Covenant University Journal of Politics & Internationall Affair. Vol. 7 No. 1, June 2019 ISSN: p. 2354-3558 e. 2354-3493 DOI: 10.20370/ddtf-z111

An Open Access Journal Available Online

Bleeding the Commonwealth: An Assessment of Odu’a Investment Company Limited, 1985-2008

Abimbola Oyarinu

Department of History and Strategic Studies, University of Lagos, Akoka Lagos,

Received: 24.02.2019 Accepted: 25.05.2019 Date of Publication: June, 2019

Abstract: Corruption is a scourge destroying public enterprises in Nigeria but the idea that corruption is the major reason why public enterprises fail might be far from the truth. Enormous corruption occurred in Odu’a Investment Company Limited between 1992 to 2008, which led to the obliteration of the Yoruba patrimony. While associated companies, which are run by private hands are making profits and paying dividends, the subsidiary companies are being bleed white owing to massive corruption stemming from a dysfunctional structure. A historical method is adopted as data were collected from archives, interviews, private records, company journals, newspapers, books and internet materials. The study is both descriptive and analytical and data is analysed using content analysis. This work concludes that corruption is not the major reason why public enterprises fail but the structure like neorealism postulate. The structure of public enterprises is discovered to lack Agency.

Keywords: Corruption, OICL, Owner-States, Public Enterprises, Structure

Introduction made her balance of trade a mockery The idea that government has no to the eyes. Awolowo, an business in business is an argument accomplished Keynesian economist, advanced and popularized by neo- had realized as far back as the 1950s liberalists in the 1970s. While this that aggressive state investment is a might be beneficial to countries with necessary condition for rapid strong economies and wealthy private economic development, especially individuals, the same cannot be said where you have a weak indigenous of countries of the Global South. capital base (Awolowo, 2014). The Neoliberal ideas have further wanton corruption in state-owned impoverished African nations and enterprises has made the idea of a 48

Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 government led economy unpopular, directive not to collectively own which seem the fastest path to assets, the new military administrators development. tinkered with a lot of options and in OICL’s long history thus began in the process consulted the erstwhile 1949 with the establishment of Premier of the Western Region, Chief Western Region Production Obafemi Awolowo. He warned Development Board (WRPDB) and vehemently against selling, and rather, the Western Nigeria Marketing Board advised that a holding company in 1954. These later transformed into should be established to hold the WNDC in 1959 and later Western assets of the company together (Daisi, States Industrial Investment and 2018). Therefore, a State Credit Corporation (WSIICC) in 1973 Implementation Committee (SIC) and eventually OICL in 1976. The comprising the three military companies that were established under governors and their secretaries to these corporations had governments government and Heads of Service was of the regions owning less than 49% established with Brigadier David equity in most cases, thus allowing Jemibewon as the Chairman. The first the expatriates to manage the meeting of the committee was held in companies. The government of the on March 3, 1976. Between Western Region in some cases that date and April 1, 1976, when the subscribed only land as its own equity states effectively took off, the share, such land was capitalized committee deliberated on all matters (Fasuan, 2018). The corporations affecting the three states. Broadly thrived at independence up until 1966, speaking, the committee's duty was to when political issues were to decide ensure the smooth take-off of the their future. These were the coups that newly created states, the equitable soon metamorphosed into the distribution of shares and assets of the Nigerian Civil war in 1967. The war former Western State since the led to the decimation of the regional Federal Government directed that new structure, which gave way to the state states should not, as far as practicable, system as it is currently practised. maintain common services (OICL, When the Western Region in 1976 2009). was broken into three states, namely Theoretical Framework Oyo, Ondo, and Ogun, Brigadier This paper would receive two David Medaiyese Jemibewon was hypotheses in relations to the topic, appointed the Military Governor of which are Systems theory and Agency , while Wing Commander hypothesis. System theory was David Ikpeme and Lt. Col. Ayodele propounded by Ludwig von Balogun were named military Bertalanffy however with the end goal governors of the newly created Ondo of this investigation Niiklas and Ogun states respectively (OICL, Luhmann's sociological clarification 2009). In order to ensure the smooth would get the job done. It underscores take-off of the new states and to the manner by which organized adhere to the Federal Governments systems (human and non-human)

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 react in a versatile method to adapt to the manager owns 100% of the firm critical changes in their outside versus when the manager is sharing an surroundings in order to keep up their equity share with others. In the former fundamental structures unblemished. structure, the owner/manager will act System theory explains how politics to maximize the firm's welfare and other external factors affect the because the full benefit of this structure of OICL and until external maximization will accrue to him. and internal factors can leave the However, when the owner/manager structure of OICL unblemished then shares, say, a 20% equity stake to an corruption would continue to be a outside shareholder, agency costs will problem (Johnson, 2005). arise from the divergence of interests Adam Smith as early as the eighteenth between the manager and the century had created a significant shareholders. Jensen and Meckling number of the key ideas of Agency conclude that these agency costs are theory. From the 1970s up until 2003, inevitable when there is a separation different researchers have added to of ownership and control, and that to the theory. Researchers like Jensen, call these costs "inefficiencies" is Mitnick, Murphy, Ross are known appropriate only if comparing to an figures who have added to the "ideal world" where principal and advancement of various shades of agent interests could be aligned at Agency theory. This work would, zero cost. The proposition of Agency therefore, concentrate on Jensen and theory as espoused by Jensen and Meckling's rendition of the theory. Meckling is vital in explaining the For the most part, Agency theory just subject matter of this thesis. It put; is one in which one or more discusses ownership pattern which is persons (the principal) engage another obtainable in OICL. It discusses the person (the agent) to perform some approach for management of wholly- services on their behalf, which owned companies and subsidiary involves delegating some decision- companies, which are prevalent in making authority to the agent. As part OICL (Jensen and Meckling, 1976) of a broader theory of the firm, Jensen Military Board and Meckling explore agency costs Odu'a made a total income of N85.8 and its sources. They identify million between 1985-1989. The monitoring the agent's actions as a subsidiary companies that gulped source of agency cost, but they also 84% of the investment funds identify at least two other sources: generated only N15.5 million (18%) bonding costs borne by the agent and of the total as opposed to N45 million the wealth loss borne by the principal (52%) generated by the Associated when the agent's actions do not Companies. Even Minor Holding over maximize his welfare (referred to as the same period generated N16.7 "residual loss"). To that end, Jensen million (19.5%). In the five-year and Meckling compared the period (1985-1989), out of a total management behaviours found in two income of N86 million earned, over different firm structures: one, where 70 per cent came from the 21

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 associated companies in which Odu'a assets of the Company. Equally the had no more than 50 per cent equity operational effectiveness of OICL's participation. The 24 companies major property holdings shows wholly owned by Odu'a or in which it complacency. There were accounts of has majority shares contributed only inadequate attention to the prompt 18 per cent of income. The remaining collection of rents, of broken down 7 per cent came from dividends generators, of frequently unusable provided by minor investments in elevators and of poorly maintained different companies. It is this water supply and sanitation facilities relatively unimpressive performance in OICL properties that are by all that provokes a continuing re- means gold mines because of their appraisal of the Company. This was a chosen locations. Mabogunje clear case of robbing Peter to pay attributes this misnomer to Paul. A casual observation will reveal indiscipline. that OICL did not establish any new When an individual with business, did not venture into any new tremendous and easily industry and created very few jobs. perceptible capabilities fail to OICL during the period was a risk realise his promise, one of the averter, staying in the safe and invest reasons usually adduced is his lack of discipline and in business areas where income application… Within an generation is trusted into hands of organization, such as a business others and crumbs of dividends travel establishment, discipline can be in regularly as a routine (OICL, 2009, examined at the level of the 26). Board, the Management and the During the period, Odu'a Investment generality of the staff. The Company Limited had an interest in bottom line for a disciplined some 60 companies. In 17 of these private sector organization is its companies, equity participation was performance in terms of relative above 75 per cent, in another 7 it was profitability and the quality of its services (Mabogunje, 1999). between 51 and 75 per cent; in 10 Following from the above, it is others, it was between 26 and 50 per important to point out that all the cent; while in the remaining 26, it was Chairmen of Board that supervised below 25 per cent. All companies in such indiscipline were mainly military which OICL has over 50 per cent men with little or no knowledge of equity are referred to as Subsidiary business ethos. Also, three of the five Companies, companies with between Board Chairmen were not Yoruba’s 49 and 11 per cent is referred to as managing, a Yoruba heritage. The list Associated Companies, while of Board Chairmen during the period investments below 10 per cent are are (OICL, 2009, 101): known as Minor Companies (OICL, 1. Navy Captain O. Akhigbe (Rtd) 2009). 1985-1987 The quality of service in the period 2. Navy Captain O. George (Rtd) under review, speaks of the many 1987-1988 failing maintenances of the physical

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3. Colonel S. A. Oresanya (Late) profitability and growth of the 1988-1990 conglomerate. The second task was to 4. Navy Captain S. A. Olukoya elevate the status of OICL by (Rtd) 1990-1991 spreading its benefits and services to 5. Colonel A. K. Adisa (Late) 1991- the owner states of Oyo, Ondo and 1992 Ogun. As a first step to achieving his Arising from the disappointing five- mandate, Chief Adewunmi and year review of the Company's income Management drew up a plan for the from 1985-1989, the Company's invigoration of the member Board decided to take action. The companies through a combination of Board at its meeting of 11 December some complementary strategies, most 1989 decided to appoint Chief principal of which was the injection of Olufemi Adewunmi as the Group funds into the companies and the re- Managing Director to succeed Mr engineering of their respective Iyowu (1984-1990). Mr Iyowu had management teams. Chief Adewunmi been the longest-serving GMD of the and his management team believed Company from 1976 and was due to that share dilution as a fund step down on 6 March 1990. Colonel generating strategy would help S. A. Oresanya who was the achieve his first mandate. For the Chairman of Board at the time signed share dilution exercise, the the letter of appointment for Chief Management began with Odu'a Olufemi Adewunmi. A part of the Textiles Industry Limited, Ado-Ekiti, letter read: because of it's dire financial and I have the great honour and technical needs, which were pleasure to inform you that the enormous. Relevant stockbrokers and Board of Directors of Odu'a advisers were appointed to handle the Investment Company Limited exercise (OICL, 2009). has decided that you be The second mandate, he believed appointed the Group Managing Director of this company with would be pursued through the effect from Tuesday, March 6, Community Investment Project 1990. The decision was arrived Scheme (CIPS), which would involve at, after careful consideration setting up small-scale companies in of all relevant information on different communities in each of the the succession plan within the local government areas in the three Group as well as the records of states, as they were then Oyo, Ogun your excellent performance and and Ondo. The CIPS was structured contributions at various lower basically to mobilise investable funds levels in which you had served in the hands of individuals in the (OICL, 2009). different local governments to make On his assumption of office, Chief up 60% of the equity of each Adewunmi had two mandates – the company, OICL was to make up the first was to make the members 40% balance. The major business (subsidiary and associated) companies concern of the small scale companies in the Group perform maximally to was to process agricultural produce contribute to the composite

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 common in the local community refurbished Cocoa House to the Board where the business is to be domiciled. by December 1991 but could not keep The development plans were that promise (Odu’a, 1991b, 8). The articulated and presented to the Board building as at mid-1991 had gulped a for approval. The Board gave its total of 23 million naira that was consent to the scheme but emphasized contributed by the three owner states that it must be approached on a step- and Wemabod Estate Limited (the by-step basis. For instance, the Afijio owner of the building). Cocoa House Local Government in Oyo State, which was one time the tallest where fruit and citrus processing was building in West Africa was gutted by conceived as the starting project for fire in 1985 and for seven years of Afijio Community Investment reconstruction, the building had Company was because the area is gulped a total of 44 million naira, reputed for the enormous citrus that is which was committed by the now four harvested there, most of which perish owner states and the Wemabod Estate because of lack of processing (OICL, Limited. After the refurbishment, the 2009, 72). Egbeola Ventures Plc was building had an additional escape established at Ikole Ekiti, this was a staircase at the east and west wings in hotelier and catering company addition to the internal staircases. The established between Odu’a and the fire protection system was built to locals in the area (Odu’a, 1991a, 7). meet a global standard and was This was the position of things before certified as such. It has a total let-able the Babaginda Regime replaced space of 10,500 square metres of military administrators with civilian office accommodation with a administrators in December 1991 and penthouse providing 2 units of in the case of OICL, the change of residential accommodation on the government sometimes means 25th floor. The building was first everything changes – from Company commissioned in 1965 by Chief philosophy to Company objective. Ladoke Akintola but the second Chief Segun Odegbami attributes commissioning in 1992 attracted the these to “government’s overbearing four governors of the owner states, influence on business”. traditional rulers and important SOEs should be allowed to run persons from all over the southwest independently of government (Odu’a 1992a, 1). After the interference, as businesses completion of renovation works and cannot thrive in an with all the money expended, it was environment where policies only 20 per cent of the 24 storey and management do not feel secure (Odegbami, 2018). building that was occupied. The The problems of Chief Adewunmi headquarters of OICL did not also began with the change of government move back to the building but based on challenges that were self- maintained its office at the Cocoa imposed. In some other quarters, House Extension (Odu’a, 2013, 14). those issues seem like excuses to hang In 1991/1992, the equity of Wema him. The GMD was to deliver the Bank was diluted with OICL's

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 shareholding coming down to 40%. In From Reformation to Deformation the same period, Cocoa Industries In 1992, a reformation exercise was Limited's (CIL's) equity dilution was carried out to fix some of the bad problematic following a series of business decision and perceived litigation hanging on the Company corruption that took place between (Odu’a, 2013, 14). During the equity 1989 and 1992. The Adewunmi led dilution exercise of CIL, 70% of the management team had started certain Company’s shares were sold to reforms even before the 1992 reforms Emerald Limited, owned by one were conceived. They sought to Alhaji Garba. However, Vegetable Oil evolve a more result oriented and Nigeria Limited, Caxton Press (W.A.) accountable management, strengthen Limited, National Bank of Nigeria financial and accountability controls and Odu’a Textile Industries Limited at each company levels, ensure the had their equity diluted in the first financial solvency of each business half of the 1990s. Between 1995 and unit through effective cost control and 1997 OICL’s subsidiaries had reduced prudent financial management to 13 from initial 20, as most wound (Odu’a, 1992b). up following massive corruption and The Executive Governors of the four inefficiency. owner States of OICL who assumed Odu’a Textile, like others, turned out power following the shake-up after to be a bad investment option at the the Henry Orka coup, met in Ibadan time, as the proceeds following the on Tuesday 14 January 1992 to huge investment in the company were discuss the future of the Company. discouraging. The Board still went The Governors expressed their beliefs ahead to replicate the same model in in the presidential directive of 27 other subsidiary companies under August 1991 that states involved in OICL. Enough capital was injected common commercial services should into ailing companies either financed set up a board of trustees to run such through equity or loans and also undertakings or, in the alternative, backing such investments with they should be capitalized and run as managerial resources from the Head public quoted companies to which Office. In a number of cases, the governments and individuals can deployment involved moving staff subscribe (Odu’a, 1992b). from the Group Headquarters to the The Governors, therefore, resolved to subsidiaries, from subsidiary implement the Federal Government companies to subsidiary companies directive as it affected OICL. and from subsidiary companies to However, in view of the fact that the Group Headquarters. This strategy as Executive Governors were not a party stated by Chief Adewunmi ensured, in to the decisions taken by the last most cases, substantial improvement Military Administrators, it was in the performance of the companies resolved that the Omolayole in terms of productivity and Committee report and other relevant profitability. papers should be re-examined by the

four states to arrive at a just

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 conclusion. The Governors resolved decision on the privatization that: exercise; i. The constituted Board of c. to look into the possibility of Trustees that was set-up after decentralizing Wemabod for the Head of States effective revenue collection, pronouncement should be finally; suspended. d. to examine all other issues ii. The final decision on a new relating to Odu’a and its structural set up of the subsidiaries and advise the Company was to be reviewed governments of the now four and this led to constituting the owner states as appropriate Idowu Technical Committee (OICL, 2009, 96). (Odu’a, 1992b). The Chief N O Idowu Committee By April 1992, the Governors equally submitted its report in October 1992. directed that the two schemes i.e. The totality of the Committee’s share dilution and CIPS should be recommendations was the whittling suspended pending the report the down of the size, scope of authority Chief N O Idowu led Technical and responsibilities of the Group Committee which was set up in May Headquarters as summarized in the 1992 with the following people as following conclusion among others: members: A. The current staff of Odua are 1. Chief N O Idowu – Oyo State too many and should be pruned (Chairman) down. Though the management 2. Chief E V O Koleoso – Ogun staff are highly qualified, the State (Director-General) post they occupy is superfluous. 3. Mr M O Oyedeji – Oyo State The Committee was convinced (Director-General) that the flamboyant 4. Dr Mrs G T Fatunla – Ondo management of Odu'a should State (Director-General) be streamlined and the staff 5. Mrs F O Okediji – Oyo State reduced considerably. It was (Secretary) (OICL, 2009, 96). recommended that with the new The terms of reference of the roles conferred on Odu'a with Committee were; consequent reduction of its a. to look into the structure of functions as a result of the Odu’a Investment Company proposed privatization of Limited and advise the owner- almost all its subsidiaries. The states on how its management OICL should be headed by a could be reduced; Managing Director with the b. to undertake a technical following four (4) main appraisal of each of the Odu’a departments – 1) Investments subsidiary companies and 2) Finance and Administration submit recommendations that 3) Estates and lastly 4) Internal would facilitate governments’ Audit.

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B. It is also recommended that Board accepted his proposal and he under the new dispensation, the went on a goodbye tour of the new role of Odu'a should be member companies between 25 limited to monitoring February and 12 March 1993. On the investments, receiving same day, Chief Adewunmi formally dividends and paying the same handed over the duties of the CEO of to owner states. Under this the Conglomerate to Alhaji Rafiu S. arrangement, OICL would no Aruna (OICL, 2009, 98). longer supervise companies like Arising from the pattern and sequence West African Portland Cement, of event, it is evident that Chief Wema Bank, Nigerite and Adewunmi was a victim of political Wemabod Estates. victimization as can be deduced in C. The privatized companies one of his statement at a meeting of would be managed by their the owner States where he alluded that respective boards and “for the Company to make management, but Odu'a should meaningful progress, The owner have the responsibility of States, Board and Management have bringing to the attention of the to work together” (OICL, 2009, 96). It four owner states, cases of bad is clear that all was not well with him management or any other and the new state Administrators that important matters affecting the just took over power. It is not clear privatized companies in which whether it is based on performance the four owner states would still issues because the facts on paper do have at least 40% shares not warrant massive shake-up. As (OICL, 2009, 96-98). events later unfolded, it became clear The governors accepted the that whoever wanted Chief recommendations of the committee Adewunmi out, did it to have and asked the Technical Committee to unrestricted access to loot and transform into the new Board of the plunder. The inherent mistake of the Company, so as to be able to then political class, however, was that implement the recommendations they threw away the baby with the submitted in the report. At this point, bath water. The ideas of Chief it became clear to Chief Adewunmi Adewunmi was beginning to bear that his services to the Company fruit especially the CIPS, which would be severely impaired following would have galvanized the economy the reforms. Hence, by November of the southwest and probably had 1992, he had made up his mind to such far-reaching impact as the retire. He reportedly began a 45-day WNDC had in its time. vacation on 14 December 1992 and Independence of the Board came back 29 January 1993. And on Since the short stint in power ended 25 February 1993, Chief Adewunmi for the Civilian Governors who took gave notice of his retirement from power during Babaginda's experiment OICL, he proceeded on his 111-days with the military/civilian government terminal leave on 15 March 1993. The in 1992 and following Abacha's ouster

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 of Ernest Shonekan, the men in 1992 to N153 million in 1995 uniform took over the reins of the (Odu’a, 1996, 5). Odua owner States. This time, Board room experts have consistently however, the Military Administrators rebuffed the idea of government did not interfere in the day-to-day interference in the Board of SOEs. In running of the company and equally the case of OICL as it would be did not sit on the Board of OICL. revealed subsequently in the chapter, Chief N O Idowu enjoyed board that immediately, the owner states independence in which Alhaji Aruna allowed the Board to run (Managing Director of OICL at the independently, the Board went time) alluded to; "such conducive AWOL. Massive corruption and environment devoid of political mismanagement became the order of interventions was most suitable for the day and the Company was almost economic growth and standard bled white owing to unbridled boardroom practices". During this feasting on the Company's resources. period the Company was presumed to One can then argue that it is be on clean health status and to prove impossible to marry the interest of the this, it paid dividends of 100 million Board with that of the Owners naira to the four owner states in 1994 considering that it is a government- ((Odu’a, 1995, 1) and by 1995 it paid owned company and what is 60 million as dividends (Odu’a, 1996, considered to belong to everybody, 5). belongs to nobody. A close study of The Company profit, which was the theory of Agency shows that the N52.5 Million in 1992 has risen to marriage of the interest of the Board N153 million as of 31 December and that of the Owner States is 1995, when Alhaji Aruna was feasible, so long as Agency Cost can Managing Director. The then be factored. Equally, the tenure of Managing Director used these Board Chairmen also must be reviewed. numbers to justify progress made under his watch. Massive Corruption and Eventual The projection for the current Shake-up 1996 is N170 million, this was Towards the beginning of 1997, there proof of efficiency after emerged symptoms of illnesses that reorganization. It is evident that could terminate the life of the Odu'a has been turned into a company. The Military more efficient organization and Administrators of the now five states has achieved a higher profit per net asset on per share or per – Colonel (Oyo State), capital employed during the Navy Captain Anthony tenure of the current Board. Total Onyearugbulem () now investment rose from N237 late, Colonel (Osun million in 1992 when the present State) and Lieutenant-Colonel Board was constituted, to N428 Muhammed Bawa () – thus million as at the end of 1995, decided to halt the impending danger while profit after tax also and save the group from collapse. On increased from N52.5 million in

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Monday 3rd of February 1997, the which was summarily rejected by the Military Administrators of the five Military Administrators. In place of owner States met in Ibadan to salvage the Panel’s report, the Interim Board the situation as they discovered that made recommendations that formed the company had been grossly the basis of the approach adopted to mismanaged. They dissolved the cleaning the Augean stable at OICL. Board headed by Chief N. O. Idowu, The suspended staff of OICL were who had spent two terms as Chairman however dismissed/retired after an – the first ever Chairman to do so at investigation revealed their culpability the time. They also sent the in insider trading, corruption, company’s Group Managing Director mismanagement and gross – Alhaji Aruna and the two Executive incompetence within the Company. Directors (Finance & Operations) on The summary of the acts committed suspension. An interim board was by the dismissed/retired officers is as constituted under the leadership of follows: Otunba M A Jobi-Fele, an 1. Alhaji R S Aruna, dismissed experienced and astute industrialist Group Managing Director of (Odu’a, 1997a). Members of the Odu’a Interim Board of Directors were: a) Acquired a property of Rev. (Ms) Modupe Soremekun (Ogun Odu’a at no. 25 Oba Akran State representative) Chief Kola Road, Ikeja, surreptitiously Omonije (Ondo State representative) through Engineer M. O. Mr Femi Ekundayo (Ekiti State Okeyale, former Managing representative) Alhaji Rasheed Director, Wemabod Estates Adesokan (Oyo State representative) Limited, a subsidiary of and Mr Akin Akinola ( OICL; representative) (Alabi, 2011, 31). b) Influenced the award of a At the same meeting of the owner- contract for the painting of states, a panel was set up to Lagos Airport Hotel for investigate the activities of the Board N3.5 million to his wife; and Management of both Odu'a and c) Incurred a personal its subsidiaries. On the panel were: telephone bill of N1.9 Chief Adetunji Fadayiro (SAN) million within a period of Chairman (Ogun), Alhaji Lawore one year; Adeleke Olayanju (Osun), Mr Amos d) His wife incurred a medical Olalere Bamidele Ogunlowo (Oyo), bill of about N340,000.00 at Engr Olawunmi Sunday Osakuade a time; (Ekiti), Engr Ropo Alabi (Ondo), e) Authorized the lease of No. Chief (Mrs) Anike Yusuf (Secretary), 11, Bathurst Road, Apapa, and two consultants were hired – Mr at a rent of N120,000.00 per Emmanuel Adeyemo Ogunlowo and annum, while the same Mr Timothy Ademola Oke (Odu’a, property was sub-let for 1997b, 5). The Panel was given two N600,000.00 per annum months to come up with its report, and;

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f) He led a team of companies traded with Management staff that Lagos Airport Hotel and incurred an expense of N90 carried out most of the million as over for one year. construction jobs of the 2. Mr K. Oshisami, former hotel; Executive Director of Finance b) Awarded a contract for the and Planning (Odu’a) who was construction of Oranmiyan retired with full benefits. Hall billed for N18 million a) As Executive Director in to his company and further charge of finance, he did not escalated the cost of the display adequate contract to N52 million; professional diligence in the c) His company constructed payment of an unsolicited the Hitel’s kitchen, which N10 million to Associated was to have been done for Electrical Company Limited N10 million for N16 as a deposit for shares; million; b) He was on the Board of d) He connived with Alhaji Great Insurance Company, a R. S. Aruna, former Group subsidiary of Odu'a when Managing Director of the Company deposited N65 OICL to award a contract million in failing Financial to Titilayo and Partners, a Houses; and company owned by Alhaji c) Although no case of Aruna’s wife, to paint the financial impropriety was Hotel for N3.5 million. established against him, the The job was shoddily done former Executive Director and should not have cost of Finance and Planning was more than N1.5 million; found to be weak and e) He took a cheque complacent. exchange of N125,300.00, 3. Mr A O Martins, dismissed which was returned unpaid Head of Estate Department of by the Bank; OICL f) He authorized an a) He initiated the granting of expenditure of N1.9 the lease of 11 Bathurst million for Road, Apapa, to his personal advertisement/promotion friend at a price below the of the Hotel, above his market value. authorized limit of 4. Mr K Ojerinde, dismissed N500,000.00; and Managing Director of Lagos g) He awarded a contract of Airport Hotel, Ikeja N31,495,942.00 to Dee & a) He floated two companies Cee Co. Ltd, his private Dee & Cee Construction company. Company and Sapphire Nigeria Limited. These

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5. Engineer M O Okeyale, Finance, Wemabod Estates dismissed Managing Director, Limited. Wemabod Estates Messrs M. A. Liadi, dismissed a) He occupied three (3) Executive Director of Finance houses of Wemabod while and Administration, Lagos still drawing his housing Airport Hotel, Ikeja. allowance of N11,250.00 Mr J A Moronkeji, dismissed monthly from Wemabod; Finance Manager, OICL b) Through proxies, he These three former officers clandestinely took over (Nos 7, 8, 9 above) never raised two (2) properties of OICL a whimper against the financial – No. 78, Akinola Cole atrocities and improprieties Cresent Ikeja and 16, committed by their former Ojora Avenue, Ikeja; Chief Executives. c) Overpaid N1 million to 8. Mrs A A Abiola, Managing Messrs Oyeleke Afolabi Director, Western Hotels and Company in relation Limited retired with full to transactions between benefits Wemabod Estates Limited a) She was guilty of and Guinness Nigeria Plc; managerial ineptitude; and d) The sewage system b) During her tenure as initiated by him was a Managing Director, no white elephant project, as positive cash balances were it never worked for a day recorded at Lafia and since it was commission; Premier Hotels, a trend and which was reversed e) A loss of N3.3 million immediately after she was arose from the under- removed. letting of a property to 9. Dr R. O. Oduola, Senior Messrs Oyeleke Afolabi & Economist (OICL) retired with Co. full benefits for dwindling 6. Miss O. F. Adeyanju productivity and old age. (dismissed), former Company 10. Messrs Y. A. Aderibigbe, Secretary/Legal Adviser of dismissed Managing Director Wemabod Estates Limited: of Wrought Iron Nigeria a) She had a proprietary limited interest in Modupe Ore- Messrs S. A. Lawal dismissed Oluwa Chamber, a firm of Managing Director of Fisheries Solicitor to which she Services Limited admitted as having These two former officers awarded legal briefs of indulged in ordering materials N1.8 million. without recourse to standard 7. Messrs Olu Orisaleye, procedure and without dismissed Executive Director of authority. Such goods, when

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supplied, were never taken to Industries Limited, a the store or recorded before subsidiary of Odu'a. use, thus giving room for 12. Engineer M. O. Oduola, abuses. dismissed Controller of Furthermore, Messrs Y. A. Engineering Service, Lagos Aderibigbe without reference to Airport Hotel, Ikeja. the Board of the Company a) He connived during his invested N150,000.00 in Open tenure at Lagos Airport Gate Finance Co. Ltd, a Hotel, actively with the company, which has since former Managing Director, failed, thus trapping the Mr Ojerinde, in the Company's assets. perpetration of atrocities. He fraudulently collected a 13. Messrs A. O. Okesola, course allowance of dismissed Senior Manager (Legal) N10,000.00 for which there OICL. was no evidence of a) He has the acting Company participation. His tenure at Secretary of Epe Plywood Wrought Iron (Nig.) Ltd was a Industries Limited and was a disaster. party to an obnoxious deal In the case of Mr S A Lawal, he between DHL and Epe committed Fisheries Services Plywood Industries Limited, Limited to repair his private car thereby making the to the tune of N80,350.00. He Company lose N10 million. used the Company's money to 14. Messrs A. M. Lamina, pay personal Accident dismissed Assistant Manager Insurance Premium of (Administration) OICL N11,675.00 and made frivolous a) As the acting General kilometre allowance claims to Manager of Western the tune of N340,000.00 for Livestock Company, he using is his private car for ruined the Company with official duties. Sometimes, he his excesses to the extent gives out Company money in a that he gave a live cow to good Samaritan style. He also his friends as a gift; could not give an accurate b) As Manager in-charge of account of Rent Advance of Odu’a Group Headquarters N100,000.00 disbursed. Vehicles, he did not know 11. Messrs T. K. Oyenuga, the number of vehicles in dismissed Senior Manager the fleet; and (Operations) OICL. c) He indulged in excessive a) He was the "dramatis vehicle repair bills. personae" in the signing of 15. Engineer F K Akintola, the obnoxious agreement dismissed Executive Director of that precipitated the Operations, OICL. problems of Epe Plywood

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a) He received an honorarium ridiculous amount of N2.5 of N200,000.00 from the million and in respect of which former Managing Director, the lessee attempted to sublet Lagos Airport Hotel, Mr for N15 million was revoked. Ojerinde; 3. Nos 21-29, Oba Akran Avenue, b) He was culpable in the Ikeja. The five properties on demise of Union this parcel of land were Beverages and Western irregularly leased and the leases Livestock Company, were deficient in terms of rent thereby causing OICL a and tenure. Through a loss of over N35 million; concerted effort, two of the c) He lost two cars to armed properties were surrendered, robbers in quick whilst two others had their succession under lease revoked and the last suspicious circumstances. property was negotiated for a When pressed, however, shorter lease and higher one of the cars was economic rent (Odu’a, 1997, 4). recovered; and As of 1997, all the above properties d) He served on the Board of were recovered while efforts were Wemabod Estates Limited made to recover others in the and left traces of financial subsequent years. Certain shares that indiscipline culminating in were sold or about to be sold were the mismanagement of recovered while companies that were N39 million received as almost liquidated to private insurance compensation individuals were recovered. Such (Odu’a, 1997c, 1-3). included Cocoa Industries Ltd. and Following the damning revelations of Epe Plywood Industries Ltd (Alabi, the monumental corruption that took 2011, 25). In order to retrieve all the place within the Odu’a Group, efforts ill-gotten wealth from the indicted were made to recover properties that persons, they were made to face the had been fleeced by kleptomaniac public assets and funds recovery officers of OICL. The properties tribunal. include: In July 1997, the Interim Board was 1. No. 11 Bathurst Road, Apapa, dissolved and a substantive Board of Lagos. This property was Directors headed by Otunba Jobi-Fele purportedly leased as a shanty was inaugurated by the owner-states. for a period of twenty (20) Other members of the new Board years. The terms of the lease were: Rev. (Ms) Modupe Soremekun have been found to be ( representative), Chief controvertible. The lease was Kola Omonije (Ondo State therefore revoked. representative), Mr Akin Akinola 2. No. 4, Ofin Road, Apongbon, (Osun State representative), Chief Lagos. The lease of the Deji Fasuan (Ekiti State property which was made for a representative) and Senator Yemi

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Brimo Yusuf (Oyo State1. 1. Drastic curtailment of Group representative) (Alabi, 2011, 25). Headquarters expenses: The

Achievements after Reforms curtailment, which started with the Following the shakeup at Odu'a, the former interim Board was Company moved back to profitability improved upon. Expenses on across its subsidiaries. The details of motor vehicle repairs, medical the achievements of the Company expenses, hotel bills, frivolous under Otunba Jobi Fele are staff allowances and outlandish highlighted below: terminal benefits were greatly reduced.

Quarter Ended Quarter Ended Savings Quarter Ended Quarter Ended Savings % September 1996 September 1997 % December 1996 December 1997 N N N N 25,173,490 12,766.780 49 33,273,074 14,420,118 56

the past where staff were owed • The above table shows that 49% for months before being paid. Mr and 56% reduction occurred in Victor Ayetoro, the current the years under review Manager of Corporate Affairs respectively, in spite of the (OICL) attested to this inflation rate in the larger development. Nigerian economy, which stood 4. Improved Financial Checks: The at 50%, and also considering the Group Headquarters through the increment in staff salary within introduction of additional the period. accounting and administrative 2. Fixed Deposit Account and re- control measures ensured that: negotiation of interest rate: The a. Management of subsidiaries Company accumulated is limited to an expenditure N31,627,926 in its fixed deposit ceiling of between N25,000 accounts as at the end of to N100,000.00. Any February 1998. Also, the Board expenditure proposal above successfully re-negotiated this ceiling will have to be upwards the interest rate on referred to the Chairman of deposits with Banks from 8% to OICL for approval. 13% and reviewed downward b. Key personnel of the Group interest on overdraft facilities Headquarters and the from 22% to 15%, thus, reducing subsidiaries were the hitherto heavy interest consistently routinely burden. redeployed for better service 3. The motivation of Staff: delivery. Following the increment of 5. Following the restructuring and salaries, which was also reforms, a number of offices promptly paid unlike the became vacant. The Board situation, which was the norm in appointed a consortium of

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reputable consultants who balance rose from 2 million to conducted the exercise to get about 12 million. Also, an capable hands to fill the vacant increase in occupancy rate seats. occasioned by the intervention of 6. Lagos Airport Hotel, Ikeja the Chairman and the Board in a) Increased generation of patronage sourcing for the Hotel. income and tight control on Wema Bank PLC, First Bank expenditure improved the Plc, AfriBank Plc, UAC, Coca- profitability and cash flow Cola, UNICEF and a host of position of the Hotel. By others patronized the hotel as a December 1998, the Hotel's result. Lafia Hotel, Apata, bank balance was Ibadan, on the other hand, N120,000.00. Increase in experienced good fortunes as the occupancy rate, which hotel began recording 100% engendered an increase in occupancy rate brought about by the bank balance in the General refurbishing of facilities, accounts of the Hotel. These improved attitude to work by feats were made by: workers b) The refurbishment of the 8. Wemabod Estates Limited Monarchical Suite to a very a) The Company's revenue high standard and re- increased substantially from carpeting of floors. The N1million to N14.5 million Monarchical Suite Lodge in the first year of reform, as rate was increased from a result of the introduction N15,000.00 to N40,000.00 of commercial rates by the per night and this enjoyed Board in the letting of good patronage. Also, a properties. Rent payable on lively and courteous all properties were reviewed treatment of customers by upwards in line with the the staff of the Hotel created going rates in the respective a warm customer service, neighbourhoods. This had a which is central to success salutary effect on the in the hospitality industry. Company's financial 7. Western Hotels Limited: The two position. The bank balance hotels owned by Western Hotels as at the end of February Limited – Premier Hotel, Mokola 1998 was N45 million. and Lafia Hotel, Apata. In line Inventory of properties was with Group patronage initiated taken while the Chairman by the Board, Askar Paint a and the Board had various subsidiary of OICL was meetings with tenants on the contracted to paint the Hotels and issue of improved rent leaking roofs were fixed at the payments. Also, three Premier Hotel, thereby leading to houses at Oba-Akran increased patronage as the bank Avenue were reclaimed for

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Odu’a, which had hitherto a) This is the first indigenous been lost. insurance company 9. Fisheries Services Company established in Nigeria. It Limited, Ijora, Lagos was moribund for some a) The Company recorded a years and the Company substantial increase in under the Chairmanship of turnover owing to the Jobi-Fele revived it through refurbishment of all cold a recapitalization exercise. rooms and basic facilities to Some capable hands and the effective operations of insurance experts were also the company. Ice-block transferred to the Company. making machines were also Chief Rufus Orimoloye, refurbished, which was former Managing Director central to the operations of of Great Nigeria Insurance the company. The premises Company Limited was of the company was also transferred to NGI to floored with concrete for salvage the Company. convenience. 13. Re-acquisition of a majority 10. Odu’a Printing Company interest in Cocoa Industries Limited Limited, Ikeja: OICL regained a) The Chairman and the control of CIL after an amicable Board of Directors settlement with Emerald facilitated a Petroleum Trust Packaging Limited. Odu'a Fund printing contract to the regained 70% equity of CIL as tune of N60 million for the against the former 40% while the company, which was largely other party, Emerald Packaging idle at the time. Limited owned 30% instead of 11. Caxton Press (WA) Limited, the former 60%. N65 million was Ibadan also paid to NDIC with respect to a) The Company began to the repossession. record modest success 14. Epe Plywood Industries Limited: occasioned by the The contentious matter of the refurbishment of the 2- purported equitable interest of Colour printing machine – Dannet Holdings Limited and Sord Z machine. The Epe Plywood Industries Limited company also broke into a was settled by the Jobi-Fele new product line in the Board. Odu'a fully paid the stationery market. This indebtedness of N9 million owed improved the Company's by Epe Plywood to Dannet income from N20,000.00 a Holdings Ltd. After the month to N250,000.00 a settlement, the company began month from July-December skeletal operations, therefore had 1997. the ability to pay salaries. By 12. Nigeria General Insurance Plc February 1998, the Company had

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a bank balance of N1.2 million as members of staff commenced against the indebtedness of over sitting in December 1997. The N20 million in January 1997. panel recovered a number of 15. Phoenix Motors Limited, Ikeja: assets for the Company The Group Patronage policy was a. The Board through the panel used as a strategy to launch the recovered the sum of 7.477 hitherto moribund company back million naira from one Mr to profitable operations. It was Odubogun, the receiver made mandatory for all Manager to Vegetable Oils subsidiaries based in Lagos to (Nig.) Plc, who had repair their vehicles in Phoenix tenaciously held on to the and patronize other services money for the past two offered by the Company. years. 16. Vegetable Oil Nig. Ltd, Ojota: b. The Panel gave decisions in With respect to the lease of the favour of Odu’a and against plant and machinery of VON to three employees of the Senator by the Company – Messrs M O erstwhile Manager of VON, the Okeyale, Y A Aderibigbe Board took the following steps: and S A Lawal. They a. Half of the land leased to refunded a total of him was repossessed by N1,143,000.00 (One OICL. million, one hundred and b. The leasehold on the portion forty-three thousand naira occupied by him was only) to Odu’a. reviewed and rent of N6 c. Similarly, the panel directed million was charged per Alhaja F Aruna and Engr annum Oduola should refund c. The lease period was also N1.135 million and reduced to five years from N486,854 respectively being the initial lease of 20 years the difference between the granted to him. actual value of the shoddy 17. Repayment of debt owed to painting job done at Lagos Wema Bank Plc: The huge Airport Hotel Limited and indebtedness of N140 million the amount collected from owed by OICl to Wema Bank Plc the Company. was fully repaid. In doing that, d. In addition, Prince Araoye, a the Board was able to recover former Nominee Director of from Wema Bank Plc a N7 the Nigerian General billion investment in WAPCO Insurance Company used as collateral for the loan. Limited, and Mr Oyeleke 18. Recovery of embezzled money Afolabi, an Estate Agent through the assets recovery have been ordered by the panel: The Assets Recovery Panel to refund N65,000.00 Panel set up to try erring (sixty-five thousand Naira

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only) and N175,000.00 (One from the property, the total hundred and seventy-five revenue was raised to N4.6 thousand naira only) million. respectively to OICL. 21. Improved supervision of 19. Although National Bank was associated companies: Improved eventually reacquired in 1999, supervision and information flow outside the scope of this chapter from associated companies were and Jobi-Fele Board, efforts to put in place by the Jobi-Fele reacquire the Bank was made Board of OICL. Odu'a Nominee possible by the Jobi-Fele Board. Directors on the Board of these In a preemptive move to stop the companies were briefed about the further sales of National Bank new direction that was drawn up Nigeria's Assets, OICL took the by the Group and the for utmost interim Board of NBN, the loyalty from them. Central Bank of Nigeria (CBN) a. Nigerite Limited Ikeja: and the Nigeria Deposit and The activities of the Insurance Corporation (NDIC) to Company was under court. OICL sought an intense watch by the interlocutory injunction to Board. The Managing restrain the respondents from Director of the Company selling the Bank's assets pending was invited by the the determination of the Chairman of OICL several substantive suit filed in the times to dialogue on the Federal High Court. The Oyo need for OICL to State and High Court participate in the had respectively issued an Executive Management of interim restraining order for the the Company. The Board respondents to halt the further negotiated for at least the sale of NBN assets. position of the Executive 20. Payment of economic rent on Director of Finance to be property occupied by Guinness ceded to OICL. A lopsided Nigeria Plc.: Guinness Nigeria arrangement in favour of was made to pay an additional Etex Group – OICL N1.8 million to Wemabod partner in the venture in Estates Ltd. This is in respect to the allocation of board the sub-lease granted to Guinness seats was also addressed on 31, Aromire Street and 16, by the Jobi-Fele Board. In Ashogbon and Alli Balogun line with the Boards Street all at Ikeja. The rent on the determination to keep sub-lease had earlier been fixed proper checks on all at N2.8 million which was paid investments and assets of by Guinness Nigeria Plc. With OICL, the Board the additional payment of N1.8 instructed OICL’s million total revenue derived solicitors to write Nigerite

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to void decisions taken at The remaining one of Nigerite’s Board shareholders were left with meetings. The conflict 26% arose when the expatriate 22. The declaration of N150 million Managing Director, a dividend to the owner states for nominee of Etex Group, the year 1997. This was rejected OICL’s request to unprecedented in the history of 64 allow one of its Nominee dividends payment of the Directors to act as company as each owner state got Chairman for the meeting N30 million each. in the absence of OICL 23. Assistance to tertiary institutions: nominated Chairman. The Assistance was extended to five Managing Director refused tertiary institutions in the owner and insisted on being the states as follows: Chairman for the meeting a. N5 million to The in total disregard for the Polythenic Ibadan for the Company’s Memorandum construction of Odu’a and Articles of Lecture Theatre. Association. b. N5 million to Osun State b. NIPOL Limited – Poly, Esa-Oke, Osun State participation by Vitafoam for the construction of Plc.: In order to boost the Odu’a Mass dwindling fortunes of Communication Theatre. NIPOL Limited, Apata- c. Ogun State University, Ganga, Ibadan, an now Olabisi Onabanjo associated company of University, Ago Iwoye, Odu'a, an arrangement was got N4.5 million for the set in motion for Vitafoam construction of Odu’a Limited to participate in Lecture Theatre. the equity and d. Ondo State University, management of the Ado Ekiti got N4 million company. It was conceived for the construction of that Vitafoam will bring Odu'a Lecture Theatre. into NIPOL, the much- 24. The retrieval of the shoe factory needed fund and at Oshogbo (Odu’a, 1998a). international expertise, The Military Administrators of which will impact the owner States commended the positively on the financial Board at a meeting held in performance of the Ibadan on 19 March 1998, seeing company. When the the turnaround that had occurred arrangement was in most of the subsidiaries and concluded, OICL had 23% how they had started seeing of NIPOL's equity, while improvements in the profit Vitafoam possessed 51%. margin of OICL. The Military

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Administrator of Ondo State, stakeholders in such banks, so as to Navy Commander Anthony Ibe ensure effective management. It was Onyearugbulem gave the also during the period that Wema commendation on behalf of his Bank acquired National Bank of colleagues in Oyo, Ogun, Osun Nigeria following a recapitalization and Ekiti states while reading the exercise. Wema Bank Plc was granted communique jointly signed by a Universal Banking License in the five Military Administrators February 2001. Wema Bank is a large (Odu’a 1998b, 1). Also, the financial services provider that has Executive Director (Operations) been in the banking business of the African Newspapers of continuously for the past 65 years. It Nigeria Plc, publishers of The is the oldest indigenous commercial Tribune – Mr Fola Olamiti, bank in Nigeria. Ownership of the described the turn-around of bank are as follows: SW8 Investment OICL at the time as "stupendous" Limited 31.3%; OICL 9.47%; and (Odu’a 1998c, 8). Private Investors 59% (Wema, 2018).

Wema Bank Wema Bank is perhaps the only leg The corruption in OICL subsidiaries standing of all those banks inspired by is most visible in Wema Bank and the nationalist fervour of its era during the bank would be a pointer to what the colonial period. All the others have experiences in other subsidiaries of either failed or acquired by other OICL must be like. Wema Bank banks. Ironically, during the 2005 automatically became a part of the banking sector consolidation, it Western State Government’s acquired National Bank which investment under the WSIICC and hitherto was the only surviving one subsequently a wholly owned that pre-dated it. Wema Bank was one subsidiary of OICL in 1976. Wema of the banks that responded early Bank was incorporated in May 1945 enough to the Central Bank's call for as a private limited liability company recapitalisation in the banking and commenced business operations industry. During the 2004/2005 as a commercial bank in the same financial year, it offered some 5 year. Wema Bank was converted to a billion ordinary shares to the public public limited liability company in for subscription at a price of N3.50 1987. In 1990, the bank was listed on per share. The offer received the Nigeria Stock Exchange. Hence, substantial support such that about Wema Bank moved from being a 4.75 billion shares were subscribed subsidiary of OICL to being an and paid for. This boosted associated company, with OICL shareholders fund to N24.26 billion owning 40 per cent equity. The Bank by March 31, 2005, from N8.04 eventually became a minor asset to billion prior to the exercise. This has OICL in 2005 following Central Bank further increased to N26.23 billion as of Nigeria's directive for government- at the end of the 2006 financial year owned banks to divest, resulting in (Wema, 2011). owner states becoming minor

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Widely reputed as the longest cent by selling its shares to high net surviving and most resilient worth Yoruba individuals who came indigenous Nigerian bank, Wema together under a group called the SW8 Bank Plc has over the years, diligently to take majority equity in the bank offered a fully-fledged range of value- (Wema, 2011). The bank is ranked adding banking and financial advisory lowest amongst the newly services to the Nigerian public. In recapitalized banks in Nigeria due to 2006, the then Group Managing sharp practices affecting its Director of the Odu’a Investment, Mr accounting procedures. Sahara Adebayo Jimoh, announced that Reporters investigated the bank in Wema Bank Plc realised a profit 2007, the investigative journalism before tax of N6 billion between outfit found out that the 2005 March and December 2006 that recapitalization of the Bank was made towers ahead of what the whole of the possible because it is the major banker subsidiary of OICL made in that year. to President Obasanjo's multi-billion- Following the impressive profit dollar company (Obasanjo Holdings recorded in 2006, the bank was Limited), which was based in enmeshed in a series of corruption- Abeokuta, Ogun State. The then related cases the following year. minister of the Federal Capital Adebisi Omoyeni, the Group Territory (FCT) Mallam Nasir El- Managing Director of Wema Bank, in Rufai, publicly claimed that President July 2007 was suspended from office Obasanjo borrowed N2 billion to by the Central Bank of Nigeria, for revive his ailing Otta Farm (Sahara alleged financial irregularities Reporters, 2007). involving him. He was suspended in The online news platform fingered Mr January 2008, having been accused of Tunde Lemo as the major culprit approving N450 million housing loan responsible for the crisis that the bank for himself and increasing his housing faced in the first decade of the twenty- loan by 100 per cent. Such actions first century, as it was discovered that were considered inimical to a Mr Lemo gave out credit facilities of company that was said to be neck over 16 billion naira (Sahara deep in debt. But Omoyeni denied Reporters, 2007). The figure seems doing any wrong and claimed that he bloated as it doubles the figure was a victim of power play, contained in Mr Adebisi Omoyeni’s masterminded by Mr Tunde Lemo, petition to the then CBN Governor, who was CBN Deputy Governor at Lamido Sanusi; “as at the time Lemo the time and who once served as was leading the Bank into debt of N8, Wema Bank's Chief Executive 125,011,003 non-performing credit Officer. He accused the former Wema (CBN, 2009). Sahara Reporters' Bank's helmsman of incurring over investigations also revealed that these N12 billion debt as at December 2007 credits were granted in breach of the (Ayankola, 2008, 27). bank's internal rules as the majority of OICL divested its equity of about 47 the loans might have been granted per cent from Wema bank to 10 per without collaterals, therefore making

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 their recovery impossible. The loans to buy over the bank was also were approved and disbursed three received on Friday, January 5, 2007 – months before Mr Lemo left for his a difference of 30 minutes which new position at the CBN in 2004 and betrays a conniving coincidence before they were presented to the (Sahara Reporters, 2007). Board of Directors of the bank for Sahara Reporters (SR) also learnt that approval. there were cases of financial The individual largely manipulations and falsification of responsible for the current scam records by Mr Lemo when he was the is none other than a current Managing Director of Wema Bank Deputy Director of the Central Plc. Sahara Reporters quoted a bank Bank of Nigeria, Tunde Lemo source: “He always purchased who used to be Wema Bank’s Managing Director before he was cheques and pays it into customer’s elevated by President Obasanjo account to deceive the CBN and as a reward for a N2 billion loan Nigeria Deposit Insurance said to have been arranged for Corporation (NDIC) that the President Obasanjo’s businesses payments were actually made by the without collateral security customers”. Interestingly, Sahara (Sahara Reporters, 2007). Reporters obtained copies of some Owing to the massive fraud that had cheques that Mr Lemo purchased with rocked Wema Bank, the bank could Wema Bank Plc’s money and are not hold its Annual General Meeting available at the E-Library of Sahara for 2 years (2004/2005) following Reporters. In a particular instance, CBN's non-approval of its account, Wema Bank under Tunde Lemo made owing to the huge debt in the books of N891million profit in 2002/2003 but the account of Wema Bank (Sahara through the manipulation of financial Reporters, 2007). records, the bank declared over Sahara Reporters (SR) accused Mr N3billion in profit (Sahara Reports, Lemo of wanting to buy Wema Bank, 2007). in connivance with Otunba Subomi While Mr Tunde Lemo was not tried Balogun (the owner of First City and convicted by a competent law Monument Bank). In a bid to achieve court, all the allegations remain an this SR claimed that Mr Tunde Lemo accusation until proven otherwise by a altered the examination report of the law court. However, one question bank and sent a copy to OICL's Board begs for an answer in all of these; why - the core investor in Wema bank. The and how did Mr Lemo become a examination report was doctored as Deputy Governor of the Central Bank was claimed to show Wema Bank as of Nigeria from 2004 up until 2014 underperforming, so as to sell the with all these illegalities recorded bank shares cheaper than it should be against him while he was the MD of sold. The examination report was Wema Bank? dispatched to OICL in Ibadan and was In 2010, a human right activist and received on Friday, 5 January 2007, Lead Counsel appointed by the Board while Otunba Subomi Balogun's letter and Management of Wema Bank Plc

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Abimbola Oyarinu CUJPIA (2019) 7(1) 48-75 in June 2006, Dr Paul Obianaso came disclosed to the Governors of the out publicly to accuse the SW8 of owner states because of the thievery fraud. He claimed that the SW8 did impression that the board have about not inject any new fund into Wema them (Orebe, 2007). Mr Femi Orebe, Bank Plc but rather bought OICL's a journalist, who was close to Prince shares in the bank with a Skye Bank Julius Adelusi-Adeluyi was equally Guarantee. He revealed that SW8 sceptical of the appointment of Prince Investment Limited used First Bank Adelusi-Adeluyi as Chairman of money kept in Skye Bank as a OICL Board in 2005 since the fraud guarantee to illegally acquire Wema perpetrated in Wema Bank was still Bank. He further claimed that the fresh. He claimed to have warned SW8 was incorporated with just a Prince Adelusi-Adeluyi that the share capital of N10m on August 28, "politicians would be quick to pick a 2008 (Sahara Reporters, 2010). fall guy to cover up their crimes", of A number of OICL owner state which Prince Adelusi-Adeluyi governors were accused of being co- responded, "I would be careful" conspirators in the ploy to usurp a (Orebe 2018). common patrimony. Otunba Gbenga Dr Obianaso also mentioned other Daniel, and real owners of SW8 Investment , former Governors Limited using Oloketuyi and cohorts of Ogun, Osun and Ondo States as fronts to include: Chief Samuel respectively, were accused of being Bolarinwa, the former Chairman of part owners of the SW8. Otunba Wema Bank, Chief Samuel Adegbite, is a major shareholder former MD of Wema Bank and Mr in Skye Bank following the merger of Oba Otudeko, the current Chairman of his erstwhile Bond Bank with other First Bank Plc. Otudeko is also a banks, which formed Skye Bank. This major shareholder in Skye Bank links the Skye Bank Guarantee with following the merger of Cooperative the SW8. Also, the GMD that took Bank, which he owned with other over Wema Bank Plc after Mr banks to form Skye Bank. Others are Omoyeni was dismissed, was Mr Mr Tunde Lemo, former MD of Segun Oloketuyi, who was until then Wema Bank and former Deputy an Executive Director in Skye Bank Governor of CBN and Professor (Sahara Reporters, 2010). If you Charles Soludo (Sahara Reporters, would recall in Chapter Five of this 2010). thesis, the Board under Prince Julius Within the first decade of the twenty- Adelusi-Adeluyi failed to disclose first century, the bank tumbled from a company progress in order to shield bank that was one of the top the prying eyes of the Governors from performers in the industry and the success in the Conglomerate. The delight of shareholders, to an revitalization of companies like Askar endangered species following series Paints, Nigerian Wire and Cable and of board/management squabbles, the Odu’a Printing Co. Ltd, which had which severely impacted its since resumed operations but was not performance and public confidence.

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But from 2009, a new core investor Conclusion took over the bank and appointed new It is disturbing to process the events management with the mandate to that saw a once thriving public rescue the bank and return it to glory. enterprise that powered the economy Upon assumption of office on 10 June of the southwest for development to 2009, the new management rolled out crumble at the feet of corruption. a three-phase transformation plan While some have argued that designed to restore public confidence “corruption is a significant obstacle to and profitability. The first phase was business in Nigeria,” (GAN, 2011) it to stabilise the bank, the second phase is self-evident that the structure of was to prepare it for growth, while the public enterprises, lack of corporate third stage was to go for growth. The governance and absence of Agency bank opted for a regional banking that has made Nigeria's public status under the new banking regime, enterprises a haven for corruption. which implies that the bank will now The same people who performed operate within the South-West, South- excellently in private establishments South zones and the Federal Capital come into public enterprises and grow Territory (Komolafe, 2011, 21). fleecing fingers.

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