Jimoh Ibrahim

The marriage between businessman Jimoh Ibrahim and founding directors of Newswatch news magazine, consumated in May last year when Ibrahim bought 51 percent equity in the publication, cracked last week following the suspension of the publication of the magazine by Ibrahim, the new chairman, and the protest by the founding directors  who had sold the equity, Raheem Akingbolu reports

How it all started...

After 27 years of running Newswatch, the weekly news magazine co-founded in 1984 by the late Dele Giwa and the trio of Ray Ekpu, Dan Agbese, and Yakubu Mohammed, the three remaining directors in May last year  sold the weekly news magazine  to billionaire business man, Jimoh Ibrahim, allegedly for N1billion, though sources say the actual cost is only known by the founding directors and the business mogul. The deal saw Ibrahim having 51 per cent shares in the outfit while the former directors retaining the remaining 49 percent of the equity. The business was sealed on Thursday May 5, 2011 at the Oregun Lagos office of Newswatch with the signing of the Share Purchase Agreement (SPA) between the two parties. For many stakeholders in the company, especially the staff, who saw the development as a clear move to reposition and reinvigorate the dying magazine, it was cheering news. The hope was high that the messiah had eventually come, considering the sorry state of the once-cherished brand at the time the businessman came in.

Again, the high profile of the new chairman, who also has his hands in many juicy businesses including NICON Insurance Plc and National Mirror newspaper encouraged the stakeholders. Under the new arrangement, THISDAY gathered that Ibrahim agreed to settle all the salary arrears to staff, which the former management of Newswatch owed before his acquisition. Speaking after the deal, the new board chairman described his mission at Newswatch as “a turn-around effort”, saying the new management of the media house would not tamper with the editorial style and composition of the magazine. Rather, he said the management would concentrate on the managerial aspect of the company to ensure that the vision of the founding fathers survives. Among other promises, the new owner said the management had resolved that all the employees of Newswatch magazine would commence a training and orientation programme to upgrade and refresh their knowledge to conform to the realities and aspirations of the new management. To demonstrate his readiness to change the fortune of the company, he immediately directed all employees of the magazine to report at NICON Hotel and Suites to partake in the orientation course for effective capacity building. He also promised to inject cash into the magazine to take care of the outstanding salary arrears as well as to offset the debt incurred by the company.

Suspension of Publication…
One year after, Ibrahim suspended further publication and circulation of the magazine from the newsstands, saying the product required a total overhaul. Before the announcement, the staff of the company had begun to complain about Mr. Ibrahim’s managerial style, irregular and non-payment of salaries. THISDAY, however, gathered that the new chairman inherited eight months outstanding salaries and liabilities of over N500 million. He was said to have cleared all the outstanding salaries and paid up to April, meaning he is owning the staff four months.

But with the announcement of the suspension of publication, Ibrahim seemed to have stirred the hornet nest as the founding owners immediately faulted the decision. They said Ibrahim’s decision was shocking, stating that they were not duly consulted and carried along in the process.  The chairman said his decision to suspend the magazine had been approved by 51 party shareholders of the company.”The decision is taken to reposition the magazine and make it relevant to modern development, and as such, the magazine is due for corporate surgery. The remains of the magazine will now operate from 159-161 Broad Street, Marina, Lagos to enable us overhaul and reconstruct the old office,” he said in his terse statement.

He added: “The new office is equipped with modern day technology (including computers and ipads) and standard furniture. But regrettably, it will not house incompetent staff. Any staff that is not in agreement with the latest development is directed to collect any outstanding salaries from the accounts department immediately.”
“The National Mirror went through this similar template of rebirth from the old National Mirror to the new National Mirror, which is now competing favourably with its peers. I commend the publishers of The News magazine for operating in a modern office with new technology, while I also see the TELL magazine’s facelift and rebranding as unprecedented in the history of Nigerian journalism.”

Ekpu, Agbese, Mohammed Peeved…

Ray Ekpu, Dan Agbese, Yakubu Mohammed and Soji Akinrinade are, however, angry at Ibrahim’s action. Addressing a press conference on Thursday, they expressed the fear that Ibrahim’s action was tantamount to outright ownership and possibly a step to close the company. Ekpu who spoke on their behalf said: “We, and the other eight investors in the company who together hold 49 per cent equity were greatly shocked to learn of the major decision affecting the future of the company and its loyal staff who have remained committed to the company through the most trying times, in the press. You are, no doubt, aware that on  August 6, 2012, the chairman of the board of directors of the company, Mr. Jimoh Ibrahim, announced an indefinite suspension of publication of the magazine.

“He (Jimoh  Ibrahim) said that the decision is taken to reposition the magazine and make it relevant to modern development, and as such, the magazine is due for corporate surgery.”

According to Ekpu, “the decision came to us, as indeed to millions of Nigeria, as a big shock. Newswatch  has faithfully kept faith with its readers and the Nigerian public since its debut as the pioneer weekly news magazines in the country on February 28, 1985. In all of that time, through good and bad times, except for its proscription for six months by the Babangida administration, the magazine has hit the newsstand  every Monday.”

Continuing, Ekpu said, “Decisions as weighty as these are matters for the board of directors of the company. Mr. Ibrahim has, ironically, told the world that the 51 shareholders approved these decisions. We are more than baffled by this, and our worries are that since he took over, the company has not moved from where we left it.

“We are astonished that after nearly 15 months, Mr. Jimoh Ibrahim is now talking about “corporate surgery”. What happened to the turn around, which was to have been completed within one year by the new management? What has, therefore, led to the deterioration of  the company since May 5, 2011 that the NUJ Newswatch chapel now says no value has been added to the company and that the staff are owed four months’ salary?”

I Own 89 Percent, Says Ibrahim

But Ibrahim told THISDAY in an interview yesterday that he had read what Ray, Dan, Yakubu and Soji said about the management of Newswatch and would deal with their cases by next week  He, however, said:  “Let it be on record that they are minority shareholders in the company. Ray has just two percent; Dan holds half percent; Yakubu has one percent while Soji holds half percent. They have exchanged their previous shares for cash. They have been fully paid off. I paid Ray N79 million; Dan and Yakubu collected N76 million each while Soji was paid N68 million. Going by the sales agreement, shares of the company amounting to 89 percent belong to me. I own 89 percent of the shares that were unsubscribed after the shares restructuring.I own 89 percent of Newswatch. When we took over, they were owing staff eight months unpaid salaries. We cleared everything. They should be happy with this.

“Now, the restructuring of the company is still on-going. Part of it, is to pull down the Oregun premises and rebuild it into a world class complex with a printing press. That was why we are moving the staff to Energy House. We are turn-around experts and we will successfully complete the process. The situation at Newswatch Magazine is very bad. They generate less than N1 million monthly and spends about N3.5million weekly for production and another N5 million monthly for salaries. We have invested N510 million into the company. The magazine has not generated N20 million in the last 15 months.

The company has over N1 billion liability when we took over. The only asset it has is the premises in Oregun. Another problem with the company is that majority of the staff are very old people. We discovered that they have lost touch with modern journalism. Most of them can’t use modern journalism tools. We need to sack about 60 percent of the work force there. Most of them will be exposed when we move them to the headquarters. That is why they are afraid of moving to Energy House”.

Crucial Questions

Ekpu, and other directors who were said to have been bought out by Ibrahim are threatening fire and brimstone, but the million-dollar question is what can they do now to ensure, as they put it, that their dream does not go down the drain? Can they reclaim the equity, whether 51 percent as they claimed or 89 as Ibrahim claimed, already acquired by the businessman? How would they undo the sale already backed by legal documents?. Indeed, the battle lines appeares drawn between the founding directors and the new owner. But what becomes of the Newswatch and its staff in the process is within the realm of conjecture..