Transcorp

Transcorp, Another Titanic

Sam Nda-Isaiah

A few months ago, the editor of one of the titles in the Leadership stable called me to say he had a bombshell of a lead story for the following day. I was out of Abuja. Transcorp, the mega company which had arrested the imagination of Nigerians, was not registered with the Corporate Affairs Commission (CAC), he said.

“That’s not possible,” I responded. But he appeared rather cocksure of the very important information he thought he had just come across. In the newspaper business, a scoop like that one is normally considered a jackpot as it could boost the credentials of any reporter.

I told the editor to “confirm again” before going to press. After a few days, he still insisted his source was impeccable. Even with that, I gave another editor and the business correspondent whose responsibility it was to cover Transcorp the instruction to give two different lawyers the assignment of finding out the truth about the registration status of Transcorp and get back to me. When they came back, they were only too glad to “confirm” that Transcorp was indeed not registered with the CAC. With that, I gave the imprimatur, and the newspaper went to town with the story.

A few days later, my friend, Ziggy Azike, an accomplished lawyer whose firm, Chibuzo N. Ziggy Azike and Co., represents Transcorp paid me a visit. Since we were used to courtesy calls, sometimes more than one a day, I didn’t think he came to register a protest about any of our stories and, besides, I didn’t know that his well-sought-after legal firm had landed the plum account of Transcorp.

He told me firmly but politely that Leadership of which I am editor-in-chief had libelled his client. I told him we checked the facts. I even told him how we did it. “Well,” he said, “you certainly erred because TRANSNATIONAL CORPORATION OF NIGERIA PLC was incorporated under the COMPANIES AND ALLIED MATTERS ACT CAP 1990 on 17th November, 2004, with the CAC and has the certificate number RC 611238.” It was clear that he knew what he was talking about. I believed him and promised that we would issue an apology to the organisation when we authenticate his claim. Beyond that, I told him, we stood by every other thing we had averred about his client. Transcorp, I told him, reeked of corruption and presidential abuse of office. We argued about that for about an hour. His expostulation was full of sophistry. He didn’t agree with my points, but we parted amicably.

Nigerians have a problem with a publicly quoted company having Dr. Ndidi Okereke-Onyuike as chairman. Even if it is not expressly declared illegal in our statute books, common sense should tell everyone that it is inappropriate, and is against the accepted mores of ethical and professional engagement. Even if the promoters of the mega company are not intelligent enough to know that her position in the company poses a potential conflict of interest, that is not an excuse. Ignorance or obtuseness has never been accepted as an alibi in exculpating felons. In more serious countries, some people would have been in handcuffs by now.

Nigeria now has people who think because of their “special” relationship with the president, they can do just about anything they like and get away with it. And the president actually gives that impression. This Stock Exchange woman first flirted with illegality when she brought together what she called “Corporate Nigeria” to raise huge sums, including foreign currencies, for Obasanjo’s presidential campaign in 2003. What she did was clearly against the extant electoral laws. She got away with it. At least then. That’s probably why her name was in the list of those who wanted Obasanjo to remain in power forever via an illegal amendment of the constitution.

The membership of Transcorp board is star-studded. There are people there who have contributed their quotas to the development of the Nigerian economy. The group managing director, Mr. Fola Adeola, is an accomplished banker and entrepreneur who can stand his own anywhere in the world. Even today, it is difficult to look at the impressive story of Guaranty Trust Bank – a bank which came from behind to overtake several others – without linking it to him. My friend, Tony Elumelu, is another big success story. The one single word that appropriately describes Elumelu is “prodigy”.

He has an impressive record that will speak for his generation for a very long time to come. But many people cannot reconcile the records of these self-made stars of the corporate world with this very dangerous contraption called Transcorp. They don’t need Transcorp. Among the promoters are top political leaders of the Obasanjo government and their cronies. The president of the Federal Republic of Nigeria who is busy “fighting corruption” is a major promoter and shareholder of this company.

As a major promoter, he started off with the ownership of 600,000,000 (six hundred million) shares at N1.00 per share. Few knew how he paid for the shares but that is not at issue today. But when the company did a private placement to raise N6 billion, it offered its shares for N6.00 per share. Which means that, without doing anything, the president who has been busy arresting other people for corruption made a whopping profit of N3.6 billion with other people’s money. Instead of N6 billion, the private placement yielded more than N17 billion. The company now wants to raise an additional N40 billion via an initial public offer (IPO). In this economy?

Someone should please place a call to Nuhu Ribadu. With the IPO, the president is poised to make a further killing with the people’s money. And now that the company is going to the market, can’t Madam Stock Exchange see any conflict of interest? If she still has not seen any, then she must be a wonderful woman. It takes some wonder to be this blind.
Even if the president had not committed any earth-shaking crime, this is a misdemeanour, an abuse of office in which the National Assembly should have picked more than just a passing interest.

Even then, that’s not all. Transcorp, using the president’s influence, has taken over the Abuja Hilton Hotel in a very controversial transaction. And how appropriate is it for a company that is substantially owned by the president to take over the Hilton Hotel in a privatisation competitive bidding that also had other companies owned by lesser mortals! Didn’t this same Obasanjo seize the Kaduna Durbar Hotel from the Abacha family, that he accused of acquiring the hotel through sleight of hand?

NITEL would soon be handed over to this Transcorp (substantially owned by the president, I repeat) for less than $500 million. When it was sold to IILL by Nasir el-Rufai’s BPE in 2002, it was for $1.2 billion. If the transaction failed then, it had nothing to with the price. Transcorp also plans to take over the Port Harcourt Refinery and would be awarded oil blocs by the president. Those who say President Obasanjo is living the false life of an ostrich have their point. Only an ostrich would hide its head in the sand and think that because it cannot see you, you cannot see it also.

When Obasanjo took over in 1999, he confiscated several investments and funds belonging to at least two former heads of state whom he accused of abuse of office. And today, he continues to confiscate bank accounts belonging to enemy governors. It beats me to think that the president does not think that his several investments such as in Transcorp, the Presidential Library and those in the oil industry would not be confiscated in the same manner by a future government, even if that government is headed by Gbenga, his son. And besides, to think that any incoming government, even if a puppet government installed by Obasanjo, would not pick interest in an institution like Transcorp, which was in the forefront of Obasanjo’s third term adventure, would be going too far with naivety.

And the self-serving rumour by the promoters of Transcorp that the organisation was created in the mould of the chaebols of South Korea is criminally untrue. As usual, this is one of the many lies of the Obasanjo administration. The chaebols of South Korea were not started by their nation’s political leaders or their cronies. That is a major and critical difference. The promoters of the chaebols, Samsung, Daewoo, Hyundai, LG, SK, and a few others do not operate above the law as we see people like Ndidi Okereke-Onyiuke doing today. The chaebols are run like any other legal business entity but the government only intervenes to help them get into the international market so they can compete favourably.

When their owners or directors run foul of the law, they are treated like any other citizen. The founder of Daewoo has been on the run because the South Korean government wants him on some tax-related issues. In Nigeria, his counterparts get fat tax waivers for no particular reason other than for their services to the president. Nigerians still pay astronomical prices for their imported goods in spite of the waivers. Their use - as has now become public knowledge - is to fund Obasanjo’s presidential campaigns and illegal tenure extension projects, as well as other dirty jobs that may be required of them from time to time by the president. The project that the Obasanjo government is pursuing that remotely bears a semblance to a chaebol is the African Finance Corporation, which the CBN governor, Charles Soludo, is currently cobbling together. This is a mega bank, substantially owned by the private sector but with strong government holdings and support to enable it finance mega projects around the world.

If they want to be taken seriously by the Nigerian people, the owners of Transcorp (including the president) should build their own refineries instead of snapping up the Port Harcourt Refinery; apply for their own telecommunications licence and build their own NITEL from Ground Zero instead of taking over the people’s NITEL and build their own Hilton Hotel, or even their own Jumeirah Hotel, since they claim to be that big, instead of confiscating the one built with public funds. Or else, the dilemma of Transcorp would become a major issue to unravel after May 29, 2007.