I ALWAYS KNEW THERE WAS MORE TO THE DANGOTE - OTEDOLA WAR

Editorial - Access Bank Plc vs. AP Plc (Suit No. FHC/L/CS/644/09)

"Our successes and our failures in life can be traced to how well or how badly we deal with the inevitable conflicts that society presents us."

The publication of the application for winding up proceedings against AP Plc by Access Bank Plc based on a motion ex-parte issued on July 13, 2009 represents a ‘conflict’ the Nigerian financial market would have to watch keenly as a test of its resolve to truly move into a regime of sound corporate governance, improved disclosures and a culture of best practice risk management by all quoted firms; and not just our banks.

The development offers much more.

It brings to fore the following concerns:
The recurring status of AP Plc as the poster boy of major issues in the market –

o The Retired Justice Ekop Commission of Enquiry (2002-2003) investigated the privatization of AP Plc and its many fallouts.

o During its sittings, it subpoenaed Alhaji Abba Gana, then MD/CEO of AP Plc who obtained a court injunction that enabled him not to appear before the commission to answer allegations on the handling, mechanism and management of the firm prior to privatization.

o The enquiry invited fourteen (14) banks who appeared before the commission as well as NNPC and the BPE.
oThe issues at stake focused on the alleged N23bn hidden debt not disclosed during the privatization of the company,

http://www.proshareng.com/news/singleNews.php?id=7191

The matter above is a mere business dispute and no inference of any other personal problems which the chairman of AP Plc may or may not have with Aliko Dangote does not have a place here. Indeed the article expands the issues relating to AP as a matter beyond the Access bank issue.

Why that is so is something I am leaning about but if I am right, i would like to think the emphasis is on the need for this quoted company to get its act right which it has been doing, i would suppose, under the current leadership.

This is food for thought but hope that it is resolved amicably to protect investors. Everything right now is not so black and white anymore. Why? Where are the elders and leaders of thought in the market? This should hopefully pass away and lessons learnt.

I stand to be corrected.

However, I've been following developments of Dangote and Otedola's dispute and knew that it would attract more trouble and inadvertently further affect the AP share price.

I believe Nigerian investors are been treated unfairly.

PROSHARE BREAKING NEWS: AP Plc pays off $35M DEBT to ACCESS BANK

Lagos, Nigeria, August 4, 2009, 1512hrs: The dispute between Access Bank and African Petroleum (AP)Plc, over AP’s delay in paying its outstanding $35 million (about N5.6 billion) loan facility to the bank has ended amicably.This afternoon, African Petroleum Plc issued an Afribank draft number 381342 dated 4/08/09 for the sum of N2, 945, 305,039.69 in favour of Access Bank Plc.

Going by the agreement mutually entered into by the parties, the $35,153,822.15 debt amounts to N4,499,689,235.20 at an agreed rate of N128/$. The value of the draft represents net settlement after taking into consideration AP’s credit balance of N1, 554, 384, 195.51 on its account with the bank.

The work-out plan drawn up, delayed by a day has now been met in full and AP Plc has discharged its obligations under the agreement.

You will recall that this approach was discussed in our article titled Crisis management and resolution: Wind-ups or Work-outs? (http://www.proshareng.com/articles/index.php) published on Friday, July 31, 2009.

This development is welcome and the import of the resolution commended for all parties in similar disputes that will occur as we wade through this difficult times.

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