HealthPlus responds via a public notice, and this is the main paragraph:
“At the time of the equity investment in 2018, Mrs. Bukky George transferred 95% ownership of HealthPlus to a new entity called HealthPlus Africa Holdings Limited (incorporated in Mauritius), whilst retaining 5% shares in her own name. HealthPlus Africa Holdings Limited is owned by Mrs Bukky George (46.2%) and Idi Holdings (53.8%). Idi Holdings is Alta Semper’s investment vehicle. In essence, Mrs. Bukky George owns (directly and indirectly) 48.9% of HealthPlus and is the only Nigerian registered Pharmacist shareholder and director in the Company.”
Click here for more on this.
This makes this case challenging because if this investor pays up, technically, the private equity firm is the majority owner of HealthPlus. But yet, despite this public notice, no one knows the voting structure. Mark Zuckerberg controls less than 30% of Facebook but holds about 60% of its voting rights. Largely, even in its public notice, HealthPlus is not providing clarity.
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Very strange things here…why do you have to indirectly own your company? At the end, the math worked against you!!!
PUBLIC NOTICE
Re: Health Plus Limited
Over the last few days, there have been in the news and social media, stories of the removal of Mrs. Bukky George as CEO of Health Plus Limited (‘HealthPlus’), the appointment of one Mr. Chidi Okoro as Chief Transformation Officer, and the attempted hostile takeover of the Company by agents of Alta Semper Capital (a foreign private equity firm which invested in the Company in 2018). It has therefore become necessary for the Company to issue a formal statement on the on-going dispute and set the record straight. Apart from matters of illegality and violations of extant Nigerian legislation that trail and taint the transaction (which are being articulated in Court), the following is a summary of the actual facts.
Background
HealthPlus was founded in 1999 by Mrs. Bukky George, and is Nigeria’s first integrative pharmacy and the largest and fastest growing pharmacy chain in West Africa. As of March 2018, it operated 76 retail pharmacy and beauty stores, with presence in 11 States and the FCT, employing 800 Nigerians and was already the largest private employer of pharmacists in Nigeria.
In 2018, HealthPlus partnered with Alta Semper Capital LLC UK to inject fresh capital to grow the business. Alta Semper pledged Africa-focused, healthcare-focused, flexible capital to take advantage of the opportunities in the marketplace in order to scale the business. The investment into HealthPlus was to enable the Company to capture the pent-up demand for high-quality yet affordable medicines, healthcare products and beauty supplies, to rapidly expand the Company’s footprint across Nigeria, establish a distribution centre, develop B2B channels and e-commerce. Alta Semper Capital undertook to commit USD18 million into HealthPlus whilst retaining Mrs. Bukky George as CEO.
Litigation
At the time of the equity investment in 2018, Mrs. Bukky George transferred 95% ownership of HealthPlus to a new entity called HealthPlus Africa Holdings Limited (incorporated in Mauritius), whilst retaining 5% shares in her own name. HealthPlus Africa Holdings Limited is owned by Mrs Bukky George (46.2%) and Idi Holdings (53.8%). Idi Holdings is Alta Semper’s investment vehicle. In essence, Mrs. Bukky George owns (directly and indirectly) 48.9% of HealthPlus and is the only Nigerian registered Pharmacist shareholder and director in the Company.
Alta Semper Capital provided part of the first tranche of USD10 million with which the Company achieved several of the initiatives in its business plan. However, it soon appeared that they (Alta Semper) were unable to come up with the balance of the equity investment.
In May 2020, after 15 months of delayed funding, breached agreements, unmet expectations, dwindling inventory, reputational damage to the Company and its founder, and an attempt to ‘promote’ Mrs. Bukky George to the position of Chairman; Mrs. Bukky George instituted legal action at the Lagos Division of the Federal High Court [in Suit No. FHC/L/CS/609/2020] seeking reliefs aimed at stopping Alta Semper Capital and its nominees from running and managing the Company in an oppressive and prejudicial manner and in disregard of her interests as a shareholder. There is pending in that case a Motion on Notice for Interlocutory Injunction dated 27th May, 2020 seeking to restrain the Respondents from removing her as CEO.
Upon being served with the Court process, the Alta Semper Capital nominees who are Respondents to the suit did not file any defence, but appealed that the parties mediate their dispute. They, however, chose to truncate the mediation process after three (3) meetings over a period of three (3) months. Their intransigence frustrated Mrs. Bukky George’s other nominee director and the Chairman into resigning from the Board. The Board (which by the transaction documents MUST comprise of five (5) members) now has just three (3) directors and has not met for the last six-months. The next time that Mrs. Bukky George heard from the Alta Semper Capital nominees was when they wrote to her, on 25th September 2020, wrongfully and unlawfully stating that they had terminated her appointment as CEO – when in fact they had no authority or power to do so.
The Takeover Attempt
On Wednesday 23rd September, 2020, Mr. Zachary Fond and other agents of Alta Semper Capital flew into Nigeria and were allowed entry on Visa on Arrival (“VoA”) basis. In what appears to be a clear violation of the conditions of their respective VoA, they have been unlawfully parading themselves as Executive Directors of HealthPlus. They have (albeit without any authority) sought to involve themselves in the day-to-day management of HealthPlus by inviting staff to meetings, purporting to issue directives, and issuing press statements, letters and mails on forged Company stationery to suppliers, bankers, security operators and regulators.
On Friday 25th September 2020, Ms. Afsane Jetha and Mr. Zachary Fond in complete disregard of the pending Motion on Notice co-signed a letter on forged Company stationery purporting to terminate Mrs. Bukky George as CEO of the Company. The settled position of the law in Nigeria is that any attempt to remove Mrs. Bukky George as CEO whilst the application for interlocutory injunction is still pending amounts to flagrant disregard of, and an affront on the authority of the Court.
The Legal Position
Mrs. Bukky George remains the Founder & CEO of the Company and continues to run the Company with the support of staff, suppliers, customers, landlords, banks and service providers – who have related with her over 20 years, who believe in her and her vision, and have helped her build the Company to the enviable brand it has become. The purported termination of her appointment as CEO cannot stand in law.
This Notice serves as a caveat to the general public, the Pharmacists Council of Nigeria, Pharmacy Associations, our staff, loyal customers, vendors, landlords, bankers and all stakeholders to disregard all communication from Alta Semper Capital and or its nominees and agents. They do not have any authority to issue directives on behalf of or bind Health Plus Limited. The dispute is sub-judice.
Dated the 29th of September, 2020
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Not sure there’s any adult in that room, the whole thing is pathetic.
For starters, Bukky George is a minority shareholder, whether she understood that from the beginning or felt that adding 5 to 46.2 would bring her over 51; that arithmetic wasn’t weighted; so it’s below 50 percent anyway.
Whether the other party can remove her or what happens when they couldn’t bring the remaining eight million dollars, if these things weren’t clearly stated in their contract/agreement documents, then it’s left for the courts to decide. Every other thing in that long press statement sounded childish; it’s better the management stops talking for now.
There are handfuls of unanswered questions, but again we are not party to these things, and none of them have us on their payrolls, so enough of the free advisory. Lawyers can start licking their lips, more money for the boys.
Well said
Some information are not well captured here.
1. The $18milliin was meant to be paid in two tranches of $10milliin immediately & then $8milliion after 12months subject to appropriate utilization of the first tranche.
The equty partner has a Five Years EXIT plan. In order words the agreement says that their money and profit must be paid back at the end of five years.
What was the financial affairs of Healthplus before and after the investment? Was there any possibility of DIVERSION of part of the $10million invested into private use. Otherwise growing the branches from 76 to just 90 after the investment is not adding up. Could this be the reason why they were holding on to the balance of $8m??
Why insisting on the CEO position, which is an executive office? Why rejecting a higher & more glamorous promotion offer to become the CHAIRMAN of your Company?
For going to court because of the proposal to have you move up to Chairmanship position after 21years as CEO leaves room for doubt !!
Of course, anyone who has borrowed money from foreign financier will know that they are very particular about structure & cirporate governance. May be the Healthplus truly need a new Cheriff or CEO that can drive the performances of the business to the next level. So why blocking tthe window of having a new CEO? Moreso that the equity investor have less than three years to recoup their investment and leave your company for you to run the way you like. So they are more aggressive at ensuring that the company’s performances improve significantly, so that they can recover their investment.
Hinestly, I see a lot of inexperience here on the part of Mrs. Bukky. In a well regulated sector , you cannot stay as the CEO for that length of time -21years! Alsi, going to court just to retain you as the CEO instead of the Chairman is not also necessary. Most funder will not only bring Cash into your business but also human resource capability. This is done to protect their investment and improve on the oerformances of the business.
The resignation if your own nominee Director (Mr. Deji) as well as the Chairman, Dr. Doyin says a lot about the personality of Mrs. Bukky. I hope she is not a very difficult person.
With alll of these, how do Mrs. Bukky intend to protect the interest of the investor in your company? They have the controlling shares in the business! They must have access to the company as they cannot be shut out and denied access . There money is part of what Healthplus is sitting on!
Mrs. Bukky needs to “calm down” and olay board room politics rather than the showmanship of one man decision she is used to. This is part of the reasons why they wanted her out of the CEO position. As the CEO, you need to justify expendituresif certain amount and seek board approvals on major decisions from time to time and she may not see reasons why doing that in her own company. She needs to learn. She cannot also be interpreting every decision if the board as being taken your rights and interest away from you. It is now a “Partnership” New Business.
She should remember that her action will have a lot of imolications on the image of the country and the ability of other business to access Foreign Direct Investment and loanable funds. If it was a loan N4billion ($10milliin) she took, will she say that the bankers should not take a lien on the fixed & floating assets of the company?
The public outburst & court processes will not in any way helo the company. Rather it will affect both the brand & equity values of the business.
I doubt whether there is any institutiion if government regulatiing investment foreign private capital investment in unquoted security. I think SEC should step up their games to this kind of transaction in order to protect the integrity if the market and that of the country.
Although, the Equity Investor had filed a case before the arbitration in the UK, there is the need for SEC, may be or Association of Issuing Houses to step him and advise the parties.
Some information are not well captured here.
1. The $18milliin was meant to be paid in two tranches of $10milliin immediately & then $8milliion after 12months subject to appropriate utilization of the first tranche.
The equty partner has a Five -Year EXIT plan. In order words the agreement says that their money and profit must be paid back at the end of five years.
What was the financial affairs of Healthplus before and after the investment? Was there any possibility of DIVERSION of part of the $10million invested into private use. Otherwise, growing the branches from 76 to just 90 after after two years is not adding up. Could this be the reason why the investor is holding on to the balance of $8m??
Why insisting on the CEO position, which is an executive office? Why rejecting a higher & more glamorous promotion offer to become the CHAIRMAN of your Company?
For going to court because of the proposal to have you moved up to Chairmanship position after 21years as CEO leaves room for doubt !!
Of course, anyone who has borrowed money from foreign financier will know that they are very particular about structure & corporate governance. May be Healthplus truly needs a new Cheriff or CEO that can drive the performances of the business to the next level. So why blocking tthe window of having a new CEO? Moreso that the equity investor have less than three years to recoup their investment and leave your company for you to run the way you like it. So they are more aggressive at ensuring that the company’s performances improve significantly, so that they can recover their investment.
Honestly, I see a lot of inexperience here on the part of Mrs. Bukky. In a well regulated sector, you cannot stay as the CEO for that length of time -21years! Also, going to court just to retain you as the CEO instead of the Chairman is not also necessary. Most funder will not only bring Cash into your business but also human resource capability. This is done to protect their investment and improve on the performances of the business.
The resignation of your own nominee Director (Mr. Deji) as well as the Chairman, Dr. Doyin says a lot about the personality of Mrs. Bukky. I hope she is not a very difficult person.
With alll of these, how do Mrs. Bukky intend to protect the interest of the investor in her company? They have the controlling shares in the business! They must have access to the company as they cannot be shut out and denied access . There money is part of what Healthplus is sitting on!
Mrs. Bukky needs to “calm down” and learn to play board room politics rather than the showmanship of one man decision she is used to. This is part of the reasons why they wanted her out of the CEO position. As the CEO, she needs to justify expenditures of certain amount and seek board approvals on major decisions from time to time and she may not see reasons why doing that in her own company. She needs to learn. She cannot also be interpreting every decision and action of the board as a way of taking away her rights and interest in her company. It is now a “Partnership” New Business.
She should remember that her action will have a lot of implications on the image of the country and the ability of other business to access Foreign Direct Investment and loanable funds. If it was a loan N4billion ($10milliin) she took, will she say that the bankers should not take a lien on the fixed & floating assets of the company?
The public outburst & court processes will not in any way help the company. Rather it will affect both the brand & equity values of the business.
I doubt whether there is any institutiion of government regulatiing foreign private capital investment in unquoted securities. I think SEC should step up their games to this kind of transaction in order to protect the integrity of the market and that of the country.
Although, the Equity Investor had filed a case before the arbitration in the UK, there is the need for SEC or Association of Issuing Houses to step in and advise the parties.
Very well put sir
Asking healthplus to provide clarity to issues like this is like telling them live up to the lies they feed to the general public.
As a staff of healthplus pharmaceuticals, I can categorically state out major disfunctions starting from the board to their various branches. The system is as messed up as their products.
“Rather it will affect both the brand & equity values of the business.
I doubt whether there is any institutiion if government regulatiing investment foreign private capital investment in unquoted security. I think SEC should step up their games to this kind of transaction in order to protect the integrity if the market and that of the country.” Actually, this company is not even a Nigerian company. HealthPlus Africa is a Mauritius company. So, all these court cases in Nigeria may not matter. The company is owned by HealthPlus Africa at 95%. So, SEC Nigeria may not do much at this moment. It is the ruling in Mauritius that matters since it is the firm which controls HealthPlus Nigeria.
Excellent articulation Goke, you have really dot the i and crossed the t’s!
Kindly release the edit button so that we can correct “typo” errors please!.
Dear Goke, thanks for the perspectives. If you logged in and commented, you can edit. But if that is not possible, just share to [email protected] with the updated version and they will replace. Note that they cannot delete the first version, otherwise, it would delete all the comments on the chains.
What I hope to understand is how non-pharmacists were able to get on the board of health plus. Pharmaceutical Council of Nigeria (PCN) will tell you that all board directors must bear the same surname or they must all be pharmacist. I have often wondered where that policy came from. The Corporate Affairs Commission will rightly incorporate your organisation as a pharmacy so long there is a pharmacist as a director on the board and leading the organisation. When you get to PCN, they will tell you to go back to CAC to change it. They insist that all directors must be pharmacists or bear the same surname as the pharmacist director. PCN has a responsibility to share the registration model of health plus. I beleive there are many investors in-country that are willing to improve coverage and access to essential drugs in Nigeria…but PCN ‘parlour policy’ makes it difficult to enter the market.
Fabian, thanks for this. Many of us do not even know that in the pharmaceutical/pharmacist domain. It is the same thing in insurance, only those with CIIN could be CEOs thereby making it impossible for outsiders to come with new insights to shake the sector. So, the CEO of Geico USA (a big insurer controlled by Warren Buffett’s empire) cannot run an insurance company in Nigeria because no one has given him PASS on a CIIN exam. With that, no one wants to invest in the sector and nothing new has happened. Nigeria has many issues.
So many questions are begging for answers on this deal. However, what baffles me is the fact that a capital venturing organization could invest a whooping $10m and left the management at the mercy of their partner solely as the CEO. At the minimum, if Buky George occupies the position of CEO at the beginning of the deal; the investor ought to have insisted on nominating the Finance Director or CFO to safeguard that much investment. This gap explains why after investing this much, Buky could only add twenty more outlets in two years with $10m. This growth does not logically justify this investment. This is a classical case of business as usual after the deal.
So many questions are begging for answers on this deal. However, what baffles me is the fact that a capital venturing organization could invest a whooping $10m and left the management at the mercy of their partner solely as the CEO. At the minimum, if Buky George occupies the position of CEO at the beginning of the deal; the investor ought to have insisted on nominating the Finance Director or CFO to safeguard that much investment. This gap explains why after investing this much, Buky could only add twenty more outlets in two years with $10m. This growth does not logically justify this investment. This is a classical case of business as usual after the deal.
Let there be an independent auditor to scrutinise the company book to ascertain judicious use of of 1st disbursement sum of $10m by the investor. It appears a lot is still pending in the whole story from Madam..
from Leo Stan Ekeh, Chairman of Zinox
“I have the highest regards for Mrs. Bukky George. I see her till tomorrow as a miracle child like myself. She is extremely brilliant with great energy and passion to succeed in her sector and there are few such women in Africa and my wife is one of them, so it will be spiritually wrong for me to be against her. I know both parties and simply put, they are all credible parties in partnership. I have known her investors – Alta Sempta Capital for some time before I met Mrs. George and we have had preliminary engagement relating to their potential investment in one of my companies and my ambition to roll out across Africa. But till date, I do not have a kobo share in any of their different investment vehicles including a kobo in HealthPlus, though anyone has a right to invest in any company of his or her choice without clearance from the general public including investing in any of my companies. I have great passion for the health sector and those around me know my investment and support in that sector locally. It is my prayer they resolve their challenges soonest. I want to keep the several discussions I had with Mrs George private because she is an amazon. I have my highest regards for successful African women and my Group is possibly the only one in the world with five certified women as Managing Directors. You can now understand!”
‘‘Looking for foreign investors is like taking a bank loan locally. You must keep your promises. When you talk about knowledge economy, it means you should be knowledgeable enough to understand what you are going into or pay quality corporate law firms to advise you, but you must listen to them. The money the bank lends to you belongs to depositors and investors and you must do everything to keep to the terms of the loan. Same with foreign investors. They are here to help you build and make money and in the process, you make more than you would have made. They help you alter your destiny. They are not charity organizations. Sincerely, they add huge value to help you institutionalize corporate governance and make more money than you would have made. I had warned severally in conferences that the failure rate of startups in Nigeria is unbecoming of a nation and an embarrassment. We should respect agreements signed in this 21st century. That is the only way this country can grow. I am a child of trust economy, so I must keep strictly to agreements to grow. We have world class locally owned legal firms to guide us in these partnerships. I have had at least one major public quoted company as foreign investor and the experience is rewarding. They remain my best friends till today and can vouch for me on major international transactions and they have done this severally even though I bought them out few years ago. We need these people to scale. Nigeria doesn’t have the real financial capacity to build globally rated companies. Trust me on that. Thank you.’’
Thanks Sir for your great insight, one cannot succeed in business or life without trust. As someone said “Trust is a Force Multiplier” without Trust you have no Force in business or life.
Thanks ,Mr Stan.for your kind advice,
So much nuggets for us aspiring business promoters from this HealthPlus debacle.
Parties should stop using public medium in communicating, allow more one on one dialogue and resolve knotty issues.
What I understand about this issue when it comes to the issue of an investment dealing with the foreign investor.
Nigerian entrepreneurs always focus on the legal part of the deal and lose out on corporate finance politics strategies and forget the control defense game