There was a dramatic twist on Wednesday to the dispute between the President and Chief Executive Officer of Dangote Group, Alhaji Aliko Dangote, and the Chairman of African Petroleum Plc., Mr. Femi Otedola, over the alleged manipulation of AP shares price.
In the middle of a tension-soaked hall at the House of Representatives in Abuja, the two multi-billionaires shook hands and pledged to resolve their differences amicably in the interest of other Nigerians.
They also addressed each other as “my dear brother”, cutting short what was initially expected to be a long public hearing into the crisis by the House Committee on Capital Market headed by Alhaji Ahmed Wadada.
The exchange of pleasantaries was done following an appeal by Wadada to both men to re-ignite their “friendship and brotherly love.”
Before Wadada’s call, Dangote and Otedola, who were on March 12,2009, listed as 261st and 601st richest men in the world by Forbes magazine, had avoided each other when they entered the hall.
They had shaken hands with all the dignitaries present in turn but deliberately avoided each other.
The AP chairman had petitioned the House complaining that Nova Finance and Securities and Dangote manipulated the shares price of the oil company, urging the committee to investigate the matter.
But when he was called to the rostrum on Wednesday to defend his petition, Otedola told the committee that he was satisfied by an earlier decision on the issue by the Securities and Exchange Commission.
According to him, SEC had already sanctioned Nova Finance and Securities, adding that he would stand by the decision of the regulatory body.
He stated that following an investigation into the “steady drop” of the shares price of AP in February 2009, he had made a report to SEC, which then looked into the complaint and sanctioned Nova accordingly.
“I will stand by the decision arrived at by SEC and the NSE”, he added.
When the committee sought to know whether he was withdrawing his petition before the House or not, Otedola replied, “I have not withdrawn it. I am only saying that because the committee made an appeal for peace in the interest of Nigeria, I will abide by the decision of SEC. It (SEC) has penalised those involved.”
Otedola, however, did not object to the appeal to resolve the dispute amicably.
On his own part, Dangote urged the committee to also study the full report of the Nigerian Stock Exchange on the share manipulation investigations, expressing doubts about the claim of price manipulation.
He argued that the price of the company’s shares had dropped just like others traded on the floor of the NSE did earlier in the year.
Dangote noted that a number of the companies, including banks, which suffered a similar fate, had begun to witness a gradual appreciation in their shares prices.
The committee later directed SEC to forward the report of its investigations into the crisis to it for review before taking a final stand.
The Director-General of the NSE, Prof, Ndi Okereke-Onyuike, who also appeared before the committee, tried to present the report on the matter, but she was asked to send it to the secretariat of the committee.
The committee is also investigating the hybrid shares offer made by AP.
Reacting to the matter, Wadada said, “The decision of SEC or NSE on the issue is not binding on the committee; we have oversight responsibilities over them.
“The committee will look at what SEC has done; we will also look at the difference between SEC’s and NSE’s findings and recommendations.
“If we have any reservations about the recommendations, we shall get back to the members of the public; we shall make our final stand public.”
AP had claimed in recent newspaper advertorials that Dangote mandated Nova to cross its shares in the NSE, which resulted in a price crash.
Otedola, who left the country after an alleged attempt to poison him in Abuja about two months ago, had also demanded the resignation of Dangote as the first vice- president of the NSE and an investigation into the matter.
But Dangote promptly denied the allegation.
While the NSE fined Nova N500,000, SEC, after concluding a separate investigation, disqualified the company’s Managing Director; Mr. Eugene Anenih, from being employed in any arm of the securities trading industry for five years with effect from April 16, 2009.
It also fined them (Nova and Anenih) N190,000.
The Otedola/Dangote feud ostensibly stemmed from a breach of a gentleman’s agreement between them not to encroach into each other’s business territory.
Dangote allegedly entered the petroleum business by upstaging Otedola in his bid to acquire controlling interest in Texaco, the downstream arm of Chevron Nigeria Limited.
Otedola retaliated by setting up cement and sugar importation business, markets, which Dangote dominates.
more from forbes
Posted on October 12, 2008 by Fortune&Class
The prospect of Mr. Femi Otedola and Alhaji Aliko Dangote engaging in direct business competition is already exciting Nigerians across the economic strata.
Until about two months ago, Otedola and Dangote have been known to be buddies in both the social and business senses. A source that had trailed the relationship between the two observed that though Dangote had had preeminence in the nation’s economic sphere before Otedola, but as soon as Otedola emerged in the big league of business owners about six years ago, he and Dangote became a pair both in public places and business alliances.
In the early days of Transcorp, Otedola and Dangote were on board of the company, positioned back then as Nigeria’s answer to the dominance of the multinationals. Perhaps the most high profile business alliance between the two was the Blue Star Consortium, a special acquisition vehicle the two had used to acquire controlling stakes in the Port Harcourt and Kaduna Refineries. The acquisitions, were, however, revoked soon after Alhaji Umar Musa Yar’Adua assumed the office of the nation’s president.
Beside, though Dangote is known to be the face of Obajana Cement Company, a cement manufacturing concern propositioned to be the biggest in production capacity in Africa, Otedola, his friend has also been mentioned to be part of Obajana in terms of stake holdings.
But now, it would seem that the business collaboration between the two may have been put under pressure arising from what sources close to the very moneyed men describe as betrayal of trust.
“I think it all has to do with the battle to acquire Chevron Plc, the downstream arm of Chevron Oil and Gas in Nigeria.” A source close to the two said. “Of course, you know by now that Femi had an intense interest in the acquisition of the company. The benefits to him were obvious, if he had acquired Chevron, he would have become the indisputable dominant operator in the downstream sector of the oil and gas industry. He would have merged Africa Petroleum, (a downstream behemoth in its own right after it was merged with Zenon) with Chevron Plc. With the two you can only imagine Femi’s competitive edge in the market place” The source revealed.
“Before the divestment of Chevron Oil and Gas from Chevron Plc was made public, Femi had apparently got information on the move and had shared his desire to buy Chevron with his friend, Dangote. I know that initially, Dangote was all in support of the scheme by Femi to acquire. But that was until Sayyu Dantata came into the picture.” The source said.
Sayyu Dantata, aside being a former business protégé of Dangote, is also related to Dangote, so it would seem natural that the balance of emotions by Dangote would tilt in favour of Sayyu.
“As it turned out, I am not too sure if Femi thought along that line. At least, he and Dangote had been at the Chevron thing for a while so there would have been no suspicion of Dangote’s shift of loyalty. So as the negotiation and bidding for Chevron proceeded, Femi constantly updated on his next moves and strategies. As issues evolved, he got to know that Sayyu’s MRS Group, the company that eventually won the bid was always outflanking him. The long and short of it is that there is the suspicion that Dangote might have availed his cousin, Sayyu of information Femi had shared with him.”
The same source said there had been a confrontation between the two where Dangote explained that Otedola could not have expected him to go the whole hog with him in consideration of his (Dangote) relationship with Sayyu.
“You know these people are matured men, you don’t expect them to bring their small fights to the public place, what I know is that Femi has decided to review and locate any opportunity in the economic space that enable him contribute to the economic advancement of the country. So all these talks about Femi taking on Dangote in competition by deciding to go into establishment of cement manufacturing plant is principally about expanding his business horizon. It has no direct bearing on the role Dangote played in the bid for Chevron.” The source explained.