Privatisation and Commercialisation Law

1. Citation. This Law may be cited as the Privatisation and Commercialisation Law.

2. Interpretation. In this Law, unless the context otherwise requires- "commercialisation" means the reorganisation of enterprises wholly or partly owned by the Delta State Government in which such commercial enterprises shall operate as profit- making commercial ventures and without subventions from the Delta State Government and "commercialise" shall be construed accordingly; "Committee" means the Delta State Government Committee on Privatisation and Commercialisation established by section 5 of this Law; "enterprises" means any corporation, board, company or parastatal established by or under any enactment in which the Delta State Government or any of its Departments, Ministries or Agencies has ownership or equity interest and shall include a partnership, joint venture or any other form of business arrangement or organisation; "functions" include powers and duties; "Governor" means the Governor of Delta State of Nigeria; "members" include the Chairman; "privatisation" means the relinquishment of part or all of the equity and other interests held by the Delta State Government or its agency in enterprises whether wholly or partly owned by the Delta State Government, and "privatise" shall be construed accordingly.

3. Privatisation of government enterprises. (1) All enterprises specified in the First Schedule of this Law shall be partially privatised to the extent specified in the third column therein in accordance with the provision of this Law. (2) The Governor of Delta State may by order published in the Gazette at any time alter, modify, delete from or amend any of the enterprises listed in the First Schedule so as to alter the category to which any such enterprise belongs or reduce the extent of Government participation in such enterprise.

4. Control, etc., of privatised enterprises. The control, management and composition of the boards of directors of privatized enterprises shall as from the date of privatisation reflect the ownership structure of the enterprise.

5. Establishment and composition of the Committee. (1) There is hereby established a Privatisation and Commercialisation Committee which shall consist of- (a) the Honourable Commissioner for Commerce, Industry and Tourism; - chairman (b) the Honourable Commissioner for Finance and Economic Planning; - member (c) the Attorney-General and Honourable Commissioner for Justice; - member (d) the Solicitor-General and Permanent Secretary, Ministry of Justice; - member (e) Permanent Secretary, Ministry of Finance and Economic Planning; - member (f) Permanent Secretary, Directorate of Cabinet, Political and Economic Matters. - member (2) A director in the office of the Honourable Commissioner for Commerce, Industries and Tourism shall be the Secretary of the Privatisation and Commercialisation Committee.

6. Functions of the Committee. (1) The functions of the Committee shall be- (i) to carry out in-depth studies of the enterprises listed to be privatised or commercialised; (ii) to advise on the capital restructuring needs of enterprises to be privatised in order to ensure a good reception in the Stock Exchange Market for those to be privatised as well as to facilitate good management and independent access to the capital market; (iii) to carry out all activities required for the successful public issues of shares of the enterprises to be privatised including the appointment of issuing houses, stock brokers, solicitors, trustees, accountants and other experts to the issues subject to the approval of government; (iv) to approach through the appointed issuing houses, the Securities and Exchange Commission for a fair price for each issue; (v) to advise the Delta State Government, after consultation with the Security and Exchange Commission and the Nigeria Stock Exchange on the allotment pattern for the sale of the shares of the enterprises concerned; (vi) to oversee the actual sale of shares of the enterprises concerned by the issuing houses in accordance with guidelines approved by the Delta State Government; (vii) to submit to the Delta State Government, from time to time for the purpose of approval, proposals for the sale of government shares in such designated enterprises with a view to ensuring a fair and even spread in ownership of the shares; (viii) to ensure the success of the privatisation and commercialisation exercise taking into account the need for balance and meaningful participation by the indigenes of the Delta State, other Nigerians and foreign interests in accordance with the relevant laws of Nigeria; (ix) to ensure the updating of the accounts of all commercialised enterprises with a view to ensuring financial discipline; (x) to ascertain and reconcile the cross-debts (interlocking debts) between parastatals, institutions and between them and governments - Federal, State and Local Governments; (xi) to appoint such number of standing or ad hoc committees on any matter with which the Committee is concerned and co-opt experts to facilitate the functions of the Committee. (2) The Committee shall perform such other functions as may be assigned to it from time to time by the Delta State Government. (3) Whenever the Committee is of the view that any enterprise is not suitable for disposal by public issue of shares, the Committee shall recommend to the Delta State Government the mode of disposal of such enterprises. (4) The Committee shall report to the Delta State Government through the Office of the Governor.

7. Incorporation of enterprises to be privatized. (1) The Committee shall if need be, incorporate into a limited liability company under the Companies and Allied Matters Act of 1990, any enterprises to be privatized under this Law where such enterprise is not already incorporated. (2) Without prejudice to the provision of subsection (1) of this section, the Delta State Government, acting on the advice of the Committee may direct that any enterprise affected by this Law shall not be incorporated into a public limited liability company in view of its weak financial structure but that the operations of such enterprises shall be wound-up and its assets disposed of by sale of in any other manner approved by the Delta State Government.

8. Offer for sale of privatised enterprises. (1) All shares of enterprises to be privatised under the Act shall be offered for sale in the Nigerian Capital Market. (2) All offers for sale of shares under subsection (1) of this section shall be by public issues except when the Delta State Government on the advise of the Committee decides that the shares of any affected enterprise should be sold by private placements.

9. Allotment of shares of privatised enterprises. (1) Subject to any direction of the Delta State Government the shares of the enterprises to be privatised under this Law shall be allotted in accordance with the provisions of subsection (2) of this section. (2) Not less than 10 percent and not more than 20 percent of the total shares on offer shall be allotted to associations and interest groups such as but not limited to State investment agencies, workers, trade unions, market women organisations, universities, friendly societies, local and community associations, and when there is an oversubscription of the shares on offer under this subsection, not more than 1 percent of the shares on offer shall be allotted to each local government through its investment agency. (3) The remainder of the shares not distributed in accordance with subsection (2) of this section shall be sold to the public in such manner and at such amounts as may be determined by the Allotment Committee of the Securities and Exchange Commission and approved by the Delta State Government. (4) The allotment of shares under subsection (2) of this section shall give priority to subscriptions by workers and management as well as non-management staff of the particular enterprises to be privatised. (5) Not more than 10 percent of the shares on offer shall be reserved Tor the staff of the company. (6) In the case of over-subscription, no individual shall be allowed to hold more than 1 percent equity in any one enterprise.

10. Financial provisions. (1) The Committee shall maintain a fund which shall consist of such monies as may from time to time be provided by the Delta State Government and local government councils by way of- grant and from such fund there shall be defrayed all expenses incurred by the Committee. (2) The Committee shall keep proper accounts and records of its receipts, payments, assets and liabilities, and shall prepare in respect of each financial year a statement of accounts in such form as Delta State Government may direct. (3) The Committee shall within 3 months after the end of the financial year to which the accounts relate, cause the accounts to be audited.

11. Special report. (1) The Committee shall from time to time submit to the Delta State Government details of its implementation proposals for scrutiny and approval. (2) The Committee shall submit a report on its overall activities every 3 months to the Delta State Government.

12. Annual report. (1) The Committee shall within 3 months after the expiration of the year prepare and submit to the Delta State Government a report of its activities during the preceding year. (2) The Committee shall include a copy of the audited account of the Committee to the report submitted in accordance with subsection (1) of this section.

13. Commercialisation of Government enterprises. (1) All enterprises specified in the Second Schedule to this Law shall be fully commercialised in accordance with the provisions of this Law. (2) All enterprises specified in the Third Schedule to this Law shall be partially commercialised in accordance with provisions of this Law. (3) The Governor may, by order published in the Gazette, at any time, alter, amend, add to or delete from the list of enterprises in the second and third Schedules, to this Law.

14. Powers of commercialised enterprises. Without prejudice to the provision of section 13 of this Law all enterprises commercialised under the provisions of this Law shall have power to operate as purely commercial enterprises and may subject to the general regulatory power of the Delta State Government- (a) fix rates, prices and charges for goods and services provided; (b) capitalise assets; (c) borrow money and issue debenture stocks; and (d) sue and be sued in its corporate name. Schedule 1 PRIVATISATION AND COMMERCIALISATION LAW Enterprises to be Partially Privatised S/No. Enterprises Current Equity Post-privatisation Equity Interest Interest of Delta State Governmen i. Units of Delta Hotels Board 100% Value of existing assets but not exceeding 30 percent ii. Delta Soap Factory Limited, 100% Value of existing assets but not Sapele exceeding 30 percent iii. Delta Boat Yard Limited, Warri 100% Not exceeding 30 percent iv. Delta Glass Company Limited, 100% Value of existing assets but not Ughelli exceeding 30 percent v. Oil Palm Company Limited, 100% Not exceeding 30 percent Ajagbodudu vi. Delta Steel Structures Limited, 100% Not exceeding 30 percent Effurun vii. Utagba-Uno Rubber Estate 100% Not exceeding 30 percent Limited. Schedule 2 PRIVATISATION AND COMMERCIALISATION LAW Enterprises to be Fully Commercialised

2. Delta Transport Service Limited Schedule 3 PRIVATISATION AND COMMERCIALISATION LAW Enterprises to be Partially Commercialised (i) Public Utilities Board (ii) Hospital Management Board (iii) Delta Development and Property Authority (iv) Delta Broadcasting Service