How Tony Elumelu betrayed me – Otedola

Nigerian billionaire businessman, Femi Otedola, has opened up on his long-time business relationship with Tony Elumelu, Transcorp Plc Chairman, alleging that the founder of Tony Elumelu Foundation betrayed him on different occasions.

Otedola made the revelation while speaking on his move to buy Transcorp, a conglomerate whose 5.5 per cent shares he recently acquired.

Days after Otedola’s acquisition, Elumelu increased his own shares in the same company from 2.07 to over 25 per cent.

Otedola said he had wanted to buy the company with a view to unlocking its full potential and creating values for the shareholders, but his offer was rejected.

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“I offered to buy Transcorp Plc for N250 billion, but unfortunately, my offer was rejected,” he said in a statement released to Premium Times.

In the statement, Otedola recalled how he “enthusiastically gave him (Mr Elumelu) $ 20 million, which was N2 billion at that time” to buy the necessary shares for the acquisition of UBA in 2005, alleging that Elumelu betrayed him in the end.

The statement read in part, “In 2005, while Tony was the Managing Director of Standard Trust Bank he approached me to get funds to acquire UBA. I enthusiastically gave him $ 20 million, which was N2 billion at that time to buy the necessary shares in UBA for the acquisition. After a short period of time the share price moved up and I decided it was a good moment to sell and get out of the bank. However, Tony appealed to me to hold on to the shares as he was convinced that there were future prospects – so I kept the shares.

“I became Chairman of Transcorp Hotel in 2007 with a shareholding of 5% and unknowingly Tony gradually started buying shares quietly. By the following year in 2008 I went bankrupt in Nigeria. Tony proceeded to take my shares in UBA to service the interest on my loans and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder.

“Shortly after, Albert Okumagba informed me that an American firm wanted to acquire my shares in Transcorp, which I then agreed to sell. However, this supposed American firm turned out to be Tony Elumelu. The revelation of this prompted me to resign as Chairman of the hotel.”

Otedola said years later in 2012, he told Elumelu about his interest in Ughelli Power Plant and the Transcorp chair “quietly went ahead” to outbid him in the acquisition of the plant.

“Tony said he wanted to see me so we met in my office where I had previously had a meeting with foreign investors who had not yet departed the premises. Curious to know, he asked what sort of meeting I had had and I disclosed that I wanted to go into the power business, specifically Ughelli Power Plant. Tony quietly went ahead to bid for Ughelli and he outbidded me by offering to buy the plant for $300million,” he added.

Otedola said his goal was to maximize Transcorp’s potential as a Nigerian conglomerate with a market cap of at least N2 trillion instead of the current N40 billion, but it seems some shareholders have a different vision.

He said, “As a businessman, I believe in healthy competition and market dynamics. Two captains cannot man a ship, and I respect the majority shareholder’s decision to buy me out. This is the nature of the game.

“But let me be clear: my offer was made with the best intentions for Transcorp Plc and its shareholders. I saw an opportunity to unlock the company’s full potential and create value for everyone involved.

“It’s important for investors to understand that free entry and free exit are crucial to healthy markets. The scramble for shares after my acquisition is a testament to the value that Transcorp Plc can offer, and I hope the company continues to thrive under new leadership.

“My message to Transcorp Plc and its shareholders is this: I remain committed to the growth and success of Nigerian businesses, and I will always be looking for ways to create value for all stakeholders. Stakeholders are unfortunately always shortchanged by getting stipends while the owners and managers of the business live a jet-set lifestyle, which is detrimental to the stakeholders. Thank you for the opportunity to engage in this exciting chapter of Transcorp’s history.”