The Abia State Government said it has revoked the land title and taken steps to reclaim the assets of the Enyimba Automated Shoe Company (ENASCO) in Aba, Abia’s commercial hub.
Ukoha Njoku, the Chief Press Secretary to Governor Alex Otti, made the disclosure in a statement to journalists in Umuahia on Friday.
Mr Ukoha stated that the decision to revoke the land title “followed a comprehensive regulatory, financial and operational review undertaken by reputable Big Four professional service firms.”
He further stated that the firms “unravelled significant discrepancies and corporate governance-related issues within ENASCO. ENASCO was established in 2020, under the administration of ex-Governor Okezie Ikpeazu with equipment imported from Turkey and had a projected annual production capacity of two million pairs of shoes. The goal was to elevate the state’s leather industry by producing high-quality footwear for the local and international market. The Abia State Government (ABSG) contributed significantly to the company’s assets, including land, buildings, and equipment.’’
According to him, the state government contributed money estimated at over N158 million in assets and cash contributions of about N41.9 million to the shoe factory.
“These contributions from public resources represented over 70 per cent of the cash and assets contributed to the business to date,” he added.
Mr Ukoha, however, noted that although ABSG had the highest shares in ENASCO, “its shareholding structure at the Corporate Affairs Commission (CAC), as of November 2024, did not reflect Abia as a shareholder or beneficial owner.”
He argued that changes were made to the shareholding structure in July 2023, shortly after Mr Otti took office, yet ABSG was still not mentioned as a shareholder in any CAC document.
Mr Ukoha stated: “The shareholders on the CAC record as of April 3 are Nwakile John Chidi, Udeagbala John Chinyelu, Nwaogu Chinenye, Sam Hart and Macauley Atasie. Five of them had 445,900 shares, 219,600 shares, 111,500 shares, 111,500 shares, and 111,500 shares, respectively. This demonstrated a clear intention to covet and misappropriate government investment and assets.’’
Mr Ukoha further stated that ENASCO’s financial performance showed a consistent decline in revenue and significant retained losses, amounting to N115.7 million as of October 2024.
He explained that the company also relied heavily on deposits for shares to fund its operations, which grew to N88.9 million within the period under review.
“There is sufficient evidence of lack of a Corporate Governance Framework, Board Charter, statutory audits, and compliance with tax obligations in ENASCO’s management,” he stated.
He further noted clear evidence of the utilisation of funds, amounting to N97,7 million from shareholders’ deposits, without proper documentation or validation of expenses.
Mr Ukoha argued that “in the light of the aforementioned issues, the ABSG convened an all-stakeholders’ meeting on April 23 to address the concerns highlighted in the report. The primary focus was the lack of ABSG representation in ENASCO’s shareholding and on the Board of Directors, despite the huge contribution of public funds and assets to ENASCO. Unfortunately, the meeting ended with the acclaimed existing shareholders resisting to restructure the company’s shareholding to reflect ABSG’s contributions. They also refused to accept the appointment of directors to represent ABSG’s interest on the board.’’
He contended that the posture of the alleged shareholders was not only untenable but ridiculous.
He stated that it was “unacceptable that despite the overwhelming financial and asset contributions made by ABSG to the company, the state does not hold a single share in ENASCO.’’
He added that the government’s action toward reclaiming the company was to ensure accountability and protect public interest.
Mr Ukoha explained that, in addition to what has been done, the government had decided to take legal actions to recover any additional funds or assets misappropriated by ENASCO’S management.
“The ABSG is committed to ensuring transparency, accountability, good and corporate governance in the management of public assets held under its custody in trust. The irregularities observed and shareholders unwillingness to remediate ABSG’s concerns had resulted in the government taking the necessary steps to revoke the land title to reclaim the state’s assets and resources,” Mr Ukoha added.
He further stated that the state acted to protect the interest of its citizens, and that the government would continue to create a conducive environment for businesses and genuine investors to thrive.
(NAN)
