The managing director of Benue Investment Property Company, Alex Adum said that the company has lost billions of naira within a short period of time as a result of redundant staff which has floated and fixed financial assets deflection from 45 billion in 1999 to 25 billion in 2007, 10billion in 2015 down to less than 3 billion in 2019.
The Managing Director made this known on Tuesday at the company’s guest house in Makurdi Benue while briefing newsmen.
Adum has disclosed that the staff strength of 209 is no longer manageable nor sustainable if the company is to stay afloat to realize the mandate it was incorporated to achieve. The company may go bankrupt if it is not restructured to accommodate the present situation, only saving grace left for the company was to restructure, reorganise and the right size. He added.
He cited instances where the Nasarawa Investment Company has collapsed, Kogi State Investment Company is reorganising, Plateau is working on a new revival plan and Niger Investment is going moribund for the inability of the management to restructure, reorganise and take the hard decision to right-size as part of the reason why he is not deterred.
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The Managing Director said the move to restructure, reorganise and right size became imperative as the floating assets base of the company which was over 45 billion is now just about 3 billion without corresponding investment that would create new income streams that will cater for the over 200 staff on the company’s staff list.
” Recent successive management had failed in expanding the company but rather have employed an unrealistic number of staff with the hope of expansion. This is no longer manageable because if we insist on managing the staff, the company will go bankrupt before the end of this year. Management is rather saddened that this option is an inevitable circumstantial and existential reality we confront with boldness or go the way of Lobi Bank, BCC, Taraku mills, BBL, etc.
We have elected to confront our challenges headlong, and only wish we could have done otherwise but the reality is that we have limited options. Our property assets are mostly inchoate and overburdened with statutory debt liabilities in excess of one billion. A fact which limits our ability to play in the money market in terms of leveraging capital for our purposes. Our promoter the Benue State Government is also, unfortunately, ill liquid to advance a bailout in our trying times. Moreover seeking a bailout from our promoter is an irony because the vision of BIPC was for it to be a small investment company with hedged funds and assets to support the government in times of need as it is now.
We, however, hope that after the restructuring, reorganization and right-sizing exercise our company can attain optimization and financial health to warrant us to reinvest the little dividends accruals and rents on property. This is the best assurance we have for now that we can organically re-engineer the company and expand its investment profile with a view to generating income to offset our property asset liabilities and free the same for capital raisings. Being free and able to play in the money market will give us the leverage to access investment funds to invest in creating new businesses and employment opportunities. We have also put up our assets for PPP investment like the Lagos, Kaduna and Abuja plaza, including our microfinance bank, oil, and gas division and estate development in Mabushi, Nyiorgungu, Abinsi and many more. Interested investors are requested to come forward partnership on this and many other projects ”
The MD dispelled the rumour that he was sectional in implementation of the right sizing exercise saying the first person he sacked from BIPC was from Gwer East. However, management adopted several approaches among which are:
Last in first-out (LIFO). Under this approach, a total of about 41 staff who were last employed in July 2018 when the company had no business need to employ but was compelled by extraneous factors do so were disengaged. “I disengaged those who were last employed and under this category, 5 staff were from MINDA.” He added.
In the second round of rationalization, management considered cases of staff who were employed between January 2016 to December 2018 and we also looked at over aged staff. People who have gone past 60 years on the job. Here 15 people are affected so far. Two on account of overage; 12 on redundancy and for service no longer required and 1 on professional misconduct.
The rationalization exercise is in line with the mandate of the new management to organize the company and to save it from bankruptcy and return it to profitability.
The exercise is an ongoing exercise and will continue until we achieve an optimal size that fits the current carrying capacity of BIPC which is recommended at 60 staff as against the capacity of 209 staff. “To get BIPC back to work requires that some hard and painful decision(s) be taken by its management. Unfortunately, the task at this inauspicious time falls squarely on the shoulders of the new management of the company ably led by Barr. Ter ADUM.
Among the several methods embarked upon to reorganize the company in line with the vision of the founding fathers as an investment holding company with less than 20 staff that grow the asset base and balance sheet to over 45 billion net worth, as mentioned earlier is this painful step of right-sizing, which technically means sack.
The word ‘sack’ literally means loss of job and means of livelihood and therefore is an emotive word people naturally don’t want to hear, but the good news is that the new management is facing it headlong without fear or favor, ill will or affection, or primordial sentiments or considerations and the necessary modification to incorporate conversion of certain category of staff to contract staff as with our microfinance bank, guest house, filling station, and the head office.
The management, however, seeks no public applause for these hard decisions but craves the indulgence of the general public that there is work to be done at BIPC and if the company must work as envisaged by its founding fathers, the difficult work to make it work must be done now!
“He maintained that contrary to insinuations, the company is not employing and will not employ any time soon until the restructuring exercise is over; new investment and business opportunities are created which may lead to expansion and justify new employments. In the absence of such, it amounts to putting the cart before the horse to employ and keep over 209 staff in anticipation of expansion”
The public may also know that some of the staff are not necessarily being sacked but their appointment is restructured to give the company the carriage capacity to carry them. E.g, our two EDs at the microfinance bank are on three months’ leave for approving insider loans to themselves. Their cases are being evaluated and would be determined at the board meeting of the bank next week.
