• Monday, July 15, 2024
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Ikeja Hotel: Issue that triggered shareholders anger, comments at EGM

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Nigerians who accessed the popular Bank Anthony Way, Ikeja, Lagos, between the hours of 9am and 12 noon, whether through the Ikeja or Maryland bound lanes, on January 6, 2015, would have wondered why the scary scene at the popular Sheraton Hotels plc.

With the presence of uniformed policemen, who prevented many people from entering the premises of the hotel, not a few will link it to an Extra Ordinary General Meeting (EGM) of Ikeja Hotel plc, meant to be held there.

Interestingly, the whole ruse and challenges, wherever it may have come from, could not deter the eager looking shareholders from taking their decisions concerning the management/board of Ikeja Hotel plc, a company listed on the Nigerian Stock Exchange (NSE) under hotels/lodging services subsector. At the first trading day of this year, the share price of the company closed at N3.70 kobo.

Shareholders showed willingness to hold the EGM, even if it was inside a pit, as far as the outcome gives the peace – which is change in board leadership.

The EGM and its outcome

Amid the challenges that prevented shareholders from entering the original venue of the meeting for the EGM, which held this Tuesday in Lagos, the shareholders succeeded in removing Goodie Ibru as chairman of the company.

Interestingly, the EGM held in an unconventional venue (outside the premises of Ikeja Hotel plc) despite a notice to shareholders some other stakeholders placed on the entrance of the Sheraton Hotel, the original venue of the EGM, that the meeting had been cancelled by a Federal High Court sitting in Abuja.

Also at the EGM, Oluimde Braithwaite was appointed chairman to replace Goodie Ibru, while Tunde Sarumi was appointed a director of Ikeja Hotel plc. At the meeting, Boniface Okezie, president, Progressive Shareholders Association of Nigeria (PSAN), seconded the motion.

In the absence of the removed chairman (Goodie Ibru) and the company secretary, shareholders appointed Rasheed Olaoluwa to chair the meeting, while Sophia Abiri-Franklin was appointed by the shareholders as interim secretary, in a motion that was seconded by Adebayo Adeleke, general secretary, Independent Shareholders Association of Nigeria (ISAN), and Timothy Adeshiyan, president, Nigerian Shareholders Solidarity Association (NSSA).

Also, the shareholders at the meeting appointed audit firm – KPMG for the purpose of carrying out forensic audit of the management of the affairs of Ikeja Hotel plc from 1999 to 2014; forensic audit of the share register and verification of the funding and payment for the shares of the company by holders, directly/indirectly, of share that amounts to 2 percent or more of the company’s issued share capital. The resolution was seconded by Timothy Adeshiyan, president, Nigerian Shareholders Solidarity Association (NSSA).

A Federal High Court order

A Federal High Court in Lagos had considered a suit no: FHC/L/CS/1956/2014 between Alurum Investments Limited, Dadifoll Limited, and RFC Limited as plaintiffs/applicants and Ikeja Hotel plc, IHL Services Limited, and Union Registrars Limited, ordered that the Extra Ordinary General Meeting be convened on January 5, 2015, by the plaintiff/applicant.

The Federal High Court also mandated the defendants/respondents, their representatives and all parties duly entitled to attend the EGM; also that any resolution taken at the EGM is valid pending when the determination of the motion on notice is granted. The Federal High Court Lagos had adjourned to January 14, 2015, for report of compliance.

The intrigue is that both the court order for the extra-ordinary general meeting to hold and the order for its cancelation came from a Federal High Court. Just that the earlier order came from Lagos, the later order was from Abuja jurisdictions.

Shareholders’ view/position

Shareholders insisted that in line with the provision of the Companies and Allied Matter Act (CAMA), which requires them (shareholders) to commence such meeting an hour later than the original time of the meeting as well as take resolutions in the absences of the chairman and any board member.

“For the past five years, Ikeja Hotel has not paid any dividend. We only received 10 kobo dividend in 2009, which was paid in 2010. Goodie should give way so that we run this company to profitability. We want a change, the company must be salvaged from this mess. For the past five years, no return, even the people that contributed immensely to the growth of the company, you did not put them on the board,” Okezie said, ahead of the meeting.

According to him, “We have three companies as subsidiaries, but they refused to pay dividend. Our percentage is about 68 percent of the total equity holding while 6.7 percent is his own percentage, and corporate governance does not permit him to be executive chairman of the Public Liability Company.

“We are at a stage where there is no hope in Ikeja Hotel. If we hold this meeting (EGM), the views of the majority will supercede his own, he ran to Abuja to get a counter injunction. We have a superior legal authority to hold this meeting. He violated the law, he should have taken a power of honour by resigning. We have advised him to resign to put his son there and we don’t know how long we will continue to suffer. Since 1984, no capital appreciation for shareholders because the company is stage managed. IHL Securities takes 10 percent of the total turnover of the company every year and the money is not being reported to the account of the hotel.”

“We are rescuing this company from the hands of the cabal. We are legally authorised to hold this meeting. The regulators should come and see what is happening. We want to remove the virus that is eating deep into this company. How long shall we wait. You will see changed after today. There must be transparency and accountability in this company. Our auditors have also compromised,” Adeshiyan told BusinessDay ahead of the meeting, adding that “with our review of the assets of this company, the assets of this company worth N700 billion.”

According to Adebayo, general secretary, Independent Shareholders Association of Nigeria, “What is happening here today is very interesting. The day shareholders wake up to demand for accountability on the part of their trustees – that is the directors, it is when they begin to get value for their investment. That is what you are seeing today. We have been very passive. The frustrations on the part of shareholders that they have not gotten commensurate value for their investment for so long has triggered this incident. People are simply demanding for a restructuring of the board and for more accountability.

“Before now, the running of the business belongs to shareholders, then to the board, then to the management. There are a lot of issues in Ikeja Hotel which ought to be addressed. Do you know that some key investors aligned with the retail shareholders, to show you the enormity of this case.”

The company and performance

Ikeja Hotel plc engages in the acquisition and development of hotel and tourist facilities in Nigeria. It operates three hotels: Sheraton Lagos Hotel and Towers, Federal Palace Hotel, and Abuja Sheraton Hotel and Towers. Ikeja Hotel was founded in 1972, as Properties Development Limited and changed its name to Ikeja Hotel Limited in 1980. Later, it changed its name to Ikeja Hotel plc in 1991.

In the nine months to September 2014, Ikeja Hotel reported turnover decline to N3.936 billion against N4.794 billion in the corresponding period of 2013. From a profit before taxation of N984.892 million in the same third-quarter (Q3) of 2013, the company reported loss before taxation of N2.554 million in Q3’2014.

The company loss for the period was put at N2.554 million against profit after tax of N669.726 million in the corresponding period of 2013. Ikeja Hotel plc basic earnings per share was zero against 32kobo in Q3’13.

 

Iheanyi Nwachukwu