Ikeja Hotel Audit: SEC Orders Asset Restitution, Share Buyouts

…..Directs Revaluation Of Loans, Rental Settlements

The Securities and Exchange Commission (SEC) has concluded its forensic investigation into Ikeja Hotel Plc (IHPLC) and its investee companies, ordering sweeping measures to resolve longstanding shareholder disputes, recover corporate assets, restructure governance, and restore financial integrity.

The directives, issued in a letter seen by THE WHISTLER, mark the culmination of years of regulatory intervention following a highly publicized conflict between the factions of Mr Goodie Ibru and the estate of the late Alex Ibru.

The Commission said the latest decisions are based on findings from a forensic audit conducted by Akintola Williams Deloitte, supplemented by stakeholder input and independent verification.

The forensic audit was initiated after the 2017 Settlement Agreement between the parties and formally began in January 2018. Deloitte’s report, submitted to the SEC, was examined by the IHPLC board, which also engaged external auditors Grant Thornton to review the audit findings before submitting its official response to the Commission.

Among the SEC’s directives is an order for Mr. Goodie Ibru and his associated firm, Associated Ventures International Limited (AVIL), to return the monetary equivalent of shares in 13 publicly quoted companies, including Total, GTB, Julius Berger, Mobil, and Nestlé.

These shares were acquired using proceeds from the unauthorized sale of one million units of Union Bank Plc shares in 2001—assets that belonged to IHPLC. The restitution is to include all dividends and bonuses that accrued on those shares and is to be valued based on the prevailing market prices at the time of the share sales.

The Commission also found that IHPLC’s financial statements had overstated its indebtedness to AVIL, which had been recorded as ₦1.22bn. SEC directed that the figure be restated to ₦167.39m, which was the only sum supported by documentation. Conversely, the Commission validated IHPLC’s liability of ₦1.62bn to Minabo Limited in connection with a land transaction, based on verified title records at the Lagos Land Registry.

In its findings on the ownership dispute over Tourist Company of Nigeria (TCN) shares, the SEC ruled that the 260 million shares transferred to AVIL and Minabo Limited constituted valid repayment of a ₦985.87m loan previously approved by the IHPLC board.

As a result, Mr. Goodie Ibru and AVIL are to retain the shares, effectively resolving the dispute with the Alex Ibru group, which had already paid consideration for the assets.

The Commission also directed IHPLC to negotiate a befitting exit package for Mr. Goodie Ibru in recognition of his past role as chairman of the board, in accordance with the terms of the 2017 Settlement Agreement.

Further, SEC addressed several longstanding rental disputes. Mr. Goodie Ibru and AVIL are required to pay IHPLC and its investee firms—TCN and Capital Hotels—the full rental value for properties occupied during their tenure, discounted at 40 per cent.

The Alex Ibru/RFC/OMA group and Stanbic IBTC Bank Plc were similarly directed to vacate occupied spaces at the Federal Palace Hotel and to pay accumulated rental arrears totaling $641,487.50, also discounted at 40 percent, covering the period from October 2008 to December 2017. They were also directed to pay an additional $453,597.02 for occupation of the hotel’s penthouse without rent.

In an effort to restore financial clarity to IHPLC’s books, SEC mandated that the company’s ₦12bn in shareholder loans be discounted by 40 per cent for all shareholders. The company is to pay out the adjusted amounts immediately to eliminate the loans from its financial statements and strengthen the balance sheet.

To improve corporate governance, the Commission directed that all shareholders holding at least 10 per cent of IHPLC’s shares must sign a new shareholder agreement in a form approved by the SEC.

The board of the company is also to be reconstituted, with one-third of its members required to be independent non-executive directors. The chairman of the board must also be an independent director. Furthermore, only one representative from each Ibru faction may sit on the board at any given time.

With respect to TCN, SEC instructed the Alex Ibru/RFC/OMA group to acquire IHPLC’s ₦36bn shareholder loan in the company within six months. The group is also expected to buy out IHPLC’s 12 percent equity stake in TCN at the same price previously paid for the AVIL shares. The completion of both transactions must occur simultaneously.

Once these purchases are concluded, SEC-appointed directors will be withdrawn from TCN’s board, and the company may convert to a private entity, subject to the approval of its minority shareholders. However, until full compliance is achieved, the Commission’s regulatory intervention in TCN will remain in force.

During this period, the SEC emphasized that its appointed directors cannot be removed through shareholder votes or any other mechanism.

The Commission also authorized a setoff on the amount payable by the Alex Ibru/OMA group in the TCN loan buyout, with a 40 percent discount approved on the sum due to IHPLC.

In its concluding remarks, SEC expressed confidence that the implementation of these directives would bring closure to the prolonged internal disputes, enhance financial discipline, and ensure the long-term sustainability and stability of Ikeja Hotel Plc and its affiliated entities.

The statement was jointly signed by Olubunmi Tadema on behalf of Ikeja Hotel Plc and OOT Nominees Ltd, acting as company secretary.

Ikeja Hotel Audit: SEC Orders Asset Restitution, Share Buyouts is first published on The Whistler Newspaper