1 of 2
Gboyega Nasir Isiaka
2 of 2
Mrs Kemi Adeosun - Ogun State Commissioner for Finance
By Gboyega Nasir Isiaka
My attention has been drawn to a premeditated misinformation spewn by the Ogun State Commissioner for Finance, Mrs. Kemi Adeosun during her appearance before the State House of Assembly on Wednesday 12th of February, 2014, to defend yet another loan that the State government wants to obtain which is to the tune of N19B (Nineteen billion naira).
I have no cause to join issues with her as regards the mission to the legislative chamber had she stayed within the purview of her objectives but rather, in a morbid bid to justify the pervasive and now well-established poor management of the State's resources, she played to the gallery by saying, “Gateway Holdings at the twilight of the last administration obtained (for the purpose of building its head office) a N2.8billion loan for which they couldn't find the site of the structure”; among other claims.
Let it be stated emphatically that her submission as usual, is a huge lie and a deliberately crafted falsehood consciously weaved to misinform the OGHA and indeed Ogun people in order to befuddle them from querying their latest loan gambit. Contrary to Adeosun's claim, such a figure does not exist as the following information will show. Gateway Holdings started operations in 2004 and by 2008, it had substantially raised the investment profile of the State and paid dividend income in excess of N1.5billion to the coffers of the State, the first time in the history of the State.
In 2008, the management of the Company saw the need to significantly increase its working capital especially to support its subsidiaries and also opted to diversify its investment portfolio by constructing a 12 storey building to house the permanent location of the Abeokuta branch of the Nigerian Stock Exchange, utilise a maximum of 4 floors for itself and subsidiaries while generating income by leasing the remaining floors to companies who were being encouraged to move their offices to Ogun State. I can recall that a few of such businesses whom the State Government has driven away with its vendetta actions had already indicated interest at the time.
Consequently and typical of investment companies all over the world who seek to leverage on its positions if and when necessary, Gateway Holdings Ltd. (GHL) applied for a loan from Sterling Bank Plc. The loan was subsequently approved and a sum of N1.5billion was drawn in two tranches of N1billion on 29th September, 2008 and N500million on 17th October, 2008. The facility was applied for the purpose meant including acquisition of additional shares in the capital market, recapitalisation of Gateway Savings and Loans and working capital support for subsidiaries such as Gateway Oil & Gas.
The details of these would have been available to Mrs. Adeosun as the State Commissioner of Finance and Chairperson and/or member of the management board of Gateway Holdings in the last two years or thereabout. It will be recalled that Gateway Savings and Loans was set up by GHL two years earlier to support the house ownership initiative of government and it needed recapitalisation at that time to enhance its capacity to provide support for Ogun State workers.
We have it on good authority that riding on these background work and structure, the Amosun administration recently sourced and obtained a 1billion housing loan and rather than building on the achievement of the last administration, it recently demolished over 300 uncompleted houses in the Workers Estate since anything relating to the last administration must first be destroyed and then re-awarded in order to create enough “jobs” for the boys.
Out of the N1.5billion Sterling bank loan drawdown, only a sum of N483million was disbursed on account of construction of head office project including fees to professional firms. In its letter dated 17th October, 2011, the contractor in charge of the project put the value of the work done on the site and other claims at N652million as at that date and the letter was sent to all professional parties involved as well as Gateway Holdings.
The State Government clearly sees the need for additional office complexes in Abeokuta which is why it embarked on a voyage to Malaysia and other places recently to seek for contractor financiers (as usual) to build a 60 storey building in our dear capital city. However, we would have thought that since government is supposed to be a continuum, this 12 storey building would be completed and government can then seek for its usual contractor financiers to construct additional 48storey building to complete the 60 floors so desperately needed.
Meanwhile, the initial projections of GHL to pay back from capital market gains fell flat as a result of the widely known crash of the capital market. Also, one of the Company’s sources of getting a breather or bridge from the equipment hiring operations of Plantgate Equipment Hire Service, the then subsidiary of GHL did not materialise as unpaid bills to Plantgate at the time from the State Govt ministries/agencies was in excess of One billion naira. As a result, we requested and convinced the State government to include the outstanding amount and indeed the entire funding of the head office complex in the then proposed State Bond with the proviso that Gateway Holdings will subsequently pay back from its revenue from the head office complex and other internally generated sources especially when we hope the capital market would have rebounded and the various initiatives of the company and subsidiaries would have been generating cash.
The documents of the then proposed State Bond already approved by The Nigerian Stock Exchange at that time are available at The Exchange to verify this claim. These would have given us the benefit of refinancing the facility and the construction of the head office with a cheaper fund repayable over a longer time and also given us the required breather to pursue other initiatives and possible opportunities. But alas, we all recall how that bond was scuttled by detractors of State including Sen. Ibikunle Amosun who took newspaper advertisements to label the bond, “bond of bondage” and promised never to take any loan or bond if elected as governor of the State. We now know better!
I also understand the Commissioner commented that Gateway Holdings is a problem child of the administration. While I do not have issues with the administration on this comment as it has the prerogative to classify and reclassify its agencies at it wishes, I only wonder whether the parent of this problem child is giving the needed assistance, support or encouragement to revive “the child” or indeed compounding its problems to score cheap political points.
For instance, I am aware that Sterling Bank some time ago had an understanding with the so called problem child to start servicing the facility from its sand dredging business which “the child” on its own designed and got licenses from the Federal Ministry of Mines some six years ago. But alas, as this arrangement was about to take off, the State Government transferred the entire operation of sand dredging to the State Ministry of Commerce and Industry.
This is in addition to carving out the Plantgate Equipment Hire Service operations from the Company. Our suspicion is that this is all a calculated attempt to call a dog a bad name in order to hang it.
Pray therefore, where did Mrs. Adeosun get the N2.8billion phantom figure as loan obtained for head office project. If as a result of accumulated charges, interest, penalties as well as booking or rebooking of the facility by the bank to meet regulatory or prudential provisions, the figure has risen from the N1.5billion principal drawdown, I am sure Mrs. Adeosun is knowledgeable enough to know that does not in any way negate the original principal drawdown on the facility and smart enough to know that you do not discuss a liability without looking at the assets and potential revenue stream or other opportunities created with the liabilities.
Also, how is a facility drawn down in 2008 become obtainable at the twilight of the administration that exited in May 2011. So shocking was the statement by Mrs. Adeosun (a member or is it Chairman of the management board of GHL) before the State Assembly that, she has searched all over Abeokuta but couldn’t find the foundation of the GHL head office structure only for the government to return the next day with pictures of the same structure singing a new song that the work doesn't reflect the phantom N2.8billion loan.
The figures of disbursement stated herein and the value of work done must have clarified this claim. This nauseating somersault is now constant with both Mrs. Adeosun and her boss; as their predilection for giving different debt figures at different fora is now legendary. It is sad that people who come into public office from the private sector should now descend low into the murky waters of lies and innuendoes just to gain cheap political capital.
I indeed sympathize with Mrs. Adeosun for acting the script of a sinking regime.
There is also the allegation that the account of Gateway Holdings has never been audited or something close to that. This is far from the truth. I know for a fact that the account of the Company was audited up to the period ending December 2010. I quit the service of the Company in June 2010.
This is aside from various other audits and/or investigations which the State Government has launched since it assumed office including the audit by the respectable firm of Ernst and Young which went through the records of GHL for over three months in 2011/2012; and the firm of RiverBank Capital Ltd which was engaged for due diligence reviews to mention but a few - costing the government millions of Naira.
Conclusively, it is high time that the current administration in Ogun State lays to rest its sardonic and maniacal hunting for what is non-existent in GHL especially during the interval under consideration. It must be stated for the umpteenth time that, GHL has been the most investigated of all MDA's in Ogun State since the advent of the Amosun regime; yet, it has yet to find or record any infraction against the management under my leadership. Aside from the various audits and investigations mentioned above, it will be recalled that I went through a torrid time defending my action while at the helm of the organisation, at the Hon. Remy Hassan-led House of Assembly probe panel at the early part of the administration.
I am happy the revered honourable member of the assembly now knows better. The same thing happened when I sat through five consecutive days answering questions at the Justice Abiodun Akinyemi Judicial Panel of Inquiry into land matter. In both situations, I left the venues with my head high up and more convinced and assured that I indeed served the State creditably well and to the best of my abilities. Over time too, other management staff of GHL have been grilled by the anti-corruption agencies, combing all the books; yet, nothing incriminating has been found.
Finally, I reiterate that Gateway Holdings never took the figure that was so unashamedly propagated by the Finance Commissioner. While the present administration in the State is chasing shadows and searching for what is not lost all over the place, the State is losing such life changing investments like the Deep Sea Port and the multi-billion dollar refinery project earmarked for the Olokola Free Trade Zone to Lekki Free Trade Zone.
It is disturbing that this State Government after getting a mandate from the people will instead of facing the business of governance be busy playing politics with the future of the State and continuously endangering the welfare of our future generations. Ogun people are no longer fooled by the constant noise of debts owed by the previous government while the Amosun regime is daily piling humongous debts and currently immersed in a systemic pilfering of our collective patrimony on the altar of sadistic and self-aggrandising projects that have killed the State's economy, eroded the people's livelihood leaving them impoverished and socially displaced.
Ogun people will not continue to be taken for a ride by a totalitarian and Machiavellian regime bent on repaying the masses with evil for the electoral goodies given the Governor in 2011. I am still consulting on the ongoing debacle and will not hesitate to take necessary legal action should the State Government not desist in its ridiculously embarrassing habit of smear campaign against my person as it relates to my service to the government and good people of Ogun State.
Thank you.
* Gboyega Nasir Isiaka B.Sc, MBA, ACS, FCA, was Managing Director of Ogun State government-owned Gateway Holdings Limited; and the gubernatorial candidate of the Peoples Party of Nigeria (PPN) in Nigeria's Ogun State during the 2011 elections.