Stakeholders and staff of the Odu’a Group of Companies Limited are weighing the implications of the apparent power tussle rocking it ahead of the quarterly meeting of the South-West governors, owner states of the company, scheduled for tomorrow in Abeokuta, Ogun State.
Locked in the protracted power tussle are the immediate past chairman of the conglomerate’s board, Chief Isaac Akintade and the Group Managing Director (GMD), Mr. Adewale Raji.
The deterioration in the relationship between the duo blew into the open when a petition to the six South West governors by the former chairman accusing the GMD of serially violating corporate governance rules and undermining the board was published as a newspaper advertorial last Wednesday, April 19.
Akintade, who signed the advertorial as Chairman, Odu’a Investment Company Limited, claimed that he had not been formally informed of his removal by the Ondo State government, whose nominee he has been on the Board since 2009 when he was appointed by the Mimiko Administration.
He said the GMD unilaterally issued him a letter relieving him of his position as Director and Chairman of the Board and copied the Ondo State government contrary to standard corporate practice and thereby exercising powers he did not legally possess.
He also accused the GMD of illegally appointing the Director from his home state, Ogun, Alhaji Tajudeen Bello, as the Acting Chairman of Odu’a Investment Company Ltd to preside over the board meeting of Thursday, March 23, 2017, with the purpose of securing approval for some controversial expenditure by the management that he would have queried.
He contended that his appointment is tenured and thus cannot be affected by Governor Olurotimi Akeredolu’s recent dissolution of boards of parastatals and ministries.
He said his own tenure legally expires in December 2017.
However, The Nation gathered that the new administration in Ondo State named replacement directors for its nominees in companies of the Odu’a group on March 27, 2017, with Chief Segun Ojo picked as its new Director for Odu’a Investment Company Ltd.
Ojo, who has a mandate to “complete the Chairmanship slot of Ondo State up to November 2017 and to subsequently continue as Director,” has since met formally with the Executive Management.
The procedure for the appointment or removal of owner state nominee directors, according to a source who sought anonymity because he is not authorized to speak on the matter, is for nominee directors to Odu’a Investment and subsidiaries to be made through a letter by the Secretary to the State Government (SSG) to the GMD of Odu’a who has the responsibility of formalizing such through correspondence with the nominee.
On the issue of tenure, the source said: “The appointment letter issued to each director states that it is for four years and it is categorical that their appointment can be determined by their principal prior to the expiration date.”
The source dismissed the allegation that the GMD acted illegally by appointing the Director representing his state as Acting Chairman to preside over a board meeting in Chief Akintade’s absence.
His words: “That is totally false. The members of the board actually unanimously decided that the most senior Director in terms of date of appointment should preside in accordance with the advice of the Secretary to the board”.
Investigations by The Nation revealed that the resistance of the GMD to alleged attempt to usurp the functions and powers of the Chief Executive by the erstwhile Chairman of the board, which had been the practice in the past to the detriment of the organization, is at the root of the crisis.
In particular, The Nation learnt that the relationship between Akintade and Raji degenerated because of the latter’s strong opposition to the leasing of the Lagos Airport Hotel, one of Odu’a’s subsidiaries, to Akintade’s preferred bidder early in 2015.
While agreeing that the hotel has been badly managed over the years especially between 2009 and 2013 with its revenue remaining stagnant at around N1.1 billion annually and profits declining from N90 million to N14 million in 2013, the GMD reportedly insisted that the particular bidder with a turnover of N112 million and N80 million respectively for 2012 and 2013 and a loss of N43 million and N17 million for the same period lacked the pedigree and capacity to manage an operation like Lagos Airport Hotel.
Since Raji’s assumption of office, the South West governors have been widely commended by stakeholders for insisting that the executive management must operate professionally without the kind of partisan intervention largely responsible for the conglomerate’s setbacks in the past; a stance responsible for the successes recorded during his tenure so far.
Consequently, since the current GMD came on board in June 2014, no subsidiary in the group has closed down unlike the situation before, which saw Cocoa Industries Limited shut down in 2010; Nigeria Wire and Cable, Ibadan, as well as Epe Plywood Industries closed in 2012 and Askar Paints Ltd, Ibadan, suffering the same fate in 2013.
The company’s Profit Before Tax rose from N378 million in 2013 to N597 million by year end 2015 while the result for 2016 is still being audited.
Consequently it was able to pay dividend of N167 million and N194 million to the company’s shareholders in 2015 and 2016 respectively for the first time in six years.