Duru: Appointment of Interim Management for First Guarantee Pension is Illegal



Mr. Chidi Duru, is the Vice Chairman, First Guarantee Pension Limited, whose board and management were suspended by the immediate past Director General of the National Pension Commission, Chinelo Anohu- Amazu. In this interview during his recent visit to THISDAY Newspapers, he maintained that all the allegations levelled against his company have been nullified by a Federal High Court, insisting that the appointment of interim managers for the company was illegal. Ebere Nwoji presents the excerpts:

There have been series of litigations by PenCom against First Guarantee Pension (FGP) in the past six year, what is the situation like now?

The outcome of the charge was that the judge reconfirms the view he has always held that the multiplicity of charges against the management and board of FGP and that the effort to have the board of the company suspended was deliberate.

Deliberate to the extent that they will like to distract attention from the main issue and that is the enforcement and implementation of judgement that nullified comprehensively target examination report by PenCom of the company and also voided the appointment of an interim management committee that has continued to run the business of the company in the last six years.

This is basically a clever plot to cover the illegality that has taken place in the company in the past six years. Now that that charge is out and has been nullified by a court of more competent jurisdiction; it validates the view held and we are looking forward to resuming operations to take back our business and hand back the business to the directors and shareholders of the company.

Note that the charge that was nullified recently is the fourth charge in the series of endless litigations and arraignment by PenCom against my person and board of FGP.

What happens to the interim management set up by PenCom in First Guarantee Pension?

Well from day one, on July 18, 2012, a Federal High Court Abuja, in a well considered 123 page judgement, reprimanded the PenCom one, for disobeying the order of the court and two, for appointing an interim management committee for FGP, against the existing and subsisting order of the court and for removing the legislatively and legally appointed board of the company.

What was left was the enforcement of that judgement of the court and more importantly, there is a positive order of the court, a fifteen page declaratory order of the court that mandated the board to resume back in its office and take over its responsibility. So in the first instance, the law that alters the judgement of the court by setting up the interim management was an illegal one .So the interim management that has been in FGP, was an illegal body so they have been there illegally for six years. We therefore believe that the law will take its course and the owners of the company through the board of directors will take over their company.

You said the former Director General of PenCom had interest in FGP and that was what gave rise to the said litigations that lingered for six years, what type of interest do you think she had in your company?

She had a pecuniary interest in FGP. She wanted the directors to bequeath to her on a free carry basis, business interest in First Guarantee which was impossible because at the end of the day, there is corporate governance based on which shares were allocated. The last call on the shares of the company was done in 2008 and it was not until February 2010, when the first dividend was paid and it became clear that FGP was a success that this request was made. Initially, I thought she was joking; of course success you know has a lot of friends.

A lot of friends could come in many ways so that indication of interest was not a surprise. But we insisted that the shares of FGP will not be granted to anybody without following due process as contained in the memo and article of the company. After that request was made, the actions that followed showed the board members that it was a serious issue.

It was in March that year that hell was let loose. By March 2012, the purported target examination report was carried out in the company on the basis of which the board members were asked to resign without following the laid down procedures as stated in the Pension Reform Act of 2004/2014, which states that any report of PenCom on a PFA or on a PFC, must first be submitted to the board of the PFA or PFC and the board of the PFA will constitute an annual general meeting or an extra ordinary general meeting of the company to deliberate on the matter. And the board of FGP, had insisted that the content of section 82 of PRA, be activated to enable PenCom submit that report to the board of FGP, which they refused to do because they knew that the report was doctored and concocted and was only meant to achieve a particular aim.

It was on account of that that we had to go to court, obtained an injunction restraining them from achieving their aim but they went ahead and dissolved the board and appointed the so called interim management.

So in a nutshell, that is what I have pinpointed to have started all of these. And then being a law abiding citizen and more importantly that in the act, I would say I played a major role in bringing the act into practice, I understood the A-Z of the PRA that we got passed in the National Assembly. I felt that we need to follow the rule of law in respect to that but unfortunately, we were dealing with a regulator at that time that was brazing the implementation of the Pension Reform Act, 2004.

Some of the things I heard from them, was “You swindled your fellow legislators who bought equity to the company, that you didn’t make any contribution, you didn’t pay for your equity and that you changed some of the resolutions of the board and you forged and you did some unseeingly things. But the question is, are these true?

Well, anybody who knows me, I was properly brought up and I have always been known to play by the rule and I am not just a lawyer of over 28 years call, I am also a known public figure in Nigeria and I also understand what it takes to be on the other side of the law and I find it particularly obscene for a regulator of law to descend in the arena. Once you descend in the arena, you lose all sense of objectivity and responsibility and that is what happened in this case. It is unfortunate that in order to win an argument, every means was deployed in disguise.

It is impossible and I say it with every sense of responsibility, it is impossible for an individual be it Chidi Duru or any other party not to have an investment in any PFA and yet the shares of a PFA will be credited in his name. In the PRA that was represented for which I shared in the house of representative and which I also had a joint share in the commission committee in the House and the senate, there were extant regulations that the National Pension Commission innovated in sense that for every investment of a shareholder in the industry whether it is a PFA or a PFC, that investment is subject to verification by the National Pension Commission and all those investments including the investment that was done by the shareholders of FGP, were verified by the National Pension Commission and I will also say with respect to the case of the company, we were subjected to what we call stringent verification requirement because when I started FGP promoter investment in 2004, I went through series of investor scrutiny.

In 2005, I invited the second set of investors in FGP after the first four investors I invited in 2004. Then in 2007, I invited the third round of investors in FGP and then in 2008 was when I invited the fourth and final investors to FGP. So there were submissions that were done by the board and the management of FGP to regulators to verify the shares of these investors in the company and finally, 6th of February 2011, the total equity investment in FGP was verified by the regulators of the National Pension Commission and the letter was communicated not to the board but to the management of FGP to verifying and approve the entire investment of the shareholders and FGP and that is on record.

So I wonder how it has happened suddenly that Duru did not make any investment in FGP and might have credited certain shares to himself without making any investment, whereas it is on record, in the writing of the regulators, that the total number of shares of investors in FGP was documented and the letter was sent to the management of FGP on the 6th of February 2011.

What is your quantum of investment in the company?

My total investment in FGP is in the range of N250, N249,460,186 as confirmed by PenCom and those investments or my investments were held in three spherical, BP accessories, which is my company; Grand Tower Plc, which is my company and the other one is in my name which is Nze Chidi Duru. It is therefore important to highlight here that without Nze Duru, there will not be FGP. It is my brain child, it is my sweat and it is my hard work and even anywhere in the world, it is also accepted that there is what is called sweat equity, assuming I didn’t put any cash in the business, which is not the case. I put in cash in the business, I put in my time in the business and I put in my resources. I started the innovation of FGP effectively on May 2nd, 2004, that was when I started. By June 2004, I invited the first set of shareholders. We were four with me making the fifth person which made us the initial shareholders of FGP. Then on the 5th of August, I registered FGP then the name was First Providend Trust limited that we later changed to FGP Limited and that was the genesis of FGP.

What is the current equity structure of the company?
The equity structure still rests in the hands of the majority shareholders and it is again on that account that Chinelo refused to call the AGM or EGM of FGP till date. I understand the reason given is very simple. She knows as a fact that if she had called a meeting with FGP that the owners of the business will take back their company.

What is the state of health of FGP or what do you think you are going to leave on ground when you get through the current situation in the company?

Well, I hope that FGP is a great plan and unfortunately it has been in the hands of a regulator…that has no commitment in the business or ownership and as board, we feel that the business has not been managed professionally. In our business plan of 2010, the five years business plan we did, we had projected that in 2015, FGP will be managing an asset size of close to N280-N300 billion. It is unfortunate that today, in 2017, the asset under management of FGP is under N130 billion. If you compare this with our peers as of 2010 when we took over FGP, our peers were managing close to N400billion, some were managing N450-N500 billion Naira. That shows you how successful we have managed FGP. But however, I also think that whatever it is, whenever we get back, we will do a forensic update of the business, know what we are trying to do and then what we have to do to revive the business and re position it to take its commanding spot in the industry.

How do you assess the performance of the former PenCom

I believe it will be expected of me to qualify her tenure as one of the regrettable appointments that the government of Jonathan did and a great injustice to the industry.
The former PenCom DG ran the industry in a very amateur and irresponsible manner. In the first instance, if you note my markup book in 2004 when we were passing the Pension Reform Act of 2004, you will find in that markup book that 10 years post enactment of the industry, that the industry’s asset under management in 2014 was estimated at N30trillion and that was what the markup was and that was the conservative recommendation of the experts that worked with me as chairman of the house committee on privatisation. And secondly, that the industry will also move towards using its assets the way and manner it is used in any other part of the world such as in infrastructure development and crystalising employment.

The more long term pension asset are used for development and infrastructure, the more they create employment and the more asset on that management grow sporadically because that is where you make your money.

But rather than doing that, what we have witnessed in the last twelve years in the post enactment of the bill is that the asset under management were only utilised for short term investments and commercial papers and investment in stock exchange .
The growth from N2.5 trillion when Chinelo took over from the last administration to N6.5trillion when she left cannot by any state of imagination be credited to her.