Otedola, the majority shareholder in Geregu Power, revealed some business deals between him and the chairman of Transcorp, Elumelu.
By Jeffrey Agbo
Billionaire Femi Otedola has alleged that his fellow billionaire, Tony Elumelu, backstabbed him some years ago in the purchase of Ughelli Power Plant.
The plant is part of what is today known as Transcorp Power.
Otedola, in a statement sent to PREMIUM TIMES on Tuesday morning, made some allegations while responding to questions on his decision to sell his stakes in Transcorp.
He disclosed that he put in N250 billion to buy Transcorp Plc but it was rejected.
The businessman revealed that he bought the shares of the company because he believed in the potential of the group to hit N2 trillion in valuation.
Otedola said, “I offered to buy Transcorp Plc for N250 billion, but unfortunately, my offer was rejected. My goal was to maximise the company’s potential as a Nigerian conglomerate with a market cap of at least N2 trillion instead of the current N40 billion, but it seems some shareholders have a different vision.
“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.”
Going down memory lane, Otedola, the majority shareholder in Geregu Power, revealed some business deals between him and the chairman of Transcorp, Elumelu.
He said, “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 N2billion 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 five per cent 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.
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“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.
“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 outbid me by offering to buy the plant for $300million.”
Otedola added that his offer to buy Transcorp was “made with the best intentions for Transcorp Plc and its shareholders.”
“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,” he said.
Otedola, however, lamented that stakeholders in Nigerian companies were getting shortchanged by the owners and managers.
“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,” he said.