Dr. Jimoh Ibrahim
The dispute over the suspension of Newswatch magazine involving its new chairman/majority shareholder, Dr. Jimoh Ibrahim, and the magazine’s minority shareholders - Ray Ekpu, Dan Agbese, Yakubu Mohammed and Soji Akinrinade – took a turn for the worse on August 21 when Ibrahim “removed” the four men from the board of Newswatch. But the directors say the billionaire businessman’s action is an “illegality and a unilateral one” because there was no board approval for it. For Ekpu, Agbese, Mohammed and Akinrinade, all they are asking from Ibrahim is for the magazine to be published “week after week, just as we did for over 27 years.” But Ibrahim says Newswatch will remain rested for now, in order to “conclude the final stage of its turnaround and ultimate surgery and will soon return bigger and better.” He also said the aggrieved directors remain “sacked,” an action Ekpu says is a huge joke. Yemi Adebowale reports
Dr. Jimoh Ibrahim, the new chairman/majority shareholder of Newswatch Communications Limited, publishers of Newswatch magazine and the firm’s minority shareholders - Ray Ekpu, Dan Agbese, Yakubu Mohammed and Soji Akinrinade – are still at daggers drawn. This is because Newswatch magazine is still not on newsstands as demanded by the aggrieved directors. The businessman has also announced the “removal” of the four aggrieved shareholders from the board. Ibrahim, in a statement, explained that the removal of the directors was in conformity with the Share Purchase Agreement (SPA) signed by them, which requires them to have a certain percentage of shares in the company to be on the board. The total percentage of shares being held by them, according to Ibrahim, is 6.1% of the total shares of the company. Ibrahim said this “has not met the requirement of the Companies and Allied Matters Act, and that of the SPA, for holding a seat on the board.”
According to the businessman, an aspiring director of the company is required to have a minimum of 10% shares in the company. Ibrahim said the men by the signed SPA knew what was required of them. But the aggrieved directors say Ibrahim lacked the power to remove them and that they would not allow him to continue to “breach the terms of the SPA.” Ekpu in an interview with THISDAY last week Tuesday said their “removal” from the Newswatch board “is a misinterpretation of the power of the majority in a board. The lawyers will tell you that the strength of the majority shareholder lies in the voting at board meetings. It does not lie in one man sitting in his office or in his house and saying that he has the power to sack board members. He does not. You can cross check from lawyers.
“So, he (Ibrahim) owns what in the company? Let me tell you how the whole thing was arranged when we got into this relationship with him. He said four of us should sit on the board representing the 49% shareholders and he will bring six people. But we said we would rather have five people, because we would like our immediate-past chairman, Alex Akinyele, on the board. He agreed and said he would bring seven people. So, it was a 12-man board. So, all these issue of what he now has is news to us, because since then, nothing has been done about the shares structure since May 5, 2011.”
Earlier last week, the business mogul spoke to THISDAY on some of the issues raised by the aggrieved shareholders in an earlier interview. The aggrieved directors also replied to all the latest issues raised by the Newswatch chairman.
On the issue of his ownership of 89% of Newswatch, Ibrahim said: “I think the major problem is that they (the aggrieved directors) are not educated in business matters and this is very embarrassing. Okay, let’s take it that I have 51 per cent of the shares; that is a majority. Either here or at the Supreme Court or anywhere in the world, 51 is higher than 49. The four of them, what they have combined is 6.1 per cent. The next question you will then ask is: who is the owner of the unsubscribed shares? When you have unsubscribed shares, who is the owner? The company. Then who is the owner of the company? I am the one.”
But Agbese disagrees. He told THISDAY: “At what point did he (Ibrahim) find this out? At what point did he find out that we have unsubscribed shares? Has a decision been taken to sell the unsubscribed shares? Has he bought them? For him to own the unsubscribed shares, then the shares must be offered and the shares must be bought. Did he tell you that the shares have been offered to him and that he has bought them? We are not aware that there are unsubscribed shares of the company. Newswatch Communications Limited has no unsubscribed shares.”
On the alleged failure of Ibrahim to inject fresh N500 funds into Newswatch, three months after its take-over, the new chairman said: “The N500 million fresh fund they are talking about is for injection over the next two years; to commence 30 days after the sales. And there is a clause in the SPA that says that this is voluntary. This has nothing to do with the 51 per cent already purchased. And if I capitalise the extra funds I have put into the company, what happens to the other shareholders? What will be their shares? Zero. So, they will eventually have no shares in the company.
“I am supposed to inject the N500 million for things like equipment and machinery. It is not yet two years that we took over the company and we have started putting in the fresh funds. May be you needed to understand that we bought new computers and we have changed the office. We have paid huge outstanding salaries and debts. We paid creditors like Academy Press. We are about to pay outstanding salaries of about N30 million to the staff.
This is not Newswatch’s money but part of the N500 million fresh funds. Almost N300 million fresh money has been spent. All of this money will now be calculated at the end of two years and capitalised. They (Ray and the others) will have no shares again after this.” Ibrahim added that the next board meeting of Newswatch would hold at Igbotako, Ondo State and that the issue of capitalising the fresh funds will be discussed there.
But Mohammed disagrees: “How much have we spent in the last 27 years to run the company, for him to now say that he has spent about N300 million as running cost in the last 15 months? He can tell this kind of stories to people who don’t know how companies are run. We know that our salaries were about N4 million monthly. Our printing cost plus salaries were not more than N6 million monthly. We were owing Academy Press only about N8 million when we left. We don’t know how he spent this huge amount he has been talking about. The truth is that he has not finished paying for his 51% shares.”
On the new account opened for Newswatch at Mainstreet Bank, Ibrahim said: “They (aggrieved directors) are shedding crocodile tears. Where did the money paid to them come from? It came from that account. The old accounts were in red when we took over. If we pay the N510 million straight to the old accounts, the banks will take a huge chunk to cover their loans. We opened a new account in the name of the company; not in the name of Jimoh Ibrahim. Thereafter, the money was injected into that account. And then, they were paid from that account. They ate from the proceeds of that account. And they have left, so they cannot be there again.”
But Mohammed disagrees. He said the process of opening a new account for the company was not transparent and that it had no board approval. “Ibrahim and one of his staff at Global Fleet were the only signatories to the account.”
On the N150 million allegedly diverted from the account, Ibrahim said companies in the group move money around to help each other and “that was what happened.” He said “some other divisions of the group were also putting money into Newswatch for its running cost and that the other members of the group will still be doing this while the reorganisation continues. This case of N150 million, he said, was actually a refund to NICON investment for money spent on behalf of Newswatch before the release of N510million.
But Mohammed countered this, saying, “That is not how a limited liability company is run. Newswatch is not a subsidiary of any of his companies. It is not a member of Global Fleet Group. Money cannot move fromNewswatch to any of his companies. Newswatch has its headquarters on No. 3 Billings Way. He invested in that company. It does not make Newswatch a subsidiary of his company.
It will also be fraudulent to take money from one limited liability company to another limited liability company, more so, when the two are owned by different shareholders. We don’t have shares in Air Nigeria or NICON. So, why should he take money from Newswatch to any of his companies, without the board’s approval? I think it is fraudulent to take money from Newswatch’s account without the board’s approval. He is supposed to pay for his investment in Newswatch with the money. By taken it away, it means he has not finished paying for his shares in Newswatch. So, he has not finished paying for his 51% shares, to qualify for the position of core investor or majority shareholder. To have his eyes on the said unsubscribed shares does not even arise.”
Ibrahim also disputed reports that he promised to make Ekpu, Agbese, Mohammed and Akinrinade executive directors. He said according to the SPA, making them executive directors was at his discretion. Ibrahim said what he wanted to make them was “special assistants” to himself. He also disputed claims that he promised to provide offices for the four directors at group’s headquarters in Lagos. He said: “When did I take them round to show them offices?
How can that be their office? On gratuity for the former chairman, Chief Akinyele, Ibrahim said he never at anytime told them that he would pay the former minister any gratuity. Besides, he said such was not contained in the SPA. On the tax deducted from the gratuity to the four directors, Ibrahim said it was for the Lagos Inland Revenue Service. He added that “the records are there for them to verify.”
But Akinrinade countered Ibrahim’s argument: “He (Ibrahim) was the one who brought up the issue of Alex Akinyele. He said he needed to do something for him. He said there were two options. That he would either give him a jeep or N10 million. He said we should ask the chief the one he preferred and the chief said, ‘I have plenty of cars, give me the money.’ Nobody prompted him. He has been consistently bending the truth. He was also the one that brought up the issue of making us executive directors.”
Ekpu cut in at this point, saying: “In his own wisdom, Ibrahim decided that he would make each of us a group executive director of a much larger Newswatch family of companies. We were expected to assume our role on August 1, 2011 at the end of our three-month retirement leave.” He said Ibrahim’s statement to this effect was published in Newswatch and National Mirror of May 12, 2011 and May 6, 2011 respectively.
On the fate of Newswatch, Ibrahim said the magazine would soon return after the “surgery bigger and better.” He said it was simply rested for the second stage of the turnaround and restructuring and that the magazine will return as a world class publication. Ibrahim said a lot of money had gone down the drain at Newswatch magazine and that he could no longer allow that to continue. Already, he said plans were on to buy a press of over $1 million for the magazine. “Already, the staff members have moved into their new office at Energy House with world class facilities compared to where they are coming from where they can’t even pay for their basic amenities. Here, they are enjoying the best of facilities and are very happy. Outstanding salaries have been paid and we are repositioning the magazine.” The businessman said as a turnaround expert with a track record, Newswatch would return with a big surprise. He said he had never and would never be intimated by the challenges at Newswatch magazine. He said his aim was to sustain the dreams of late Dele Giwa, the founding editor-in- chief of the magazine.
But Ekpu insists Ibrahim should immediately resume the publication of the magazine. He said: “We are waiting for him (Ibrahim) to re-open the magazine and fulfill the terms of the agreement. We did not sell it to him, to shut it. We did not sell it to him to buy and bury or destroy it. We never buried it in 27 years. All these things he has been talking about – shares, money and the rest of the – are irrelevant. We are talking about legacy. In this company, somebody’s blood had been spilled. In this company, people have been dragged to jail several times. In this company, personal accounts have been frozen by various governments in the past. If you are coming from such position, you must be passionate about the magazine and the company. So, he has 100% shares, let him run the company. We are not interfering in the running of the company. We want the magazine to come out week after week, the way we did it in the last 27 years. If you buy a company, you add value to the company. Newswatch is not like government companies they buy and do whatever they like with them. Forget about the issue of percentage of ownership; did he buy it to kill it?
“He (Ibrahim) is talking about not making money. He has to invest money to make money. If he puts a printing press there; he would make money not only from printing Newswatch, but from printing for others. Under 15 months, he was crying that he was not making money. If he is not investing, how would he make money? Did he empower the company to make money? Did he employ the right kind of staff? He brought in people without media knowledge.”
Agbese added: “He (Ibrahim) bought Newswatch with his eyes open. He ought to know what he was going in for. He ought to know whether he can make immediate money as he is making in petrol stations or Air Nigeria. We showed him everything about the company before he bought into it. He has not settled one item of the debt that we gave to him in 2011. He is the publisher of National Mirror. He knows about what happens in this industry. He has been telling people that he bought into it because of the ideals of Dele Giwa, May his soul rest in peace. If he did so because of Dele Giwa, will Dele Giwa be happy to see the magazine destroyed and buried? You can see the contradictions. If he is passionate about Dele, then, he should pump in money and make it successful. When we brought him in, we wanted this magazine to survive.”