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Enugu Govt Defends Smart City Project, Says Top Officials Named In SaharaReporters' Investigation Were Nominal Shareholders
Enugu Govt Defends Smart City Project, Says Top Officials Named In SaharaReporters' Investigation Were Nominal Shareholders
CORRUPTION
The Nigerian Record
7/22/20264 min read
The Enugu State Government has defended its handling of the controversial New Enugu Smart City project, rejecting allegations contained in a SaharaReporters investigation that linked senior government officials to the acquisition and sale of disputed lands through a private company.
The government, however, maintained that the officials merely serve as nominal shareholders and directors in state-owned Special Purpose Vehicles (SPVs), while legal provisions and judicial authorities continue to raise questions over the circumstances under which government-acquired land may be transferred for commercial development.
In a rebuttal issued on Wednesday, the Commissioner for Information and Communication, Dr. Malachy Agbo, described SaharaReporters' July 14 investigation as "malicious" and accused the newspaper of ignoring facts showing that Coal City Eastern Extension Estate Alliance Ltd and the New Enugu Smart City project were government-backed vehicles established to protect state interests.
The government's response followed SaharaReporters' publication of Corporate Affairs Commission (CAC) records, official government correspondence, allocation letters, payment advisories and public notices suggesting that top officials of Governor Peter Mbah's administration occupied key positions in Coal City Eastern Extension Estate Alliance Ltd, a company involved in marketing and allocating plots within the New Enugu Smart City.
According to the government, officials including the Secretary to the State Government, Prof. Chidiebere Onyia; former Commissioner for Housing, Dr. Martins Chukwunweike; former General Manager of the Enugu State Housing Development Corporation (ESHDC), Gerald Asogwa; and former Legal Adviser to the Governor, Osinachi Nnajieze, merely occupy nominal positions as trustees representing the state's interests.
"The current Board members of these sate-owned SPVs are nominal shareholders and directors, who are on the Board for the sole purpose of representing state interests in the SPV," the statement said.
It further insisted that none of the officials benefited financially from the company.
"Not even a sitting allowance was paid to any of the board members during their time on the board of these SPVs," the government added.
The state further argued that successive administrations had appointed public officials to similar companies over the years and that such appointments did not confer beneficial ownership.
It also disclosed that all assets and liabilities of Coal City Eastern Alliance Estate Ltd had since been transferred to the Enugu State Housing Development Corporation, which it said had managed the project since 2024.
The government equally claimed that the New Enugu City Management Agency was a government agency and not a private business enterprise.
"The presence of government officials on its Board is merely an administrative position... Their roles are merely governmental oversight in the administration of a government agency," it stated.
However, SaharaReporters' investigation relied on CAC documents identifying Prof. Onyia as holding 300,000 shares, representing 30 per cent control, while Chukwunweike, Asogwa and senior lawyer James Onyeanwuna Ikeyi, SAN, each held 225,000 shares, representing 22.5 per cent control.
Although the government now argues that those shareholdings are merely nominal and held in trust, legal experts note that under the Companies and Allied Matters Act (CAMA) 2020, every incorporated company has a legal personality separate from its shareholders and directors.
For instance, a lawyer, Ede Gerald Moses Esq, while commenting on the issue, stated that the designation of an individual as a Person with Significant Control (PSC) is a statutory disclosure recognised under Nigerian company law and ordinarily signifies a legally recognised level of influence or control over a company unless evidence establishes that such interest is held purely in trust.
Beyond the issue of corporate structure, the more fundamental legal question concerns the acquisition and subsequent use of the disputed land.
According to him, under Section 28 of the Land Use Act, a governor may revoke an existing right of occupancy only for "overriding public interest."
"Section 51 of the same Act defines public purpose to include public infrastructure such as roads, hospitals, schools, public buildings and other projects serving the public interest," Moses said.
"Similarly, Section 44(1) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) prohibits compulsory acquisition of private property except where the acquisition is authorised by law, undertaken for a genuine public purpose and accompanied by prompt payment of compensation."
He explained that the Nigerian Supreme Court has repeatedly held that compulsory acquisition cannot lawfully be exercised merely to transfer land from one private citizen to another for commercial gain.
The lawyer said, "In Ereku v. Governor of Mid-Western State (1974) 10 SC 59, the apex court made clear that government cannot invoke compulsory acquisition powers where the real objective is to benefit another private interest rather than the public. The court stressed that statutory powers of compulsory acquisition must be exercised strictly for the public purposes authorised by law and not as a vehicle for private commercial transactions.
"Similarly, in Osho v. Foreign Finance Corporation (1991) 4 NWLR (Pt. 184) 157, the Supreme Court reaffirmed that although governors exercise extensive powers under the Land Use Act, those powers are not absolute and remain subject to constitutional safeguards against arbitrary deprivation of property."
Another legal expert, Ogbonna Raphael Esq., also noted that although governments may enter into Public-Private Partnership (PPP) arrangements with private entities, such partnerships must clearly serve a legitimate public purpose.
"A private limited liability company, even if wholly owned by government, possesses no statutory power to compulsorily acquire land. Its authority remains that of an ordinary corporate entity unless the acquisition itself strictly complies with the Land Use Act and constitutional requirements," he said.
SaharaReporters' investigation questioned whether those legal conditions were met in the New Enugu Smart City project, citing concerns raised by landowners, investors and surveyors over the non-publication of the report of the 2020 Ugwuaji Administrative Panel of Inquiry, alleged inadequate compensation, and the subsequent emergence of officials associated with the inquiry as directors of the company marketing portions of the disputed land.
"The matter is before Code of Conduct Bureau (CCB)," one of the victims of the alleged land grabbing told SaharaReporters.
"The dishonoring of the invitation of the agency since 2023 by the directors of the company lays credence to suspicions. It is high time the Coal City Eastern Extension Estate Alliance Ltd and its past and presented directors' report to the CCB to lay to rest all allegations against them. Nothing short of surrendering to the said agency is decent enough. A word is enough for the wise."
While the Enugu State Government maintains that the SPVs are lawful entities established solely to protect public assets, it insists that no government official personally benefited from the companies.
Nevertheless, the dispute continues to raise legal and public questions over whether the acquisition, management and subsequent commercial allocation of the disputed lands complied with the Land Use Act, the Constitution and binding Supreme Court authorities governing the compulsory acquisition of private property.
In its rebuttal, however, the government did not cite any law or legal framework governing the state-owned SPVs that authorises them to acquire private and investor-owned properties for resale to other investors through a highest-bidder process.