In a bold move that has sent ripples through Nigeria’s corporate and investment circles, Strategic Consultant Ltd, one of Lafarge Africa’s minority shareholders, has stepped into the spotlight, challenging alleged secret sale of the company’s majority stake to a Chinese firm.
What began as a quiet boardroom transaction has now become a high-profile legal battle, with the Federal High Court in Lagos ordering a freeze on the deal and directing all parties to maintain the status quo pending the outcome of an appeal.
Justice Lewis Allagoa issued the ruling on Wednesday after hearing arguments from parties in the ongoing legal battle, which centres on the legality and transparency of the proposed divestment of Holcim Group’s 83.81 percent stake in Lafarge Africa.
Strategic Consultant Ltd, a Nigerian shareholder with a strong interest in corporate accountability, initiated the suit to challenge what it describes as a “surreptitious and unlawful” transaction that sidelines local investors.
The firm contends that the deal violates multiple provisions of Nigerian law, including the Companies and Allied Matters Act, CAMA, 2020, the Securities and Exchange Commission Act, and the Nigeria Investment Promotion Commission, NIPC, Act, particularly concerning the protection of minority shareholders and the participation of foreign entities not registered in Nigeria.
At the heart of the dispute is the claim that Holcim Group, Lafarge’s Swiss parent company, secretly arranged to sell its controlling interest to Huaxin Cement Ltd without notifying or involving local stakeholders—a move Strategic Consultant says violates the fundamental principle of the right of first refusal owed to existing Nigerian shareholders.
Legal Tug of War
During Wednesday’s hearing in the matter, counsel to Lafarge Africa, Mr. Babatunde Fagbohunlu, SAN, informed the court that an appeal had been filed at the Court of Appeal to challenge the court’s earlier decision rejecting Lafarge’s objection to jurisdiction.
He confirmed that the records of the proceedings had already been transmitted and that a formal application for a stay of proceedings was in place.
Supporting the position, counsel to the second defendant, Mr. Mene Josiah, also confirmed filing a separate notice of appeal and urged the court to pause substantive hearings pending the appellate court’s determination.
Both senior lawyers stressed that continuing proceedings at the lower court could risk undermining the appellate process and prejudicing the matter.
However, counsel to Strategic Consultant Ltd, Dr. D. Awosika, SAN, opposed the request for a stay.
He argued that his client had yet to be served any notice of appeal and maintained that under Order 11, Rule 4(1) (2) of the Federal High Court Rules, the mere filing of an appeal does not automatically stop the trial court from proceeding.
Awosika further explained that the appeal filed by Lafarge relates only to the mode of commencement of the suit and does not touch on the substance of the case.
Nevertheless, he urged that if the court were inclined to pause proceedings, it should also issue an order preserving the current state of affairs to ensure none of the parties take actions that could compromise the case or render the court’s eventual decision nugatory.
In a brief but firm ruling, Justice Allagoa agreed with the need to protect the subject matter and preserve the legal process.
“In view of the Notice of Appeal, arguments by parties on both sides, and because of the need to protect the subject matter in this case, I hereby order that status quo be maintained,” he declared.
The case has been adjourned to October 9, 2025, for further proceedings.
Transparency call
Meanwhile, the Senate has called for transparency in the negotiations to sell Lafarge Cement Plc to Chinese investors.
The Red Chamber specifically directed the Bureau of Public Enterprises (BPE) to ensure that the ‘divestment process prioritizes national security and economic sovereignty.’
The resolution was passed following a motion moved by Senator Salisu Afolabi (Ogun-Central) who told fellow lawmakers that the firm had been useful in ‘job creation, infrastructural development and industrial expansion in Nigeria, making it a critical national asset.”
The lawmaker argued that selling off such a key asset raised a series of questions, including local content in ownership structure, national security, and the opening of the process to allow for fair participation.
The motion read in part, “The Senate observes that there are ongoing plans for divestment of the company, reportedly involving Chinese investors, which has raised concerns about the potential for foreign dominance over such a strategic sector in the Nigerian economy;
“(We) also observe that Holeim AG is set to sell its 83.8 per cent stake in Lafarge Africa to a Chinese cement maker, Huaxin Cement Co., in a deal that values Lafarge Africa at $1 billion, a deal which is set to be finalised in 2025, subject to regulatory approval.
“Aware that the cement manufacturing industry is a critical sector directly linked to national security due to its significance in infrastructure development, including the construction of roads, bridges, housing, and other vital public works.”
The Senate also said it was aware that the dominance of foreign ownership in such a sensitive sector poses risks to Nigeria’s economic sovereignty and national security interests.
It also raised concerns that several local investors and stakeholders have expressed interest in participating in the divestment process, but have raised concerns about transparency and their limited access to equitable shares.
The motion raises more concerns about the ‘long-term economic implications of foreign-dominated ownership of Lafarge Cement Plc, including capital flight, job losses, and potential challenges to regulating the activities of foreign-owned entities in strategic sectors.’
However, some senators initially opposed the motion on the grounds that in a free market system, any investor who met the transaction requirements could aspire to put their money in the factory.
One of those in favour of such an argument was Senator Jimoh Ibrahim, who warned against using the Senate as a clog in the Federal Government’s plans to open the economy to foreign investments.
According to him, investors should not be made to fear that they risk having their funds trapped whenever they intend to pull out by divesting their interests.
Senator Sunday Karimi took a similar position, cautioning the Senate against passing any resolution halting the sale of the cement firm.
The motion eventually passed following the intervention of the Senate President, Godswill Akpabio, who observed that the main focus was transparency in the transaction, not an outright stop of the process.
After passing the motion, the Senate mandated its Committees on Capital Markets, Trade and Investment to monitor the transaction and ensure compliance with the Red Chamber’s resolution.
Recent episodes
Divestments and share sales are not new in the Nigerian environment.
Oil and gas, the industry which accounts for some 90 percent of the country’s foreign exchange income has experienced transfers of ownership dating back some 25 years.
The trend has continued with the most recent episodes involving asset and equity transfers involving international oil majors like Shell, Exxon Mobil, Agip and Equinor trasnferring onshore assets in 2023 and 2024 to indigenous operators Renaissance, Seplat, Oando and Chappal Energies for a total sum running into several billion US dollars.
It is noteworthy that many of the Nigerian Independents who acquired former IOC assets are already contributing significantly to the improved production performance Nigeria badly needs to chart its way out of the current economic diffculties.
Affirmation of the early success of this development came recently courtesy of the Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, while receiving a delegation of leaders from the Independent Petroleum Producers Group (IPPG).
These deal completions, the Minister said, have led to a measurable increases in the national production output to about 1.7 million barrels per day, demonstrating clearly that divestment, when properly structured, is in Nigeria’s best interest.
In similar vein, the Senate, last March, specifically directed the BPE to ensure that the Lafarge divestment process prioritizes local content in ownership structure, economic sovereignty and national security to safeguard job creation, infrastructure development and sustainable industrial development.(Vanguard)
