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WAR IN CEMENT INDUSTRY: LEGAL BATTLE BETWEEN DANGOTE AND IBETO RAGES ON ...MESSY DETAILS

A Federal High Court, sitting in Lagos, Southwest, Nigeria, while awaiting the decision of Appeal court either to commence hearing of suit filed by Dangote Cement Plc against Ibeto Cement company or not has adjourned till 1st of November 2016.
      While Dangote Cement is alleging that, Ibeto is gaining undue advantage by evading taxes, Federal Government is contending that Dangote Cement  Plc, is trying to wipe out fair competition and level playing field and create monopoly of the cement industry. 
       Other defendants in the suit are: IBG Investments  Limited, Derima Venture Limited, Federal Republic of Nigeria, Attorney-General of the Federation, Federal Ministry of Finance, 
Other defendants also include Federal Ministry of Trade and Investment, Board of Customs and Excise, Federal Inland Revenue Services, and Nigerian Port Authority.

The court  action to either start the hearing of the suit or not will be predicated on the appeal filed by Ibeto Cement Plc against the decision of the court to commence hearing despite the objection of the defendants that Abuja is the proper place to institute the legal action  as none of the defendants, except Nigeria Ports Authority is resident in Lagos, none of the acts /omission leading to this suit was carried out in Lagos State. but the court in its ruling declared that any part of Nigeria is the constituency of Federal Government, therefore legal action can be instituted in any part of the country against the Federal Government and its agencies, Dissatisfied with the ruling of the court Ibeto Cement Plc filed an appeal against the ruling of the court. 
        Dangote Cement Plc, in the said suit filed by its lawyer, Mr. Oluwakemi Balogun (SAN), is seeking a declaration of the court that the President and Commander-in-Chief  of Armed Forces of the Federal Republic of Nigeria, lacks the power to waive, alter, amend, and/or revise the provisions of the Value Added Tax Act, Cap. V1, Laws of the Federation, 2004,  without the Legislative approval of the National Assembly.

It also seeks an order of perpetual injunction against the Ibeto Cement company, IBG investment Ltd and Derima  Ventures Ltd  and  their agents,  and whosoever, from claiming any reliefs, exemption and/or tax waiver under Circular No.BD/12237/S.510/166 of 2007, in reference to the first to three defendants

It also seeks an order of perpetual injunction against the three defendants from Importing, bringing and/or shipping into Nigeria any quality of bulk or bagged Cement except as newly approved by the appropriate authority under the current fiscal tax policy stipulation in force, and an order directing the three defendants to repay the sum of $40 million USD, and N1.885,813,582 billion to the Federal Republic of Nigeria, being the sum fraudulently obtained by Ibeto Cement Company, IBG Investment Ltd, and Derima Ventures Ltd.

An order of perpetual injunction against the three defendants, their agents, privies, servants and whosoever, from claiming any reliefs, exemption and/or tax waiver under Circular No.BD/12237/S.510/166 of 2007, in reference to the three defendants.

In an affidavit sworn to by one Ekanen Etim, principal officer of Dangote Cement Plc it was alleged that in 2002,the Federal Government formulated the backward integration policy whereby quota for importation of cement was to be allocated based on proven investment by operators in the cement industry a qualification which Dangote Cement alleged Ibeto and two other defendants in this suit never had 
      Dangote alleged further that having misrepresented its level of compliance under the policy Ibeto was granted an import allocation of 800,000 metric tons, upon petition by Dangote Cement the then President Olusegun Obasanjo issued directive that ibeto was not to be allowed to import cement until there is visible,satisfactory,and incontrovertible proof of its investment production in Nigeria 
     However with the ushering in of new administration in July 2007 Ibeto applied for import allocation, falsely claiming to have satisfied the modalities,it was granted allocation of 1.5million metric tons of cement per annum to be at 5%import duty and tax free under the backward integration, consequently Dangote Cement petitioned the then President Alhaji Musa Yar'adua, about the unfair advantage, the President then directed all Cement importers to operate under the same concessions 
      It was alleged also that barely four days after the fiscal policy was issued, ibeto pre -emptifly sought a restraining order from the court and deliberately and fraudulently suppressed the fiscal policy regime of 2008,2009,and,2010.
      Ibeto further filed terms of settlement which was entered as consent judgement in the suit,but deliberately suppressed the fiscal policy.
     my line with the consent judgment the three defendants were to continue to import N 1.5million metric tons of cement per annum for the period of 1st of October, 2007 through 30th September, 2017 in line with the Federal Government guarantee conveyed in the ministry of industry letter dated 5th June 2002.
    By the said judgement, Federal Government was to pay Ibeto the sum of 40million united States Dollars and N1,885,813,592(N1.9billion) being the verified claims by the inter-ministerial committee for losses suffered by Ibeto from the unjustified closure of its  bagging plant in December, 2005 to the resumption of operations in October, 2017.
      By implication of the consent judgment, Dangote Cement Plc averred that its right and interest were affected,consequently by this consent judgment and evasion of taxes by the three companies the locally manufactured cement of Dangote is artificially made more expensive when compared with those imported by Ibeto Cement company, IBG investment limited and Derima ventures limited by evasion of taxes
       Federal Republic of Nigeria and six of its agencies who are other defendants in their counter-affidavit deposed to by one Emmanuel Joel, an Assistant Litigation Officer in the law firm of Kenna Partners, contended that Dangote Cement Plc's suit was designed to (if granted) wipe out competition and level playing field, and to leave the it as a monopoly of cement industry. 
     Federal Government views the cement industry as very crucial to its policy of rebuilding infrastructure decay in Nigeria and is determined to create and maintained a level playing field for Nigerians and investors with no discrimination,
          Government also aveered that Dangote's claims are anti competition and designed to control the entire Cement industry and leave Nigerians at mercy of the plaintiff's price whims and caprices.
       Therefore consider Dangote's application as been mischievous and baseless and should be dismissed with substantial costs.
       Federal Government averred further that Dangote was not a party in the suit instituted by Ibeto Cement against the Federal Government, neither was the consent judgment obtained by fraud, to cap it all Dangote Cement is not a nominee or agent of Government agencies who are defendants in this suit and is not acting on their behalf in any respect ,neither is it an agency of Federal Government with the statutory responsibility to administer, manage or enforce tax matters therefore does not have the locus standi to commence or maintain this legal action and seek the reliefs being sought in this case,as his interest has not in  any way been affected rather than interest to create monopoly in the cement industry.
        Federal Government further stated that, after due consideration of the merit of Ibeto Cement's appeal and upon satisfaction that Ibeto Cement had complied with relevant requirement for the grant of import license, the then President of Federal Republic of Nigeria granted approval and confered  certain right to Ibeto Cement as  contained in the letter of Federal ministry of commerce and industry dated 25th July, 2007.
     Ibeto Cement company, IBG Investment Ltd, and Derima in their counter-affidavit deposed to by Peter Ojih, a Senior Litigation Officer in the law firm of Falcon Chambers averred that following the renewed efforts by some Directors in the cement industry who purposed to create oligopoly/monopoly and who caused the victimization of Ibeto Cement , to force an alteration of the policy of  Federal Republic of Nigeria contrary to the terms of the letter dated July 25, 2007,Ibeto Cement Company  instituted a suit marked FHC/ABJ/CS/459/2010; Ibeto Cement Company Limited vs Attorney-General of the Federation and it  did not conceal any Presidential Directives in BD.122237/S.352/11/IND/231 of 2008; BD.122237/S.352/11/IND/118 of 2009; BD.122237/S.352/11/IND/VOL.1of 2010, from Federal Government, Federal ministry of Finance  and the court as the defendants were all aware of the aforesaid directives and their contents.
     The deponent also aveered that the consent judgement was not procured by fraud therefore Dangote Cement Plc does not have any right or liability under or by virtue of the said consent judgement.
    In addition contrary to the affidavit of Dangote Cement Plc that its right and interest were affected by the purported consent judgment,the plaintiff is not affected as it is not the Government agency statutorily responsible for the management, supervision and collection of taxes and tariffs,In addition Dangote Cement Plc cause of action is rooted in taxation or company tax,therefore the suit constitute gross abuse of the process of the court. 
     Presidential and ministerial circulars aforesaid, were not made for the sole benefit of the plaintiff and the interest of the plaintiff has not been affected  and will not be prejudiced if its application is dismissed 
The plaintiff is also entitled to enjoy the tax waivers granted to the defendants by reason of the consent judgment. 
       Consequently,Ibeto Cement is urging the court to dismiss the plaintiff's suit.


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