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Pragmatics Palms registered with CAC because of UPPL, our interest is protected- Enugu



Pragmatics Palms registered with CAC because of UPPL, our interest is protected- Enugu

Enugu State government has disclosed that Pragmatics Palms Limited is a Special Purpose Vehicle in the N100 billion deal signed on Friday, May 10.


The state government further said Pragmatics Palms was made to register by the state government with Corporate Affairs Commission (CAC) before entering into the revitalization deal of UPPL.


Enugu government’s explanation comes following the discovery on the website of CAC that the company, Pragmatics Palm, got incorporated on May 6. Questions arose as to why the Peter Mbah-led administration would sign a 100 billion naira deal, though Memorandum of Understanding, with a four-day-company to the day of the 100 billion naira deal on Friday, May 10.


Another question was whether the state government followed the proper bidding process in the revitalization deal of United Palms Products Limited. Since Pragmatic Palms was only four days old on CAC website to the day of the deal contract with the state government. The state government said it acted in line with Companies and Allied Matters Act (CAMA), 2020, that guaranteed pre-incorporation contract with Pragmatics Palms.

Source: Foundation for Investigative Journalism

Special Assistant on Media to Governor Mbah, Dan Nwomeh said, “Because several parties/investors are involved, it became imperative, as is the best international practice, to register a Special Purpose Vehicle (SPV) as the platform to transact the deal. Pragmatic Palms Ltd. was duly incorporated before the signing of the agreement.


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“For the avoidance of doubt, however, it is not the case in this instance, it is apposite to also note that the Companies and Allied Matters Act (CAMA), 2020, provides for Pre-incorporation Contract.”


Giving further detail, Nwomeh said, “Enugu State Government is not releasing N100bn or any dime to Pragmatic Palms Ltd. Instead, Pragmatic Palms Ltd, a Special Purpose Vehicle (SPV) for the partnership, will finance the revitalization of UPPL. Pragmatic Palm Ltd. will provide finance for 60 percent of the transaction value, while the Enugu State Government will provide the plantations valued as 40 percent equity.


“As demanded by the Enugu State Government, Pragmatic Palms Ltd. provided a guarantor, which is Diamond Stripes Ltd, a reputable and huge company that has done investments worth over $20bn spanning power and renewable energy sector, port sector, and agricultural sector since 2013.


“Diamond Stripes Ltd. is the sole investor in Onitsha River Port and has invested heavily in the agricultural sector where it is the largest owner of silo complexes in Nigeria. It was involved in the acquisition of 600MW Shiroro Hydroelectric Power plant in 2013, concessions of 30MW Gurara Hydroelectric Power Plant in 2019, and establishment of 300MW Shiroro solar power project in 2021.”


A further check on CAC website confirmed that the guarantor and parent company, Diamond Stripes Limited, was incorporated in 2007. However, the company’s status showed it has been inactive on CAC website.

Source: Foundation for Investigative Journalism


In a statement on Sunday, May 12, Dan Nwomeh further argued that the interest of the state government is protected. He said the state government is represented on the company’s board. He added that the N100 billion deal has been protected by timeline given to Pragmatic Palms to deliver or the government would revoke the deal and assume total ownership.


He said, “The state’s interest in the N100BN UPPL deal is well secured, benefitting from Governor Peter Mbah’s experience as an investment finance expert and an entrepreneur, who has handled multi-billion-dollar projects himself. Besides asking for and getting a corporate guarantor on the part of Pragmatic Palms Ltd, the government also demanded for and got bank guarantors from Pragmatic Palms. Importantly, performance targets and timelines were equally set in the Agreement for Pragmatic Palms Ltd. failing which the Enugu State Government is free to revoke the deal and reassume total ownership of United Palm Products Ltd., UPPL.


“In addition, the Enugu State Government is represented on the company’s Board, including the Chairmanship of the Board, as part of the steps taken to secure the state’s interest.”