There seems to be no end in the battle for the soul of Abuja based construction giant, Setraco as, its Nigerian shareholders have raised an alarm over a plot by their Lebanese partner, Mr. Said Fayez Khalaf, to assume the status of majority shareholder in the firm.
Frontline News Online gathered that clandestine moves by Khalaf to take over the company from his Nigerian partner, the late Alhaji Inu Umoru, has resulted in a lingering crisis in the top management of the construction company.
Documents, detailing the registration of the company on 24th August 1977, indicated that the company was initially incorporated as Umoru-Khalaf Engineering and Contracting Company Limited, with the two subscribers, Umoru and Khalaf, holding 70% and 30% shares respectively.
Alhaji Inu Umoru reportedly sourced all the initial businesses of the company and, in addition, provided the entire initial capital for the start-up.
Available documents, show that the shareholding structure was altered in the ratio of 60:40 for Umoru and Khalaf respectively following a name change in 1978 to Setraco Nigeria Limited (SNL).
The once smooth business relationship that existed between them reportedly experienced a down turn in 1989, according to an insider source, who is knowledgeable about it, “when Engineer Khalaf started taking advantage of Alhaji Umoru’s trust and illiteracy by making clandestine plans to acquire the majority stake in the company.”
The source said: “as far back as 1989, Khalaf engineered separate increases in SNL’s shares to selfishly accommodate the sole increase to his own shareholding. Early indications of Engineer Khalaf’s callous plans include dubiously convincing Alhaji Inu Umoru to set aside 6% of his shares without compensation to a proposed ‘Employee Trust Scheme’, which never materialized.
“The 6% shares”, according to the source, “eventually ended up being part of Engineer Khalaf’s shareholding.”
Sundry sources confirmed that Khalaf implemented a process that was alien to Nigeria’s corporate law when by a purported “redistribution of the company’s shares” vide an agreement dated 28th September 2004, he caused Alhaji Inu Umoru to further set aside 14% of his shares for redistribution to other Lebanese directors, who were his proxies, as a way of securing their loyalty to the company.
These setting aside of shares by Alhaji Inu Umoru were done in trust with a view to having equal number of representatives on the board of the Company for the purpose of having a balance of power (between the founding partners); while the employee directors were to play neutral / mediatory role.
It was gathered that Alhaji Inu Umoru was never compensated for either the 6% or the 14% that formed part of his original 60% shares.
Unfortunately, paper trails reportedly confirmed that the transfer of the shares by Engr. Khalaf to his shell company was effected, even before the agreement, which purportedly formalized the illegal act was executed.
The process, according to a source, that converted the founding majority shareholder of the company to a minority shareholder was executed through an agreement that was described as invalidly executed by the Umorus’ because “it was devoid of a Jurat as required by the Nigerian law for the execution of contracts by illiterate persons.”
In spite of the redistributed shares in favour of Khalaf, he was said to have strategically refrained from implementing equal representation on the board but maintained Alhaji Inu Umoru as Chairman because of his overarching influence as a citizen and a well-established businessman with good business contacts; which he deployed in driving the company’s businesses towards profitability.
A source explained that his ploy to fully take over the Company would have been very obvious, challenged and defeated if he had pushed for it.
There are also allegations that Khalaf has over time appointed people loyal to his such as his, cousins, nephews and in-laws, over tested professionals for key positions in the company and ultimately succeeded in running the company as a one-man business, converting the assets, its businesses and finances to personal ends.
According to a source, “This state of affairs persisted for over a decade during which time the company was effectively run aground and rendered hugely indebted,” adding that “this was the same state of affairs that Chief Abu Inu Umoru, the son of the late Alhaji Inu Umoru, met when he became chairman of the Board of the Company in October 2009, following the death of his father in August 2009.”
Chief Abu Inu Umoru’s ascension to the board Chairmanship with obvious implications for the Company’s future direction as he was said to have insisted on proper corporate governance, ethics and emplacement of due processes and procedures led to the unfolding desperate plot by Khalaf and his Lebanese cohorts to either take over the company completely or have it sunk.
It was gathered that Khalaf adopted a strategy of ensuring that only foreigners with allegiance to him were engaged as financial controllers. This situation, it was confirmed by another source, persisted until 2016 when Chief Abu Inu Umoru insisted that the trend must be reversed.
The source disclosed how the appointment of a Nigerian financial controller in 2016 led to the uncovering of mind-boggling details of financial improprieties, malpractices and managerial insider abuses allegedly engineered by Khalaf and his cronies for about four decades.
Investigations at the SNL office in Abuja, following a series of newspaper advertisements by Raja Touma and Tania Khalaf, purporting to be directors of the company and claiming to be majority shareholders, showed that the Inu Umorus had already sued Khalaf at a Federal High Court in Abuja.
The Inu Umoru family is represented by Dr Mike Ozekhome (SAN) and Damian Dodo (SAN) in a suit marked: FHC/ABJ/PET/6/2018.
The family, as learnt, is specifically challenging the alleged dubious process by which Khalaf acquired the majority stake in SNL and pressing claims against Khalaf for civil fraud and seeking declaratory and injunctive reliefs against some specific actions and transactions.