Industrial and General Insurance (IGI) on Tuesday requested the Federal High Court in Abuja to cancel the sale of NICON Insurance to Jimoh Ibrahim, who had on Sunday agreed to a truce with the government on another dispute that lasted six months.

IGI also asked the court not to give effect to the Terms of Settlement reached between the government and Ibrahim on the return of NICON to him.

The suit, filed by IGI counsel, Abiodun Adesanya and Kola Awodein, contended that the purported sale of 70 per cent equity to Ibrahim is unlawful, null and void, since Section 1 of the Privatisation Act of 1999 recommends that only 40 per cent equity of NICON should be sold.

The ratio was increased to 51 per cent by the Bureau of Public Enterprises (BPE) (Privatisation and Commercialisation) Order 2004, IGI argued, recalling that "when questioned (about the percentage sold to Ibrahim), the reply of the BPE was that there was a resolution of the National Council on Privatisation (NCP) for the increase."

IGI urged the court to declare that "a resolution of the NCP on privatisation is not coterminous with the official gazette of the Federal Government."

It is also seeking a declaration that Assurance Acquisition Limited (AAL) used by Ibrahim in buying NICON is a front not qualified for the sale.

It alleged that AAL was incorporated after the August 1, 2005 deadline for the execution of "Liability Aversion Agreement and Non-Disclosure Agreement," (whereas) before a company would be regarded as a lawful bidder it must execute the statutory agreements. (AAL) did not, and could not, have executed the agreements since it was incorporated only on August 26, 2005."

IGI insisted that AAL did not meet the pre-qualification condition for bidding, which demanded that investors must possess evidence of technical, managerial, and financial capabilities.

"The process of the selection of (AAL), its purported vetting as bidder, and the purported sale of NICON to it was in bad faith, reckless and unlawful."

Besides, IGI alleged that AAL was given undue privilege which included a waiver of a statutory levy of more than N463 million granted by former President Olusegun Obasanjo, who did not have the authority to do so.

IGI said it emerged as the reserved bidder, and urged the court to declare it as the lawful preferred bidder.

No date has been fixed for the hearing.

Despite the latest court challenge, new board of directors were constituted for NICON and Nigeria Reinsurance Corporation (Nigeria Re) in Abuja on Tuesday, with Ibrahim emerging as NICON Chairman.

He is also NICON Group Managing Director.

Other NICON board members are Amos Idowu, Stephen Ogedegbe, Emmanuel Esiemohiah, Catherine Okpareke, Dipo Bailey, and Binta Bello.

Two of them represent the BPE, one the Finance Ministry.

The board of Nigeria Re is chaired by Amos Akingba. Other members are Ibrahim, Bailey, Greg Egu, M. Abiodun Wright, Irene Chigbue (BPE Director General), Gbenga Orunsajo, Ismaila Sani, Adeniyi Akintola, and Joe Ameh.

The terms of settlement which paved the way for the return of NICON and Nigeria Re to Ibrahim, the core investor in both companies, require that a new board be constituted to comprise representatives of the joint shareholders according to their share holding ratios.

Ibrahim holds about 51 per cent shares in Nigeria Re.

The agreement, dated May 8, was signed by Chigbue, federal Attorney General and Justice Minister, Michael Aondoakaa; Finance Minister, Shamsudeen Usman; and counsel to NICON and Nigeria Re, Adeniyi Akintola.