Recently, Asset Management Corporation of Nigeria (AMCON) announced that it had obtained a court order to possess assets of NICON Investment Limited, Global Fleet Oil and Gas and their Group Chairman, Jimoh Ibrahim, over a debt of N50 billion owed Union Bank of Nigeria Plc. In this exclusive interview with Kunle Aderinokun and Olaseni Durojaiye, Ibrahim expresses reservations about AMCON’s decision to shut down his businesses
Trending media reports suggest that AMCON will possess some assets belonging to NICON Investment Limited (NIL), Global Fleet Oil and Gas and your personal assets including bank accounts, what are your thoughts on this?
What AMCON got was an interim court order; it lasts for 14 days but what we read in the newspapers was as if they got a court judgment against us, which is not true. However, what really happened is this: We had a transaction with Union Bank in which we used our Pound Sterling account to borrow some cash from Union Bank, meaning that it was cash-for-cash lending.
We have our group life savings, which we refer to in the group as ‘reserve’ in Pound Sterling with Union Bank and over time we deposited 132 million Pound Sterling cash in that account, against that, we then borrowed N16 billion. As at that time, the naira value of the cash that we had with the bank was N32 billion and we borrowed N16 billion; obviously we had excess surplus with Union Bank and that was a good loan that any bank will do, meaning that the cash that we had with the bank was far more than what we borrowed.
Along the line, we wanted to repay the N16 billion loan with part of our Pound Sterling loan, as we were trying to do we’re informed that Union Bank has been bought over by Central Bank of Nigeria and a new management led by Mrs. Funke Osibodu put in place. When the new management led by Mrs. Funke Osibodu came in, we had a meeting with them.
At the meeting they said to us that they were new and needed some time to study the transaction to be sure that it was in order. We told them that was fine by us, we even gave them records of our Pound Sterling account including the statement of account of the fixed deposit account and the certificate that was given to us as proof of the transaction and they didn’t deny that we were owe them the money. So that was not a problem again.
The next thing we heard was that they have sold the money and we were like how could you have sold the money without authorisation from us. The next thing we saw was again was a writ of summons to appear in court. When we got to court we showed the court proof of our deposit with Union Bank, we also showed them documents that showed what we borrowed from them. The court looked at the documents and gave judgment. In the 130-page judgment, court dismissed the case brought by Union Bank against us. In other words, Union Bank lost the case they instituted against us.
We then applied to a Lagos High Court for order to collect the judgment since we didn’t institute the case, we only went to court to defend a case brought against us so we could approach a Lagos High Court to get our money back. At that point, Union Bank then filed papers and admitted that it was true that we had the money with them adding that they needed sometime to file their papers. The court then adjourned for definite hearing of the case; but while the Lordship was preparing to hear the case, she asked both parties to agree on documents to be tendered so that the case can be heard on the strength of the documents that both parties have agreed on; then the counsels were doing that. The next thing we heard was that AMCON had gone to court to get an interim order against us.
When did AMCON go to court?
They went to court last week. This case has been in court since 2010; we’re now in 2016; so how come AMCON still went to court when then they knew that the case was still in court and Union Bank has put up appearance and that Union Bank has lost one of the cases.
In fairness to AMCON, the former management of AMCON was aware of the court cases and they didn’t bother with us; or perhaps they were waiting for judgment to be delivered in the case before they act. What we suspect is that someone in AMCON may have told them a lie that there was no case pending in court on the matter and then they went on to get an interim order that says they should possess N50 billion against us, that is, the N16 billion with interest from that period to the present is now N50 billion.
Okay, what about the 132 million Pound sterling that was agreed on five per cent interest rate which would have risen to 175 million Pound sterling, which is now N96 billion? So who owes who? If I had N96 billion with you and I owe you N50 billion, how then do you now come around to say I am owing you? What about the N46 billion balance?
My suspicion is that, the exchange rate has become a problem for Union Bank. The real problem could be that the exchange rate rose against the bank and everybody is panicky, as at the time we were doing the transaction the Pound was N250 and it is now N550 to a Pound which is to our advantage, which means that the volume of money that we have with them has grown.
But there was a court judgment that exonerated you in the case …
But I was still joined in the case despite the fact that in the initial judgment the court declared that joining me in the case was done in bad faith. If a company borrowed money why are you joining Jimoh Ibrahim?
What is your current relationship with Union Bank like? Or have you severed your relationship with the bank?
The fact that AMCON is coming six years after, when we are still in court is condemnable. It is an abuse of court process because they are aware that the case is still in court; they shouldn’t have come up with all of these, they should have waited until judgment is delivered in the matter before they acted.
So what is your response to AMCON’s action?
My response is to discharge the court order. The agreement that AMCON and Union Bank entered into was in December 2010 while we filed our case on May 28th 2010; in order words, while the second case was pending they ((Union Bank and AMCON) were already meeting. So they know that it wasn’t a right move to make. And even if AMCON had bought the debt why didn’t they inform us or invite us to a meeting to tell us that they have bought over our debt with Union Bank. They didn’t call us from 2010 to 2016 to come and discuss our ‘debt’.
Are you taking any action against AMCON?
What we have done is to file court papers to discharge the interim court order, after that, we will wait for the judgment at the Lagos High Court to collect our Pound Sterling and if we are owing them any money, we will pay Union Bank. Of course, our money is with Union Bank; that is not in doubt.
Do you really think any bank will shell out 132 million Pound Sterling from its vault given the current trend in the forex market?
That is why we’re in court. That is why the court will pronounce that we have money with them since they didn’t deny that we do. The action of AMCON is mischievous and it is killing the country’s economy. A man has N86 billion with you and you say he is owing you N50 billion, you didn’t convene a single meeting with him for almost six years and then you suddenly wake up one day and rushed to court to obtain an interim order just because President Buhari is now in office and you want to impress him that you are working.
What is the monetary value of all the assets that were listed for possession?
Lest I forget, in the interim court order that they got, they said I am the owner of Cumberland Hotel in London; am I the owner? They also deceived the Court that I am the owner of Grand Mid-West Hotel in Dubai, this was the hotel where we had our group seminar, and they also stated that AMCON will take them over. They also listed number 94 Awolowo Road, Ikoyi, Lagos House as belonging to me because it is called “Energy House;” same thing for former Allied Bank building at No 3 Apapa-Oshodi Expressway. The court was deceived to grant orders against properties that I don’t even know who owned them.
What do you ascribe all of these to?
I think AMCON is just being mischievous. If you bought over an alleged debt, it is only proper that you convene a meeting between the two parties to have a discussion around the issue; you don’t buy a debt and only meet with one party without meeting with the other party. More so, you know that they are in court and that one party has deposit with the other party.
Then again, NICON Insurance didn’t borrow any money, NICON Hotel didn’t borrow any money; in the case filed by AMCON there was no mention of these companies so why then go after the companies.
That could be because they are in the same group?
Does it mean that because one company belongs to a group it can’t have a different business interest? I am not the only shareholder in the group that we’re talking about here; for instance, Federal Government of Nigeria has shares is NICON Insurance, does it then mean that Jimoh Ibrahim owns the place and then they should go and seal it up. I don’t know what their motive is; are they really pursuing recovery or something else?
Well, I know that it is a straight forward case; we will have the order discharged. And if the court for any reason don’t discharge the order, we have the Court of Appeal.
There are insinuations that you benefitted from the aviation intervention Fund and that it was not appropriately deployed?
That has been laid to rest with my appearance at the senate hearing on the matter. The Central Bank of Nigeria also made it clear that they didn’t give any aviation intervention fund directly to the airlines and that the money was to refinance the loans that were granted the airlines.
Let me refresh your memory. When we bought over Air Nigeria we met a $150 million loan on ground. So when the CBN bought over the loan, how does that come to us? That was an account to account clearance yet people were mentioning Jimoh Ibrahim all over the place. When I appeared before the Senate Committee I made that clear and the Senate Committee saw my point and the Chairman of the committee stated it that the fund was a bank to bank transaction with no cash ever getting to us. I believe my submission at the Senate has cleared the air on that and that matter has been laid to rest.
Was there any time that you got wind of AMCON’s plans to approach the court to get an order to possess your assets?
Even if I got wind of it there was nothing that I could have done; if I were in court that day the court will not listen to me. What I expected was for AMCON to have written a letter to me which they didn’t do.
Do you see this as impugning your reputation?
It does not affect my reputation in any way that a company that I have interests in owes a bank. Assuming that my company owes a bank, which company doesn’t owe in its entire life span? Companies owe, that’s allowed in businesses.
Owing is different from owing and refusing to repay. It doesn’t matter; it only becomes an issue if the company collapses.
But you have not declared bankruptcy…
You can only declare the company bankrupt not the directors of the company. What we must not fail to realise is that there is a separate personality between the company that owes and the owners of the company. The fact that I represent a company is not a guarantee that the company is going to live forever, a company can die and it does not mean that because a company died due to bankruptcy.
The owners could decide to wind down the company if they realise that they can no longer run the company. Did government not wound down some of its companies when they realised that they cannot run it and the company was moribund and eating deep into the national pocket? You cannot give guarantee that a company won’t die.
Didn’t Merrill Lynch die? Even British Airways, Goldman Sachs, all had their problems. Every company is bound to have their problem at one point or the other but what you have in Nigeria is that you can hardly separate a company from the owners of the company. So what does my reputation got to do with that? Does it mean that I cannot attain any position that I aspire to attain?
Would you say you left the company better than you met it?
When Richard Branson ran the company, he left a huge debt with UBA; does it mean that Richard Branson doesn’t have a reputation again? He left the airline with two aircraft parked at the tarmac and walked out all his management staff. Have you forgotten the state at which I bought the airline? It was actually at a stage of being wound up by Guaranty Trust Bank because the management of the company owed the bank some money. The case was adjourned for judgment when I bought over the airline. If a company is set up and its asset is in trillion, and, assuming the company owes a bank N50 billion what is the proportion of that debt to your asset? 0.1 per cent; is that what you call debt. If as a business man you do not have any liability at any point in time then you’re a thief.
If at the time that you bought over Air Nigeria it was in such bad shape, why did you still go ahead to buy it over?
It was about how to rescue the country from certain misnomers. It is absurd that a country of 180 million people is without a national airline. I was a young man, in my early 40s and I saw a foreigner who came into the country and tried to provide us with a National carrier, he was celebrated when he came here during the President Obasanjo’s administration; the man tried his best but when he realised that the Nigerian problem would not allow him to run the company profitably he decided to leave and at the time he was leaving the airline was owing so much, about a quarter of a billion dollar, that’s a lot of money. But you cannot blame him, he has done his best but the system would not allow him to work.
I bought it over because I thought if the system did not allow it to work for him, may be Jimoh Ibrahim who is a Nigerian would be able to walk around those factors, so I took over. I didn’t see anything bad in what Richard Branson did.
Even though the airline owed $250 million at the time, don’t forget that Richard Branson developed the West African route and people were able to fly with affordable tickets. Lagos to London was also opened and we were able to compete with British Airways but when Nigerians won’t allow it to work, then I took over. I cannot continue to use his brand so I had to change the name, yet I didn’t change the name to Jimoh Airline which I could have done; I changed it to Air Nigeria. I did all asset debentures to our group to be able to run the airline then we grew it from 2 planes to about 12 planes.
What killed the airline is the same Nigerian factor. One fateful day I flew the airline and saw that the flight was fully booked, I flew back to Nigeria the same day and the whole seats were fully booked, by the time we got back to Lagos, when I asked for the revenue, it was nowhere to be found. In my bid to find out what was happening by myself, I went to London, when I opened the drawer of the accountant in London I found bundles of tickets there, then I took one bundle and brought it with me to Lagos, days after my accountant didn’t report any missing ticket. Two weeks after I summoned him to Lagos and I said to him, see the tickets that I took from your office drawer. They were printing tickets and selling and keeping the money for themselves. When I realised that they were working against making it a successful business I decided to shut it down.
We went to Egypt Air and leased an aircraft, we paid $3.5 million initial deposits and we were paying $1.5 million every month for the rental lease; we also accommodated all the pilots in Sheraton Hotel because the owners of the aircraft wouldn’t allow any other pilot other than their’s to fly the aircraft. We agreed to all of that yet the people running the airline were printing tickets and selling it for N40,000 and N50, 000; even as a member of IATA, the ticketing wasn’t going into the system. Then what do I do? Do I stop somebody who has a ticket from boarding? Yet we weren’t seeing the money, do I continue with that kind of business?
At one time, staff members came to me and said they wanted to go on strike for unpaid salary of month of May, they came on a day that I wanted to travel to get an additional aircraft on lease and I told them how could you be talking of going on strike for the salary of May when it is just 23rd of May; when May has not ended. I told them somebody was using them and asked them to go ahead with the strike. They went on strike and later called it off and when they resumed, the regulators came over to say they wanted to inspect our aircraft because we didn’t fly for two or three days.
They said they want to inspect our fleet and I said to them that this is an unusual inspection, because we didn’t fly for two or three days you want to inspect the entire fleet and Captain Demuren told me to go and talk to the minister of aviation. I told him that I cannot go and talk to any minister if I won’t be allowed to run the airline as I should be running it.
Were there no checks in place to forestall such sharp practices?
What kind of check could you have put in place that Nigerians won’t abuse?
You said you bought Air Nigeria and you shut it down because of sharp practices; with benefit of hindsight, do think that was the best way to have gone about the problem with Air Nigeria?
That was the best way because of safety. If people are corrupt within an airline they can compromise safety and if they compromised safety an aircraft could crash, if it crashed people will die and they will mention my name that I am the owner of the aircraft; I probably will not be able to come out of that stigma. Imagine going along the road and somebody points to you and say ‘his airline killed my father.’ It could even kill the entire group.
In all of these, what are your thoughts regarding doing business in Nigeria?
Before I went into business in Nigeria, I was told that doing business in Nigeria was tough but I didn’t agree with them.
I believe the problem with doing business in Nigeria is a systemic problem, I don’t have a time frame but I know things will get better with time. It is not limited to business people alone or doing business in Nigeria. I am sure you are aware of how EFCC has been arresting people and the huge sums of money involved, it has permeated down to the grassroots so much that people are extremely fraudulent. The issue is that remuneration package for workers is low and people don’t see the reward for loyalty.
One of the solutions to the problem is for workers to be certain that they will get their due reward including pensions the moment they are done working. As a journalist, you want a situation that when you retire from active employment you can walk straight to the pension office and start drawing from your pension if that will not happen your loyalty will be affected.
It is the same thing with an airline worker, you work and expect to get your salary at the end of the month but if you were yet to get it for two months, the chances that you will not go for fairly used spare parts when you are asked to buy one is very low. Definitely you can compromise safety and the consequence of it is hundreds of people will die if the plane crashes. That said, doing business in Nigeria, I want to agree is very tough and difficult.