SEC sacks Ikeja Hotels’ board over Ibrus’ squabbles

Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has dissolved the board of directors of Ikeja Hotels Plc. The Commission has appointed an interim board for the hospitality and tourism company.

Chief Anthony Idigbe (SAN) is the interim chairman.

The interim board is mandated to conduct a forensic investigation into the affairs of the company.

SEC, in a statement announcing the dissolution, stated that it took the decision “due to unresolved internal crisis involving some majority shareholders of Ikeja Hotels Plc”, referring to disputes within the Ibru family, the majority shareholders of the company.

The Commission stated that the dissolution was a proactive measure in order not to allow the warring parties to take certain actions that would give them an advantage over one another.

According to the SEC, to forestall chaos in the organization, the Commission and other distinguished personalities, had previously held various meetings with the existing board towards resolving the crises but the company continues to be plagued with unhealthy corporate governance practices in disregard with the code of corporate governance for public companies.

SEC added that as a public company, it is paramount that the activities of the company are conducted within the confines of existing corporate governance regulations in the Nigerian capital market, to ensure the protection of minority shareholders and other investors.

“Having failed to resolve its lingering crisis, the Commission in exercise of the powers conferred on it by the Investment and Securities Act, 2007 to protect investors and the integrity of the securities market, hereby approves the appointment of an interim board for the company with Chief Anthony Idigbe, SAN as interim chairman” the statement said.

The Commission stated that it expected shareholders and key management staff of the company to work with the new team to ensure that the fortunes of the company are restored in the shortest possible time.

The Nigerian Stock Exchange (NSE) had earlier placed full suspension on Ikeja Hotel Plc as the crisis of confidence within the Ibru family continues to take its toll on the hotel and hospitality chain. The Ibrus founded and still own the majority equity stake in Ikeja Hotel.

With full suspension, no trading and price movement will be allowed on the shares of Ikeja Hotel as against technical suspension that allows trading without price movement.

The Exchange in a suspension notice stated that it took the decision “to safeguard the investments of shareholders of Ikeja Hotel Plc following the continued dispute between the major shareholders which has negatively impacted on the company’s governance structure”.

According to the Exchange, the suspension was pursuant to the provisions of rule 15.45: suspension on trading of securities, rulebook of the Exchange, 2015.

The NSE has already informed Securities and Exchange Commission (SEC) of the suspension, which took effect with immediate effect on Thursday November 10, 2016.

Read also: Extension of Ibru’s stay in Ikeja Hotels’ board after resignation raises dust

The Exchange noted that the suspension will be in place until further notice.

Ikeja Hotel, incorporated in 1972 and quoted on the NSE in 2007, controls a chain of hotels directly and through other subsidiaries and affiliates including Tourist Company of Nigeria (TCN) Plc and Capital Hotel Plc. Ikeja Hotel owns Sheraton Hotel, Ikeja, Lagos. TCN owns Federal Palace Hotel while Capital Hotel owns Abuja Sheraton Hotel. The Ibru family owns the single largest individual shareholding.

The Ibru family had ran the hotel chain without any notable wrangling until the demise of Mr. Alex Ibru, which opened up a family feud between his wife Mrs Maiden Ibru and his elder brother, Mr. Goodie Ibru. While Goodie Ibru chaired the hotel chain, other Ibrus had been on the board of Ikeja Hotel.

In earlier response to the attempt to oust him as chairman, Goodie Ibru had dismissed earlier claims of corporate abuses, noting that those opposed to him had rather ganged up to frustrate attempts to recapitalize the company. Goodie Ibru’s family in the counter-notice to the EFCC notice, reiterated his position that the Ikeja Hotel crisis “centres on family misunderstanding and boardroom politics.”

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