Intrigues among top managers of the Odu’a Group of Company on how best to run the regional conglomerate informed its board dissolution by the Southwest governors at the weekend.
Governors of the six Southwest states wielded the big stick and directed the Group Managing Director/Chief Executive Officer (CEO), Adewale Raji, to take full charge at the conglomerate pending the constitution of a new board.
The decision ended a sour five-year battle between members of the dissolved Sola Akinwunmi-led board and the GMD/CEO over who wields the higher power between them.
The trouble started when the GMD assumed duty in 2014 and discovered that the corporate governance of the company was poor, it was learnt.
According to a source, the board members, who were politicians, took their appointments for patronage at the conglomerate.
Ondo State Governor, who is also the Chairman of Southwest Governors’ Forum, Oluwarotimi Akeredolu announced the board dissolution after a virtual meeting.
The board is made up of six directors, each appointed by a governor to represent the state; the GMD and company secretary who is a member of the management.
The chairmanship of the board is rotated among the six directors for a four-year term.
Raji described Odu’a as a business organisation that must deliver on profitability and up its game in corporate governance.
According to him, the conglomerate should expand its operations and run like a proper business to compete with other major players in all sectors of the economy.
To achieve that objective, the GMD took some decisions which affected the income and influence of the directors to the benefit of the conglomerate.
From his first year in office, he restored the culture of paying dividends to shareholders – Oyo, Ondo, Osun, Ogun, Ekiti and Lagos states.
During its Annual General Meeting (AGM) last September, the company paid its six shareholders N292 million dividends for the 2008 financial year, bringing the total dividends paid in the last five years to N1.208 billion.
Raji attributed the improvement to disciplined operational performance and focused effort to transform its business models to “one in which all constituent units are operating and contributing as a proper growing concern that is responsible and discharging to the expectation of shareholders and stakeholders alike.”
The source said Raji’s revolution sent a strong signal to the directors that he was not ready to back down on his determination to run Odu’a with a different approach that will guarantee profitability and corporate governance.
As an indication to his determination to defeat public sector attitude to managing Odu’a, the GMD told the shareholders: “The company will continue to forge ahead in assimilating more private sector principles in organizational structure, benchmarks and performance measurements and develop more business models that leverage on the socio-economic competitiveness and comparative advantages of all South Western states.”
The directors, who are politicians, would not also allow Raji the freedom to change the culture. They saw his approach as ‘unacceptable’ and made efforts to stamp their authority as the board, which wields higher powers.
The board members opposed Raji’s proposals to stamp their authority. They kicked against his re-appointment for a second term.
It was learnt that some of them told their governors that Raji was incompetent and did not carry the board along in decision-making, adding that he did not deserve another term.
But the governors gave the GMD the opportunity to defend himself. He told his employers what he was facing and why he was being opposed and derided.
He used the opportunity of their quarterly meeting organised by the Development Agenda for Western Nigeria (DAWN) Commission to brief the governors on the efforts of his team and his vision for the company.
Raji told the governors that, unless the directors changed their perception of the company, Odu’a will not be able to deliver on its mandate as an investment arm of the states.
To resolve the debacle without being sentimental, the governors engaged KPMG, an international management consultancy firm, to audit and assess Raji’s five-year tenure.
The report of the audit, it was learnt, will guide the governors on whether to renew Raji’s mandate or seek for a replacement.
KPMG was engaged by the states for Raji’s recruitment in 2013-2014. He was given a six-month extension, pending the submission of the audit’s report last November. The report, Raji a pass mark.
The governors renewed his tenure in December, but when the board met later in the same month, it rejected the governor’s decision and refused to approve his appointment for a second term.
In a court case instituted by a citizen of one of the owner-states with the backing of some board members, he sought a stoppage of the governors’ decision on the strength of Raji’s alleged incompetence.
The suit wanted the board restrained from approving the governors’ decision based on the above argument.
On January 9, after they launched the Western Nigeria Security Network (WNSN), codenamed Operation Amotekun in Ibadan, the governor held an emergency meeting at the Office of Oyo State Governor.
The meeting, among others, reviewed the crisis rocking the conglomerate and decided that the directors must go.
They all agreed that, for Odu’a to achieve its goal, only a private sector operators with no political interest should be appointed as directors.
Last Friday’s meeting passed for the governors’ second quarter meeting during which they agreed to communicate the directors’ sack to them.