into effect in January 2021, which paved way for the registration of companies as shareholders.
“Kindly note the details of the shareholders we seek to correct as follows: Alexander Ayoola Okoh for BPE 1 million shares; Alexander Musa Adeyemi for MOFI 1 million shares; and Maimuna Yaya Abubakar for NIPOST 8 million shares.
“While the shareholding structure remains the same, we wish to change the details of the shareholders to reflect the fact being that the above agencies of the Federal Government of Nigeria hold the shares and the above stated members as representatives of the agencies, subject to any subsequent changes.
“We hereby request the commission to correct the details of the shareholders in the register of the company as stated above to avoid ambiguity.
“All necessary documents are attached for your necessary action.”
Following the approval of a 7-man Board for each of the subsidiaries, the Boards of the NIPOST Properties & Development Company, as well as, the NIPOST Transport & Logistics Services Company were inaugurated on the 21st of December 2021. Perhaps, the lacuna created by the CAC Pre-Registration Portal which provided for only natural individuals to be inputted as shareholders as at 2020 when the NIPOST subsidiaries were registered gave room for the recent allegations of illegality in the in the registration of the subsidiaries.
Media had reported a Senate resolution calling for a probe of the registration of NIPOST Subsidiaries, obviously because some interested parties gave the law makers wrong information on the process of the registration of the subsidiaries, particularly as it affects the registration of NIPOST Properties and Development Company Limited, as well as, NIPOST Transport & Logistics Service Limited.
If the Senate had invited officials of the BPE, MOFI or CAC to explain what transpired during the registration of the subsidiaries in 2020, perhaps it could have been better guided and the resolution calling for a probe of the N10 billion or asking the CAC to deregister the affected NIPOST subsidiaries would have been unnecessary because the two subsidiaries have commenced operations, with full complements of management and staff since May 2023.