Nigeria Air: Ethiopian Airlines claim unaware project is PPP, has no dealings with NSIA

The East African Carrier, Ethiopian Airlines has submitted its defence at the Federal High Court in Lagos where it is second defendant in the suit filed by the Airline Operators of Nigeria (AON) challenging the establishment of national carrier, Nigeria Air and averred that it said it was not aware the project was under a Public Private Partnership (PPP) scheme.

Ethiopian Airlines also in its defence extricated itself from any dealings with the Nigerian Sovereign Wealth Fund stressing that it has no knowledge of it as it was just a bidder.

The airline in a 37-page document with suit number FHC/L/CS/2159/2022 sworn to by the Country Manager of Ethiopian Airlines in Nigeria, Mr Wondwossen Beyene argued that the Federal Government had agreed to sell 95% of the shares, retaining only 5%.

The document submitted by the airline read, “That the averments contained in paragraph 5 of the Affidavit in support of the Originating Processes is a deliberate distortion of the truth. As far as the 2nd Defendant is aware, the sale of the 1″ Defendant’s shares was absolute, and not under a Public/Private partnership as alleged. The Federal Government of Nigeria agreed to sell 95% of its shares in the 1″ Defendant, retain 5%, invite 46% to Nigerian Investors, and 49% to an international airline.

“By the Arrangement, the Majority stake of 51% in the 1″ Defendant is retained by Nigerians so that effective control of the airline shall remain with Nigerians. It said in its defence.

Ethiopian Airlines in its defence on the Sovereign Wealth Fund, stated, “That whatever might have transpired between the Government of Nigeria, and the Sovereign Wealth Funds are not known to my Employers the 2nd Defendant, and therefore I and my Employers the 2nd Defendant cannot comment on same, as the 2nd Defendant was merely a Participant in a bid process that was publicly advertised by the Federal Government of Nigeria.

The Ministry of Aviation it will be recalled that while declaring Ethiopian Airlines as the preferred bidder for the Nigeria Air Project with 49% stake in August 2022 had combined with three Nigerian investors MRS, Skyway Aviation Handling Company (SAHCO) and the Nigerian Sovereign Fund (46%), with the Federal Government of Nigeria owning 5%.

The ministry in a statement signed by Special Assistant (Public Affairs) to the Minister of Aviation, James Odaudu, however, in less than 24 hours reversed its statement removing the Nigerian Sovereign Investment Authority (NSIA) as an Investor in the project.

The reversal statement titled: Error of Inclusion of SWIA as an Investor in Nigeria Air said the NSIA was not involved as part of the private equity ownership of the airline.

Ethiopian Airlines  also disclosed in its defence, admittance to asking the Federal Government of Nigeria for a 15 years tax moratorium, among other incentives, adding that the request was a proposal for negotiation which the government was at liberty to accept or reject.

The Airlines’ document read in part, “I believe as a fact that the averments contained in paragraph 11B of the affidavit in support of the plaintiff’s originating summons are a distortion of the truth. The second defendant did request tax incentives/concessions for the proposed fledging Nigerian airline, amongst other incentives, which is a normal international practice in international investment negotiations, and not against the law.

“In any case, those requests were proposals and proposed during negotiations with the government and which the Federal Government was at liberty to accept or refuse. The plaintiffs have not shown any proof that the second defendant obtained any tax incentives/concessions for the Federal Government of Nigeria.”