Posted by 9jabook.com on March 26, 2009 at 10:00pm
Like the lava of an active volcano, the on-going personal feud between Nigeria`s richest duo, Ahaji Aliko Dangote and Femi Otedola has taken a dangerous turn with no visible end in sight. The schism between the two men assumed melodramatic proportions on Wednesday, March 25, 2009, when Aliko Dangote, chairman of Dangote group of companies, led a team of armed police men to forcefully take over a TOTAL petrol station in Lagos, owned by Femi Otedola. The reasons for the action was not immediately discernible but keen observers claim it might not be unconnected to major differences within the Blue Star Oil Services Limited; a consortium floated by Aliko Dangote and Femi Otedola under whose name they bought the Port Harcourt and Kaduna Refineries, in circumstances described as shady.
No one knows how messy it will get between the two men, listed by Forbes magazine as amongst the world’s richest people, but Huhuonline.com learnt that Dangote’s seizure of the petrol station was in violation of a court injunction, highlighting prospects that the bad blood might eventually degenerate and precipitate an unfortunate legal fracas.
Aliko Dangote & Femi Otedola
The lingering animosity between the two billionaires came to the public glare last week, when Femi Otedola took full page advertorials in some national dailies accusing Aliko Dangote and one of his subsidiaries, Nova Finance and Securities of unethical practices, which he said caused the share price of his AP Plc holdings to plummet in the Nigerian capital market. At its peak, Huhuonline.com learnt that Otedola’s AP shares sold for N239, but has plummeted to below N60; a development he blames on Dangote.
The Otedola advertorials read: “Our investigations have revealed that Messrs Nova Finance and Securities Limited, acting under the instruction of, and with the active support and connivance of Alhaji Aliko Dangote, President and Chief Executive Officer of Dangote Group, has been primarily responsible for the steep decline in the value of the shares of AP Plc on the floor of the NSE. “Indeed, our investigations revealed that in the last eight weeks, there had been premeditated and orchestrated ‘crossing’ of AP Plc shares among other entities owned and controlled by either Alhaji Aliko Dangote or Nova Finance and Securities Limited.”
Otedola was said to have voiced his resolve and determination to use all machinery and available avenues to pay back Dangote in his own coin. Peeved and embarrassed by Otedola’s public accusations which he interpreted to mean a personal affront, Huhuonline.com was told by sources who elected anonymity, that Dangote too has vowed that he will do everything within his power to instigate frustrations for and make Otedola’s financial misfortunes worse.
There seems to be unanimity of opinion that price fixing and insider trading has been the stock in trade in the Nigerian capital market. Keen observers therefore see Otedola’s accusations as purely a case of the kettle calling the pot black. It is worth recalling that in February 2008, the Security and Exchange Commission accused Femi Otedola and AP Plc of price manipulation, but took no action against him.
The seeds for the rupture of the once cozy relationship between the two men were said to have been planted during the former administration through a series of orchestrated transactions with ex-President Olusegun Obasanjo acting as canon fodder. Sources close to the former president told Huhuonline.com that Dangote felt irritated and short changed by OBJ’s tacit support that enabled Otedola to covertly acquire major shares in Dangote’s cement conglomerate using proxies. The alleged manipulation by Dangote and Nova Finance and Securities and the resulting financial woes of AP Plc was a means of nailing Otedola to the cross; encroaching into his territory, in preparation for a hostile corporate take over.
Huhuonline.com investigations revealed that the cat-and-mouse relationship between Aliko Dangote and ex-president Obasanjo hit a snag when the Bureau of Public Enterprise led by Mallam Nasir El-Rufai (presently a Mason Fellow at Harvard University Kennedy School of Government) sold the Benue Cement Company to the Dangote Group. The former president was so angry that he was not inform and reportedly ordered the privatization agency to cancel the deal. However, relations between Dangote and OBJ warmed up when then vice-president and principal financier, Atiku Abubakar refused to bankroll OBJ’s re-election campaign. Dangote is said to have come to Obasanjo`s rescue with a two billion naira cash donation that helped guaranteed the president’s re-election. And Dangote believes that between him and Otedola, OBJ who acted as “Godfather” to the two men gave him the short end of the stick. That was then. With OBJ no longer in power, the chicken has come home to roost, resulting in a free for all melee, as both men and their proxies are seriously engaged in undoing each other.
As Huhuonline.com reported, in 2007, Aliko Dangote and Femi Otedola floated a consortium, called Blue Star oil Services Limited, with which they bought the Port Harcourt and Kaduna Refineries, under shady circumstances. In a consortium, each participant retains its separate legal status and the consortium's control over each participant is generally limited to activities involving the joint endeavor. A consortium is formed by contract, which delineates the rights and obligations of each member. However, the official Blue Star Oil Services tender to purchase the refineries; signed by Aliko Dangote lists only Aliko Dangote and Sanni Dangote of Dangote Group as directors. Femi Otedola or Zenon Oil was not listed. Nevertheless, Nigerians were told by the Bureau of Public Enterprise that Blue Star Oil Services was a consortium of Dangote Groups and Zenon Oil. The KRPC sale, which poses more questions, than answers, has since been annulled, thanks to the citizens of Nigeria.
Last year, after Huhuonline.com broke the story on Aliko Dangote shady deals in the Bureau of Public Enterprises, one Jonathan Ango, ostensibly an Aliko Dangote proxy wrote to us: “Don’t know what your stake is in the Dangote saga. I also do not know Dangote apart from what I hear and read in the media. What I know is we cannot pretend to be a capitalist democracy, if the government must continue to run commercial ventures. I do not see anything wrong in Dangote having his candidate in the BPE or his buying up the refineries, if he can pay for it and it runs efficiently on a profit basis and he dutifully pays his taxes. At least, he will guarantee employment and hence boost the Nigerian economy. At least he has proven himself in the sugar and cement companies he has bought over. Or would you rather have the refineries run by incompetent bureaucrats and civil servants causing a drain pipe in the economy? Capitalism the world over has its short comings, but it is far better than socialism (state controlled business), that is why it collapsed in the countries that practiced it. Except if you have a personal grudge against Dangote as a person. What of Otedola buying up AP”?
With the SEC now wading into the crisis, the question now begging for an answer is: are we actually at the beginning of the end, as Wilson Churchill, one time British Prime Minister once asked - or the end of the beginning? It’s a wait and see game which only time will tell.
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