Business mogul, Femi Otedola, has accused chairman of Heirs Holdings, Tony Elumelu of betrayal and backstabbing.
Daily Trust had reported that Otedola, the chairman of Geregu Power PLC, recently spent over N6billion to acquire 2.6 billion shares (6.3%) in Transnational Corporation of Nigeria, Transcorp in a move which unsettled Elumelu, who controls the company. In order to avoid a bidding war over the ownership of the Group, Otedola sold his shares to Elumelu in a deal said to be worth more than four times the value the billionaire bought them.
However in a statement released yesterday, Otedola who noted that he gave Elumelu $20 million to acquire United Bank of Africa in 2005, accused him of betrayal and backstabbing.
“In 2005, while Tony was the Managing Director of Standard Trust Bank he approached me to get funds to acquire UBA. I enthusiastically gave him $ 20 million, which was N2 billion at that time to buy the necessary shares in UBA for the acquisition. After a short period of time the share price moved up and I decided it was a good moment to sell and get out of the bank. However, Tony appealed to me to hold on to the shares as he was convinced that there were future prospects – so I kept the shares.
“I became Chairman of Transcorp Hotel in 2007 with a shareholding of 5% and unknowingly Tony gradually started buying shares quietly. By the following year in 2008 I went bankrupt in Nigeria. Tony proceeded to take my shares in UBA to service the interest on my loans and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder,” he said.
Otedola, who industry stakeholders have described as the Warren Buffett of the Nigerian Exchange Group, NGX, said he resigned as Chairman of Transcorp Hotel because of the discovery he made about Elumelu’s to acquire his shares in the company.
“Shortly after, Albert Okumagba informed me that an American firm wanted to acquire my shares in Transcorp, which I then agreed to sell. However, this supposed American firm turned out to be Tony Elumelu. The revelation of this prompted me to resign as Chairman of the hotel,” he added.
The billionaire also noted that Elumelu outbidded for Ughelli Power Plant after he had confided in him of his plan to acquire the plant.
“Years later in 2012 Tony said he wanted to see me so we met in my office where I had previously had a meeting with foreign investors who had not yet departed the premises. Curious to know, he asked what sort of meeting I had had and I disclosed that I wanted to go into the power business, specifically Ughelli Power Plant. Tony quietly went ahead to bid for Ughelli and he outbidded me by offering to buy the plant for $300million,” he said.
While Elumelu recently granted an interview where he claimed that he would be glad to have Otedola as part of Transcorp, the Chairman of Geregu Power Plant said his offer of N250bn to buy the company was rejected.
He said his intention was to maximize the company’s potential as a Nigerian conglomerate with a market capitalisation of at least N2 trillion instead of the current N40 billion.
“As a businessman, I believe in healthy competition and market dynamics. Two captains cannot man a ship, and I respect the majority shareholder’s decision to buy me out. This is the nature of the game. But let me be clear: my offer was made with the best intentions for Transcorp Plc and its shareholders. I saw an opportunity to unlock the company’s full potential and create value for everyone involved.
“It’s important for investors to understand that free entry and free exit are crucial to healthy markets. The scramble for shares after my acquisition is a testament to the value that Transcorp Plc can offer, and I hope the company continues to thrive under new leadership.
“My message to Transcorp Plc and its shareholders is this: I remain committed to the growth and success of Nigerian businesses, and I will always be looking for ways to create value for all stakeholders. Stakeholders are unfortunately always shortchanged by getting stipends while the owners and managers of the business live a jet-set lifestyle, which is detrimental to the stakeholders. Thank you for the opportunity to engage in this exciting chapter of Transcorp’s history,” he said.
Efforts to get Elumelu’s reaction were unsuccessful as of the time of filing this report. However, Daily Trust, gathered from an insider that Elumelu who was in Okoloma Afam, Rivers State for the commissioning of Transafam Power 240MW Afam III fast power plant, has not authorised any response and might decided to settle the case with Otedola instead of a reply in the media.
