From the key role he played as chairman of the House Committee on Pension in 2004, in the enactment of the Pension Reform Act 2004, to his establishment of First Pension Guaranty (FPG) Limited, also in 2004, Hon Nze Chidi Duru has been a prominent figure in Nigeria’s pension industry. In this interview, he provides insights into the factors that led to the board squabbles in FGP, as well as allegations against his shareholding in the company, while also baring his mind on the performance of the pension industry.

By Babajide Komolafe & Elizabeth Adegbesan

THERE were allegations  that you undermined your fellow legislators who brought equity into First Guaranty Pension, that you didn’t make any contribution, you didn’t   pay your equity and that you changed some of the resolutions of the board. What is your position on these allegations?

It is impossible and I say it with every sense of responsibility, it is impossible for an individual be it Nze Chidi Duru or any other party not to have an investment in any PFA and yet the shares of a PFA are credited in his name. In the PRA that we innovated  or    for which I chaired      in the House of Representative and   which I also was    a joint chair in the Hamonisation Committee    of    the House and the Senate,    there were extant regulations that the National Pension Commission innovated,    in sense that for every investment of a shareholder in the industry whether it is a PFA or a PFC, that investment is subject to verification by the National Pension Commission and all those investment including the investment that was done by the shareholders of FGP was verified by the National Pension Commission.

Nze Chidi Duru

And I will also say with   respect to the case of FGP,    we were subjected to what we call stringent verification requirement,    because my investors,    when I started FGP as promoter –investor    in 2004, I went through series of   investor road show. In 2005 when I invited the second set of investors in FGP outside the first four investors I invited in 2004. Then in 2007 I invited the third round of investors in FGP and then in 2008 was when I invited the fourth and final investors in FGP.

So there were submissions that were done by the board and the management of FGP to regulators to verify the shares of these investors in FGP. And finally, 6th of February 2011, the total equity investment in FGP was verified by the regulator, the National Pension Commission and the letter was communicated not to the board but to the management of FGP verifying and approving the entire investment of the shareholders of FGP and that is on record. So I wonder how it has happened suddenly that Eze Duru did not make any investment in FGP and may have credited certain shares to himself without making any investment whereas, on record, in the writing of the regulator, the total number of shares of investors in FGP was documented and the letter was sent to the management of FGP on February 6, 2011.

What is your investment in FGP?

My total investment in FGP is slightly shy of N250 million, N249,460,186 as confirmed by PENCOM. And those investments or my investment were held in three vehicles, BP Outsourcing, which is my company; Grand Tower Plc, which is my company; and the other one is in my name which is Eze Chidi Duru. It is also important to highlight here that without   Eze Duru there would not have been    FGP.

It is my brain child, it is my sweat and it is my hard work and even in anywhere in the world,    it is also accepted that there is what is   called sweat equity,    assuming I didn’t put any cash in the business, which is not the   case. I put in cash in the business, I put in my time in the business and I put in my resources. I started the innovation of FGP effectively on May 2, 2004. It is actually historical because today is May 2.

That was when I started. By June 2004, I invited the first set of shareholders. We were four with me making the fifth person as the initial shareholders of FGP. Then on the 5th  of August 2004, I registered FGP, then the name was First Provident Trust Limited, that we later changed to FGP Limited and that was the genesis of FGP.

Then coming to the question of forgery, again it is pedantic; it also shows the personal agenda of Chinelo and her cohorts. If you can’t win through a legal means or going through the process of the court, you must then    find by all means anything to hang on one. It is impossible that one could have hoodwinked shareholders to now forge their    signatures. In the first instance I am not management, I am Vice Chairman of the board of FGP.

So I hold no executive powers. Who would take responsibility for documentations of the company and all of that is the management and we have it on record that the shareholders agreement that invited our foreign investors to invest in FGP, was a document that was properly presented to the management, approved by the management, discussed by the management; I recommended to the board and which the board agreed on. But something that was very interesting, that agreement was not authored in September, 2008 and upon the management representing to the board that they have received the entire signatures of all the shareholders of FGP.

My chairman fastidiously, in our board meeting of  November 13, 2008, recommended to the meeting that we have our next AGM on January 19, 2009 and that he would rather submit to the question of the appropriateness or otherwise of allowing our   foreign investors to invest in FGP to the AGM.

That yes, he do agree, looking at the papers that   he    has    before him that our foreign investors or the shareholders may have signed to agree on their investment but that he would rather that we sit in a meeting where he will explain the implications of the investment of the    foreign investors      in FGP because the obvious implication is that if we do allow them to invest in FGP at par value price, what it then means is that each and every one of us will be diluted as a result of their investment. And he wanted the shareholders to be aware of that.

So he took that shareholders agreement and packed it aside. And when we held our AGM the next year which was two months away from our board meeting which was January 19th, 2009, the discussion of that AGM was dominated primarily by the agenda of   whether to allow our foreign investors, Novera, whether to invest in FGP or not, but at the end of the meeting, at the end of the discussion,    the shareholders voted unanimously without a dissenting voice to allow that investment and with that investment it was not until then that the investment of Novare was accepted in FGP and the appropriate filing now made at CAC.

If there was a need to forge a corporate document, if there was a need to suppress facts, I am not so sure that the board would have presented that shareholders agreement or subjected it to any further discussion at the AGM. And it was after the AGM cleared that investment, that that happen.

Before our foreign partners invested in FGP, my cumulative shares in FGP was a cumulative of slightly shy of 50%, 48% of the shares of FGP with the investment of our foreign partners, Novare    into FGP,    each and every shareholder of FGP, their shares were diluted. They bought in into the business and as a consequence of that we were diluted. My shareholding in FGP was diluted down to 31% as was the other shares of the other shareholders of FGP.

What again was so interesting, the reason why with the advice of Chinelo, then as Company Secretary, Legal Adviser of National Pension Commission to the board of National Pension Commission not to submit their concocted so called examination report to the board of FGP and there at to the shareholders of FGP was that she recognized that if the report is submitted to the board and then to the shareholders of FGP that      the shareholders on our side, who  constitute the majority of the shareholders, hold 82 percent of the shares of FGP and therefore there was no way that their so called Target examination report would see the light of the day because we will give it a dispassionate objective assessment before taking a decision on that target examination report.

So what they did was to do a quick fix    by incentivising and encouraging a descent of insignificant shareholders of the company, I will    rather tagged that as insignificant shareholders,    of less than 9 shareholders    out 37 shareholders of FGP to work with them with a promise of offering them chairman, board member of FGP. And when you put their total number of shares it was less than 18% and by the time we subjected this to interrogation, that minority shareholders working in concert with the regulator cannot intimidate or hold hostage the majority shareholders of the company.

What the regulator now did was to tagged this 9 shareholders as significant shareholders and it was these  shareholders that the regulators were holding continuous meeting with on how to take over FGP from the legitimate shareholders of the company and it is regrettable that in the last six years, that    working with these shareholders and their so called interim management committee that they have imposed on FGP they have ran this business with the exclusion of the majority shareholders and the owners of the business.

What is the current equity structure of the company?

The equity structure still rest in the hands of the majority of shareholders and it is again on that account that Chinelo Anohu has consistently refused to call an AGM or EGM of FGP till date. I understand the reason given is very simple. She knows as a fact if she had called a meeting of the shareholders of    FGP,    that the owners of the business will take back their company.

Looking forward, how close are you to taking back possession of the company?

Extremely very close. We are still waiting for the Chairman of the company who is currently oversees to come back and I believe he would come back in the next few days. I also know that the man that has been appointed as the current DG of National Pension Commission would not be as reckless as the former DG was and I believe that he would like to play by the rules and by the book and concern himself with being a regulator rather than being an operator. He has being an operator in the last twelve years,    now he is promoted to being a regulator.

What is your assessment of the pension industry in the last three years?

In the first instance, if you note my mark-up book in 2004 when we were passing the Pension Reform Act of 2004, you will find in that mark-up book that 10 years post enactment of the industry, that the industry, the asset under management of the industry in 2014 would be around about N30 trillion and that was what the mark-up was and that was the conservative recommendation of the experts that worked with me as chairman of the House Committee on Privatization.

And secondly,    that the industry will also move towards what pension asset are used for in any other part of the world, which is for infrastructure development and generating employment. The more pension asset are used for long term development and infrastructure, the more they create employment and the more the asset under management grow sporadically because that is where you make your money.

But rather than do that what we have witnessed in the last twelve years,    post enactment of the bill,    is that the asset under management are only utilized for short time investment and commercial papers and investment in stock exchange. There is no real creativity in that,    and the growth from N2.5 trillion when Chinelo took over from the last administration to N7 trillion when she left cannot be by any stretch    of imagination be credited to her.

Because in the first instance, these are contributions    that workers contribute when they get their salaries    and essentially, all the staff that were captured in the industry were basically people from the government sector, very few    private sector. And in our mark-up then, a lot of the contributions will come from the unorganised private sector. You know it, I know it that the organised private sector is not where the captive market would be, the captive market will come from the unorganised private sector.

And therefore, a structure ought to be put in place, would have been put in place to attract the unorganised private sector and bring them; to that extent, we will now began to see the growth in the asset under management. As at 2017, one would have seen a growth close to N37 trillion if the right things were done.