Former member of the House of Representatives, Nze Chidi Duru in this interview gives his view on the issues at play in the struggle for control of the First Guarantee Pensions Limited. Excerpts:

By Emmanuel Aziken

TELL us about the First Guarantee Pensions Limited (FGPL). How did it come about?

The license of First Guarantee Pensions Limited (FGPL) was given to me in recognition of the work that one did in bringing to fruition the Pension Reform Act of 2004 which could be said to be my Bill in the National Assembly. I championed, promoted and canvassed it and I got my colleagues to buy into it even though it was an executive Bill.

It was passed and Fola Adeola who was then the chairman of the steering committee of the National Pensions Committee was so excited and so pleased with the hard work that was done in bringing this to fruition that one was encouraged to consider the possibility of also being a player in the industry.

Chidi Duru

I chose the Pension Fund Administration arm of the industry because there were basically two arms that one could participate in – the Pension Custodian for which you were required to have about N1 billion to be a Custodian or you become a Pension Fund Administrator for which the share capital was N150 million.

Generation of  shareholders

I applied and was granted a license as one of the players in the PFA industry and the name of my company then was the First Guarantee Pension Limited and we had first, second and third generation of shareholders. Eventually, we were 37 shareholders that I brought together to be able to promote FGPL as a business.

Who were the first generation shareholders and when did they buy into the company?

We started the process of incorporating FGPL in 2004. Our original document will show myself as the promoter, Nnamdi Anama, Mrs Opara, who is the wife of Austin Opara, Dr Abba Aji, who was my colleague in the National Assembly (a Senator), who was the chairman of the Senate Committee on Establishment and Labour and finally Tsegba Terngu. These were the five initial names that were part and parcel of the start-off of First Guarantee Pension. Incidentally, Senator Abba Aji did not eventually invest in the business. So, the next generation of shareholders took the number to 31 and the third generation of shareholders that came took the number of shareholders to 37.

So, what is the problem bedevilling FGPL all about? When did it start?

The problem began in 2010 when in my view, the FGPL became a profitable business. Before then, it was struggling because, we did not have the required assets under management and asset under management is what will make you to receive the necessary return on commission for managing those assets. So, it was a long process of having a large pool of assets under management to be able to become profitable.

We invited a group from South Africa, Novare, to invest in FGPL and they invested a total sum of N224 million staggered over a period. But what was more important was the technical skill that was also brought into FGPL and with my help in bringing in contributors, in 2010, the business became profitable and paid its first dividend.

On February 23, 2011, PenCom presented to us in our Board meeting what is usually their annual report which is their annual view of the performance of each PFA and we were categorized as the most improved PFA for the preceding year which was 2010 and every Director was very happy with that and we took the good news to the shareholders that not only were they having dividend for the first time, but the PFA has been categorized as having massively improved.

To our surprise, on March 22, 2011, the same PenCom wrote us a letter that they would like to undertake what they call target examination. That was barely one month after and that was very strange. Our managing director then, Mr. Wilson Ideva, had been relieved of his office for acts that bordered on insubordination. And they did the target examination and when they wrote the report, which they presented to the board in June 2011, the board members queried it and brought to their attention that under the Pension Reform Act, what is required is that if a report is done by the regulator, that report will be submitted to the directors, and the directors are bound under the law to submit that report to the shareholders. And the shareholders would vote on it and whatever is the outcome of that vote becomes  the decision of the company. But they didn’t allow us to go through that process. They wanted to ram the target report down the throat of the shareholders.

What was in the target report?

The target report queried the way and manner First Guarantee Pension Limited was being run. They also reported that one of the committees, Executive Management Committees, that the board used to have  an oversight function management was one committee too many and was getting more involved in the oversight of the company which was not true because the oversight function of the management committee was to help the management to become profitable, well run and organized and the result began to show in 2010 when the company for the first time became profitable and the company was categorized as the most improved PFA.

One other thing that was contained in the report has to do with the issue that the meetings of the board were becoming too many, that we had six meetings. It also said the chairman of the company could not have been chairman because he had insignificant shares which we didn’t think was necessary because that is why we have independent directors but the chairman who has over N20 million worth of shares of the company could not be said to be a chairman with insignificant shares. The article and memorandum of association didn’t provide for a share qualification to even be on the board not to talk of a share qualification to be the chairman.

These were some of the things that were contained in the report which we did not agree with and we went to court in August 2011 and effective August 11, 2011, Justice D U. Okorowo of the Federal High Court in Abuja issued an ex-parte order restraining Pencom from implementing that target report pending the hearing and determination of the substantive suit. Notwithstanding this clear ex-parte order, PenCom still went ahead on August 15, 2011 to dissolve the board of First Guarantee Pension Limited and appointed an interim management, which is still running the company till today.

Interim  management

We felt outraged. My partners from South Africa felt outraged and the shareholders were bemused by this current state of affairs and petitioned the office of the Attorney general of the Federation and Minister of Justice, Mohammed Bello Adoke, in this disrespect for court order. The Attorney General then wrote two letters on August 18, 2011 and September 8, 2011 to PenCom telling them to obey the orders of Justice D.U. Okorowo and revert back to status quo, allow the board to continue to function, and more importantly dismantle the interim management that was appointed in FGPL.

But like the fate of the ex-parte order, the two letters from the Attorney General were also discountenanced and no step was taken in that direction to reverse those decisions.

However, on June 18, 2012, Justice Okorowo, having now heard all the parties gave a full judgment, 132 pages, on the matter that was before him and upbraided PenCom for acting above the law and not obeying court order and now ordered that the interim management be removed and specifically requested the office of the Commissioner of Police, Lagos where we have our head office and the Police Commissioner in Abuja to enable the board members to move back and take over their business.

As I speak with you today, that order has not been implemented, and the original directors are still operating outside the company, just as the shareholders and we have not had any annual general meeting of the company in the last six years. PenCom is still managing the company as it is.

So, why was your sister arrested and detained by the EFCC? Has it anything to do with this crisis?

On October 3, 2011, which was a public holiday, EFCC operatives invaded my house and requested my presence in their office. I never received any invitation from them before then. And I was taken to their office and there I was presented with a petition written by Kashim Ibrahim Imam, asking the EFCC to implement the target report that was written by PenCom. For me, that was a surprise because here was a target report for which Justice Okorowo had given an order of court saying, do not implement this report pending the determination of the substantive suit.

Side-stepping a judgment

And it was also very interesting because in the same August, Kashim and five other shareholders out of the 37 shareholders had also gone to a Federal High Court in Abuja, seeking for an order of mandamus to compel the EFCC to investigate the target report issued by PenCom and the court in its wisdom suspended that application as being an abuse of court process since there is already a judgment of the court.

The court told them that they cannot side-step a judgment of the court to now order EFCC to investigate the target report that the court had already said was ineffectual, ineffective pending the determination of the case.

I was kept there overnight and on  October 4, my sister, Mrs. Christy Ekweonu, and Mr. Ken Nwanze came to bail me. We thought that was the end of the matter because the panel that the EFCC set up to look into the matter concluded that it was actually a business transaction among partners that had gone wrong and has no business being before the EFCC.

However, we now realized that in 2012, immediately Justice Okorowo gave the full judgment nullifying the target report and mandating PenCom to hand back the business to the original directors and shareholders, and we were poised to take over the business and indeed did apply to the Commissioner of Police Lagos and Abuja as was contained in the judgment of Justice Okorowo to help us take back our business, a lot of activities began to happen.

One of the charges they brought before the magistrate court in Abuja was the forgery of the signature of Alhai Kashim Ibrahim Imam forged in the shareholders agreement to admit the investment of our partners from South Africa into First Guarantee Pension Limited. For me that was surprising because, first, I am not the management, second I have no role to play in it.

However, I recall that on November 13, 2008 when the then Managing Director presented to the board that the shareholders agreement permitting the investment of Novare into First Guarantee Pension, had been signed by the shareholders (there are two ways to obtain the agreement of shareholders – either by all the shareholders signing by what we call round ribbon or at a general meeting of the shareholders) but this process was done through round ribbon. The chairman in his considered wisdom at that meeting said that since we have an AGM of the company coming up on January 19, 2009, he would prefer that the question of investment of Novare be tabled and discussed at the AGM. He said that why he agrees with the Managing Director and Secretary that Novare had met every condition necessary for a resolution of the shareholders to admit Novare into First Guarantee Pension Limited but that we have nothing to lose if we wait for the next two months to take the matter to a general meeting of the shareholders. And that was carried as a resolution of the board.

In the January 19, 2009 shareholders meeting, the chairman made a profound statement that he had been advised that with the shareholders agreement as signed, we had met the requirement to admit Novare, but that he would like to keep the document aside, because he wanted the shareholders to understand what they had signed which would dilute their shareholding because when Novare invests into First Guarantee Pension Limited, if you own 18 percent for instance, it will now come down to 15 percent.

The matter was discussed extensively. In fact, if we spent 10 minutes at that AGM, eight minutes were devoted to the issue of Novare’s investment. But at the end of the day, unanimously, without any dissenting vote, Novare was admitted to invest in First Guarantee Pension. It was the resolution of that meeting that was filed with the CAC admitting the investment of Novare into FGPL.

So, this was a resolution of the shareholders at the general meeting. If anybody knew that his signature was forged or he didn’t agree with it, he could have raised it at the AGM. So, this is what I was charged with in Abuja and the judge quashed that charge.

You have also petitioned President Muhammadu Buhari on this matter?

Yes, when it became very clear that the person behind all these, Kashim Imam, appeared to be very strong with his view and the pressure that he is mounting, I had no choice than to petition the president on  April 22, this year to say that my life was in danger and I needed his protection.

I had no choice than to cry out to the president. With the Attorney General writing to the EFCC on  April 6  and a reminder on  April 22, and yet the incessant calls, intimidation, my movement being monitored around town, my family being put under undue pressure, in fact, two days ago, they even went to pick my wife, and this is the kind of pressure that one has been under in the last two months, I had no choice than to petition the president and I told him that my life was in danger.

If anything happens to me or my family, then these are the people who did it. That was what I told him in the petition.

Did you get any response from the President?

No response yet. I am informed that the chairman of the EFCC may not be aware of what is currently going on and I am hoping that if that is so, the press statement we issued appealing to him to look into the matter will enable him to intervene and then unravel what is going on.

File: aziken, may 31