Unmasking the “fake” owners of Enyimba Automated Shoe Company, Aba
– By Eagle Okoro
More facts have begun to emerge concerning the underhand dealings that characterised the establishment and fraudulent-cum-criminal ownership structure of the Enyimba Automated Shoe Company (ENASCO), Aba.
The highly celebrated shoe factory was established in 2020 by former Gov. Okezie Ikpeazu and equipped with the state-of-the-art machines imported from Turkey.
It had a projected annual production capacity of two million pairs of high-quality leather footwear, designed and intended for local and international market.
The lofty and highly ambitious investment was “conceived” to boost the State Government’s investment profile, create employment opportunities for the teeming youths and scale up government’s revenue base through enhanced internally generated revenue. Beautiful and commendable idea, no doubt!
Unfortunately, like many other fraudulently conceived and executed multi-billion naira government-owned projects, particularly by the immediate past administration, such as the phantom Ikpeazu’s N10 billion “Abia Airport” and substandard “Government House”, the Aba shoe factory has proved not to be an exception, following the recent State Government’s findings.
By virtue of its dominant shareholding status in the company, estimated at over N158 million in assets and about N41.9 million cash contribution to the factory, representing more than a staggering 70 per cent of both cash and assets, the Abia State Government (ABSG) rightly remains the highest shareholder and indisputably the owner of the company.
In real term, however, a discreet investigation recently carried out
by the State Government has revealed otherwise.
And the mind-boggling revelation was that Abia State Government – the true and authentic owner of the factory, was, ridiculously, not listed as a shareholder in the company’s document of registration with the Corporate Affairs Commission (CAC).
The outcome of the government’s investigation showed massive fraud and discrepancies in the company’s shareholding and ownership structure, with some principal functionaries in Ikpeazu’s government listed as the masterminds.
The investigation opened a can of worm concerning five fraudulent and mischievous Abia super crooks, who deceitfully arrogated the ownership of the company to themselves, believing that nothing would happen.
The five, who were frontliners in the conception and registration of ENASCO with CAC, include Nwakile John Chidi, Udeagbala John Chinyelu, Nwaogu Chinenye, Sam Hart and Macauley Atasie.
It may not be completely wrong to assume that one or two of the five were acting as proxies for some other powerful persons in the administration. The five were exposed by the investigation as the “owners” of ENASCO, rather than ABSG, which has an overwhelming percentage of shares in cash and assets in the company.
A statement issued by Ctz Ukoha Njoku, the Chief Press Secretary (CPS) to Gov. Alex Otti, in Umuahia on Friday, disclosed that the State Government had waded in by swiftly activating a legal process to halt the deep-seated fraud and cankerworm that incredibly began to eat deep into the fortunes of the company, right from infancy.
Njoku stated that government had revoked the company’s land title and initiated legal measures to reclaim its assets.
He added that the laudable government’s intervention, “followed a comprehensive regulatory, financial and operational review, undertaken by reputable Big Four professional service firms”.
He explained that the firms “unravelled significant discrepancies and corporate governance-related issues within ENASCO”.
The CPS gave more insight into the ownership of the company, pointing out that “ABSG contributed significantly to the company’s assets, including land, buildings, and equipment”.
He, however, noted that although the state had the highest number of shares, “its shareholding structure at the Corporate Affairs Commission, as at November 2024, did not reflect Abia as a shareholder or beneficial owner”.
He stated that even when changes were surreptitiously made to the shareholding structure in July 2023, shortly after Gov. Otti assumed office, apparently to further seal their criminal and fraudulent act, “yet, ABSG was still not mentioned as a shareholder in any CAC document”.
The statement partly read: “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.”
Ukoha further stated that ENASCO’s financial performance showed a consistent decline in revenue and significant retained losses, amounting to N115.7 million as at 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 added.
He further pointed out a clear evidence of the utilisation of funds, amounting to N97,7 million from shareholders’ deposits, without proper documentation or validation of expenses.
Ukoha explained 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,” Ukoha further stated.
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 government’s action toward reclaiming the company was to ensure accountability and protect public interest.
Ukoha further explained that, in addition to what had 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 government taking the necessary steps to revoke the land title to reclaim the state’s assets and resources,” Ukoha added.
He further stated that the state acted to protect the interest of its citizens and that government would continue to create conducive environment for businesses and genuine investors to thrive.
It is unbelievable and ludicrous, to say the least, that no sooner than the shoe factory, which gulped huge public resources, was established than it began to head for liquidation, courtesy of its “smart” shareholders.
And baring the prompt and decisive steps taken by the State Government to reclaim it, ENASCO would have, sooner than later, gone the way of similar ill-fated government enterprises, such as Enyimba Hotels, Aba and Aba Glass Industry, amongst others.
But beyond uncovering the breathtaking rot, the State Government is expected to also subject the masterminds to proper legal scrutiny, in a way that they can give account of their stewardship to Abia taxpayers, who are the actual and genuine owners of ENASCO.
The development offers yet another golden opportunity for the Otti-led administration to further demonstrate its avowed anti-corruption stance. It is indeed a test case for the government and how it reacts to it would leave a lasting impression in the minds of the citizenry and residents alike.
Abians of good conscience await to see an open and transparent handling of the development and prosecution of those fingered in the largescale corruption at the shoe factory, which was upon its take off turned into a cash cow for a few smart Abians at the expense of the larger population of the taxpayers.
Abians need to know more about what transpired during this short period their darling company has existed, from conception to date, along with the role of all the dramatis personae, including the then Abia Chief Executive and founder of the company, who was on a regular trip to China and Turkey for its actualisation.
It is truly time for stock taking and anybody that had any dealings with the company must present themselves for thorough public and legal scrutiny.
And imagine that PDP remained in power beyond 2023 by the permutations of the five crooks and their accomplices, it means that the massive and unimaginable fraud in ENASCO would have remained a done deal, a fait accompli.
But God exposed them because in the new Abia, corruption, including stealing and coveting government’s property, is abominable, an anathema. To God be the glory.
– Eagle Okoro is a Public Affairs analyst and writes from Umuahia