25/04/2025
PRESS RELEASE:
ABIA STATE GOVERNMENT REVOKES LAND TITLE AND RECLAIMS ASSETS OF THE ENYIMBA AUTOMATED SHOE COMPANY (ENASCO).
The Abia State Government (ABSG) hereby revoke the land title granted to Enyimba Automated Shoe Company (ENASCO) and move to reclaim all Abia State Government resources and assets contributed to the Company. This decision followed a comprehensive regulatory, financial and operational review undertaken by reputable Big Four professional service firms, which unravelled significant discrepancies and corporate governance-related issues within ENASCO.
SEQUENCE OF EVENTS LEADING TO THE DECISION:
Establishment and Initial Contributions: ENASCO, with equipment imported from Turkey and a projected annual production capacity of two million pairs of shoes, was established in 2020 under the administration of Ex-Governor Okezie Ikpeazu. 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 contributed significantly to the company's assets, including land, buildings, and equipment, with a total asset contribution estimated at NGN158, 315, 809. 60 (One Hundred and Fifty Eight Million, Three Hundred and Fifteen Thousand, Eight Hundred and Nine Naira, Sixty Kobo), and cash contributions of NGN41, 850, 000. 00 (Forty One Million, Eight Hundred and Fifty Thousand Naira). These contributions from public resources represented over 70% of the cash and assets contributed to the business till date.
IRREGULARITIES OBSERVED:
Shareholding Discrepancies: The shareholding structure recorded at the Corporate Affairs Commission (CAC), as at November 2024 did not reflect ABSG as a shareholder or beneficial owner despite its significant contributions. Subsequent changes were made to the shareholding structure in July 2023, shortly after Governor Alex Otti took office. Yet, ABSG was still not mentioned as a shareholder in any publicly available records at CAC. The Shareholders on the CAC record as of 3rd April 2025 are Nwakile John Chidi with 445,900 shares; Udeagbala John Chinyelu with 219,600 shares, Nwaogu Chinenye with 111,500 shares, Sam Hart with 111,500 shares and Macauley Atasie with 111,500 shares. This demonstrated a clear intention to covet and misappropriate Government investment and assets.
Financial Mismanagement: ENASCO's financial performance showed a consistent decline in revenue and significant retained losses amounting to NGN115.7 million as at October 2024. The company also relied heavily on deposits for shares to fund its operations, which grew to NGN88.9 million within the period under review.
Governance Issues: There is sufficient evidence of the absence of a Corporate Governance Framework or Board Charter, lack of statutory audits, and non-compliance with tax obligations in the management of the Company.
Asset Utilisation: There is clear evidence of the utilisation of funds amounting to NGN97,720,294.51 from shareholders' deposits without proper documentation or validation of expenses.
Government's Response: In the light of the aforementioned issues, the ABSG convened an all-party stakeholders' meeting on the 23rd day of April 2025, 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 concluded with the existing shareholders resisting to restructure the Company's shareholding to reflect ABSG's contributions or to accept the appointment of Directors to represent ABSG's interest on the board.
The posture of the Company shareholders was not only untenable but ridiculous, as it is unacceptable that despite the overwhelming financial and asset contributions made by Abia State Government to the Company, the State does not hold a single share in ENASCO.
Directive from Abia State Government: Consequently, the ABSG has resolved to take immediate action to ensure accountability and protect public interest.
THE GOVERNMENT HEREBY:
1. Revoke the right over the parcel of land title granted to ENASCO.
2. Reclaim all assets contributed to the company, including land, buildings, and equipment.
3. Set to take appropriate legal actions to recover any additional funds or assets misappropriated by the management of the company.
The Abia State Government 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 the unwillingness of the existing shareholders to remediate the concerns of Abia State Government have resulted in ABSG taking the necessary steps to revoke the land title and to initiate moves to reclaim the State's assets and resources to protect the interest of the State and her citizens. The Abia State Government will continue to create conducive environment for businesses, genuine investors and investments that adhere to the highest standards of integrity and corporate governance as part of the Government’s sincere commitment and drive to resuscitate moribund industries in the State.
Ctz. UKOHA NJOKU UKOHA
Chief Press Secretary to the Executive Governor of Abia State
Abia State Government House, Umuahia.
25-04-2025.
