POLITICS OF BUSINESS: GTBANK/INNOSON, EFCC/DANGOTE

 

POLITICS OF BUSINESS: GTBANK/INNOSON, EFCC/DANGOTE

To understand government’s role in business and vice versa, it's important to recognize the place of both in a country. Business and politics are so intertwined and inseparable that each influences the other.  The modes and tactics are also similar.

 

There is a running battle that has occupied the airwaves for some years between the GT group and Innoson group.

Innoson Group is an indigenous privately owned Nigerian group of companies with interests that span various strategic manufacturing concerns, including automobile, tire and tubes, plastics and motorcycle.

Innocent Chukuma is the owner and founder of the group Nigeria's first indigenous automobile manufacturing company. He is a Nigerian business magnate and investor.

Guaranty Trust Holding Company PLC also known as GTCO PLC or GT Group is a multinational financial services group, that offers retail and investment banking, pension management, asset management and payments services, headquartered in Victoria Island, Lagos, Nigeria. GTCO Plc was created in July 2021 following the corporate reorganization of Guaranty Trust Bank PLC which means it now offers more services beyond banking; with a payments business being top of mind for the group.

Both Innoson group and GTCO have told totally different stories. Innoson says the bank overcharged his account almost N800mllion – from a single account in Nnewi Branch. He wrote to them. They agreed that it was around N600million. Having agreed, he then calculated the compounded interest for so many years at 22% and what they owed him became N8billion. 

He took them to court, got a judgment. GT Bank couldn’t pay. He asked them to give him shares instead. Sad story. Anyone will identify with Innoson and feel anger well up against GT.

GT Bank has a different version of the story.

The bank says it lent N2.4Billion in 2009  that was added together and availed to Innoson, just like they do with anyone who is bold enough to cook up a scheme and approach them at the highest level.

Only the connected get such loans in Nigeria, and they almost always never repay. The loan was for importation of motorcycle parts. That is Innoson’s original business. GT says the transaction went well up to a point, and they held on to the documents (Bill of lading and the rest), without which Innoson could not clear the goods, except he had first made some down payments.

In short, GT Bank could have cleared the motorcycles from the ports and issued one each to its staff if Innoson could not meet its side of the bargain. The motorcycles technically belonged to GTBank. For such transactions, Innoson will pay down the loan gradually after clearing the goods, under the bank’s supervision.

GT says they did not know when Innoson cleared the goods, and sold off, abandoning his account with them. That was between 2011 and 2012. He had left a debit balance of N1.6billion which they had been asking him to pay but he didn’t perform. According to the bank, he was once arrested, and promised EFCC he will pay in installments. Once out, he reneged.

These two stories have no nexus. No connection. Both sides seem to have polished their stories and are sticking to it. Whose report do we believe?

Innoson employed some smart auditors who audited its accounts and found cases where the bank overcharged the group. They came up with N800million overcharge.

GT Bank reportedly accepted to pay N600million though. Calculating back at an interest of about 22% N600million became N8billion which the bank could not pay. For this he demanded shares that will probably make him one of the largest shareholders in the bank.

He is playing hardball.

It is not only GTBank that is vulnerable here. In fact, the integrity of Innoson the man is equivalent to the relative integrity of his cars. If he doesn’t show faith in business transactions, he is unlikely to show integrity in putting his cars together without cutting corners or embracing the kind of growth mindset that innovation entails.

However if indeed GT Bank accepted to pay him that much, then they are bound by their promise. GT then has to negotiate the N8billion part with Innoson – because he has them by the balls (whether wrongly or rightly).

As for GT’s story, there is at least one antecedent, and it is between two other Nnewi men  so this is NOT about tribe or religion or politics, but about BUSINESS or the lack of ethics in business.

In the year 2012 the public was treated to the salacious tales of woe between Messrs Ifeanyi Uba and Cosmas Maduka – two ‘billionaires’. Cosmas had been convinced by Uba, whom he alleged no bank will do business with, to enter into the oil and gas business.  Cosmans said he agreed to ‘help’ Uba because he was his ‘brother’. Uba (being very close to the Jonathan family), purportedly had insider information that the President will remove subsidies and the price of petrol will skyrocket (that sure happened on the 1st of January, 2012). Now, Maduka said Uba ‘jobbed’ him. It was a classic case of 419. Their two companies went into a joint venture. Cosmas, being a director at Access Bank, obtained loans which Uba could not get access to because of his reputation. That was what Maduka said. He even said that the MD of Access Bank at the time of this deal, Aig Imokhuede swore he could never stand in the same room as Uba.

Cosmas brought the money. Uba owned the tank farm. They will import petrol, and Cosmas had his men at the depot, to keep an eagle eye as the petrol was discharged for sale to poor you and me. Cosmas’ men made sure no money was lost. The business was fantastic; much better than selling Range Rover and Ford SUVs to government agencies. The last set of importation never arrived in Nigeria. While he was holding on to the bill of lading for the petrol armada that he and Ifeanyi had planned, smart boy Ifeanyi allegedly managed to divert the products. Till today, the Coscharis man is probably still holding on to the documents. As at that time, he said he was in the hole for N21billion at Access Bank.

CBN removed him as a director of the bank.

So in short, it is possible for Innoson to clear the goods without GT knowing, more so in a corrupt country such as ours.

The battle between Innoson  and the GT group keeps going back and forth in the courts, with the courts giving different, sometimes conflicting, judgements.

The politics and intrigues continue in and outside the courts.

While that drama was going on, a different kind of drama of a different type was going on somewhere else.

Operatives of the Economic and Financial Crimes Commission (EFCC) on Thursday raided the headquarters of the one of Africa’s largest conglomerates in connection with ongoing investigation into forex allocations in the country.

On arrival at the headquarters of Lagos Dangote Group in Lagos, the EFCC operatives demanded documents relating to allocation of foreign exchange to the group in the last ten years.

They then scrutinised the documents provided by officials of the Group for hours, carting some of them away.

The EFCC had written to 52 companies directing them to supply documents supporting the allocation and utilization of foreign currencies to them in the last 10 years.

The EFCC letter to the companies is part of ongoing investigation into alleged preferential Forex allocations to individuals and organisation by the Godwin Emefiele-led Central Bank of Nigeria.

Investigators have in the past months accused the CBN of favouring and enriching some individuals and companies through non-transparent allocation of foreign exchange to them.

In December a forensic audit of the CBN under Mr Emefiele uncovered 593 bank accounts domiciled in the United States, the United Kingdom and China in which Nigerian funds were deposited without authorisation from the board and investment committee of the apex bank.

The special investigator revealed that the sum of 543.4 million pounds was kept by Mr Emefiele in fixed deposit accounts, adding that the ex-CBN chief manipulated the naira exchange rate and committed fraud in the e-Naira project.

Some of the companies the EFCC wrote to had since complied, others asked for more time to gather the requested information and documents.

But in a surprising move, the EFCC stormed Dangote headquarters just as the company tried to surrender boxes of documents to the anti-graft agencies.

A source said “The Dangote people intimated the EFCC that the documents were ready and that they were bringing them over,” But the EFCC said its operatives would rather come to the company to collect the documents.

“The Dangote Group is perhaps Africa’s largest conglomerate and it is troubling that the EFCC could deal with it in an unnecessary show of force especially when it is not obstructing its investigation in any form,” the source added.

Some observers believe the influence of politics in the matters cannot be overruled. Aliko Dangote is believed to be in the good books of the previous government and his business had enjoyed “uncommon favours”, especially from the Emefiele-led apex bank.

The government action on the Dangote Group is speculated to have been politically motivated. People could do almost anything and get away with it as long as they were on the good side of the incumbent government.

A public affairs analyst said the Dangote Group would have had no trouble if they were in league with the government of the day.

The influence of politics on businesses can be negative or positive depending on which government is in power. Getting “uncommon favours” and impunity however is a sign of corruption in the system.

Both Innoson and Dangote are on top of the brand list in the Nigerian industrial and Business environment.