TransCorp: A Mega Nuisance? - 2008-06-23

Since November 17, 2004 when Transnational Corporation of Nigeria Plc (Transcorp) was established, the corporation has moved from one crisis to another but the latest workers strike looks like the last straw that may break the corporation's back writes Goddie Ofose. 

At the media briefing early last year which was held at the Nigerian Stock Exchange, Lagos, the ebullient Director General of the Exchange cum chairman of the first Nigeria's mega corporation, TransCorp, Professor (Mrs.) Ndi Okereke-Onyiuke said the former president, Chief Olusegun Obasanjo after reading the Sun Zu's “Act of War” assembled the business egg-heads in the country and proposed the idea of forming a mega corporation that would compete with some foreign cartels that had continued to feast on the country's economy through purchasing or outright acquisition of some of the government moribund business entities. The idea was taken hook, line and sinker by the country's business and marketing greats and then comes the Transnational Corporation of Nigeria Plc otherwise known as Transcorp.

It was not uhuru for the Mega Corporation yet as the discerning voices started to trail the establishment of the company that began to acquire almost all the government businesses that were put out for sales. While the criticism continued to pour in, it also enjoyed considerable support from a section of Nigerians that were referred to as Mr. President's sons and daughters.

Since 2005, Transcorp has fallen under the management of three different chief executives. First to assume that position was Mr. Fola Adeola, the pioneer managing director/chief executive of GTBank. Before Mr. Adeola could settle down for work, Mr. Bernard Longe, the erstwhile managing director of First Bank of Nigeria was asked to take over courtesy of some vested interest but this was short-lived as interest not favourably disposed to Mr. Longe regime invoked the Act of Good Corporate Governance to oust that sacked ex-MD of First Bank.

After Mr. Longe’s exit which saw him berth at Dangote Group, Tom Iseghohi, Harvard trained manager was brought in from the US to sail Transcorp to the promised land. Mr. Iseghohi has been the corporation's helmsman till date.

TransCorp’s supposed business lines are energy, telecoms, agro business, hospitality & entertainment and trade opportunities. However, today, TransCorp has only three portfolio companies: NITEL, MTEL and TransCorp Hilton, Abuja. These businesses only cut across telecommunications and hospitality.

TransCorp’s attempts to kick start the operations of NITEL and MTEL have consistently hit a brick wall. First, its attempt to raise additional funds through the capital market suffered set backs as the share was grossly undersubscribed.

Secondly, the supposed founders, who acted as directors of the company, were asked to drop their directorship due to the fact that they were holding a directorship position in public quoted companies. Some of these directors that relinquished their TransCorp positions include, Alhaji Aliko Dangote, Chairman Dangote Group, Tony Elumelu, GMD, UBA, Jim Ovia, GMD, Zenith Bank and Barth Ebong, GMD, Union Bank of Nigeria. However, Prof. Mrs. Ndi Okereke-Onyiuke, DG, NSE defended herself well and maintained the chairmanship position in the company’s board to date and the company has managed to wade off that crisis as the disenchanted directors nominated their representative such as Chika Mordi of UBA and Austin Obigwe of Union Bank.

The decision also made Aliko Dangote to announce his disengagement from the mega corp. as his representative, Mr. Longe was sacked as MD/CEO of TransCorp.

The corporation which had settled down to its primary responsibility could not do so due the controversy that trailed the TransCorp acquisition of NITEL and MTEL against some established bidders such British Telecoms (BT). Meanwhile, the Pentagon management arrangement with TransCorp was shrouded in controversy.

As if the corporation business portfolio is controversy and crisis, on the February 18, 2008 the House of Representatives Committee on Capital Market, through its Chairman, Ahmad Wadada, called on the Director General of NSE to quit her position as Chairman of TransCorp to pave way for a transparent and successful investigation of the corporation over the inability of NITEL and MTEL to function as expected.

He said “DG, NSE was not asked to resign because of incompetency or fraud, but on morality because she was the custodian of the nation's capital market where TransCorp was listed.” The call for Onyiuke to step aside came shortly after the federal government had announced the revocation of the sales of NITEL and MTEL to TransCorp. Meanwhile, prior to FG action on TransCorp, Nigerian Communications Commission (NCC) had threatened to revoke the corporation's licence over NITEL and MTEL inability to commence full business like its counterparts.

It would be recalled that Ndi Okorerke-Onyiuke had succeeded in keeping her place as chairman TransCorp while the earlier revocation announcement made by FG was reversed.

Now, TransCorp’s existence has been threatened to the bone marrow with the recent nationwide strike action embarked upon by NITEL employees. However, TransCorp’s management has described the workers action as provocative, illegal and irresponsible.

According to Adedayo Ojo, TransCorp’s Vice President for Corporate Relations, TransCorp has fulfilled the terms of agreement reached with employees two weeks earlier.

“To our shock and embarrassment and despite the payment of over N500 Million, the employees proceeded to blockade the SAT-3 facility which is Nigeria’s international telephony gateway. This action is not only a negation of the agreement by the employees representatives, but also an embarrassment to Nigeria in view of the national security implications,” he said.

But who wants Transcorp dead? Who are the people behind the numerous travails the corporation has been through? And if actually some individuals or group of individuals want TransCorp dead, what are the reasons?

According to a US based financial analyst, Tayo Ibikunle, “I see this Transcorp thing as a big way of deceiving Nigerians into believing that an economic Messiah had come. When flamboyant people whose motive in life is all about how they can increase their own net-worth teamed together to form a mega-corporation, what you should expect is nothing but a big failure.”

He continued “Nigeria does not need a big corporation to get out of the economic quagmire she's in right now. What we need are SMEs and unflinching support from the government. The US economy is buoyant because they give qualitative support to their SMEs; they value them more than corporations like Microsoft, IBM and Boeing.

“SMEs have the potentials of creating more jobs in many regions of a country than any corporation, a small SME also do have the potentials of becoming a big player in her own sector too; Microsoft, IBM, Dell etc are classical examples.”

He said further that “what those founders of TransCorp are trying to do is to compete with foreign multinationals; they will fail woefully because they don't have what it takes to match these people. Though they may have the financial and political muscle, Transcorp does not have a veritable original economic, development and innovative blueprint to become a world-class player overnight like they planned to. What they have succeeded in doing to date is buying lucrative and already money spinning companies like Nicon Hilton, I wonder where the much touted new jobs will be created from when they are buying already running companies. I think they should have aptly call themselves “NigeriaWeAreBuying Corp, (NWAB Corp).”

The likes of Ahmed Wadada, Chairman House Committee on Capital Market, House of Representatives, Mike Adenuga, Chairman, Globacom and Mr. Henry Boye, economy analysts are not TransCorp crusaders. Though, TransCorp crusaders and founders have said that TransCorp is the idea whose time has come but is this statement true?

There is no gain saying the fact that the NITEL strike has affected a lot of business one of which is  Proshare Nigeria Limited, an online financial service publications. According to Alero Ogor, Manager, Business & Markets of Proshare “you will have noticed that since the beginning of the week when NITEL staff went on strike, we have not been able to properly load breaking news and updates as we usually do. Most importantly, we have not been able to send out our newsletters.

“This was occasioned by the failed services from SWIFT Broadband, our primary internet service providers (who did not offer any feedback on what was happening to us) unable to provide the service because of the NITEL strike,” she added.

The Presidency, banks and PTOs were all reported to have been affected by the workers’ actions. However, TransCorp management has resorted to pleas asking all stakeholders in the industry to intervene. “We urge all meaning Nigerians and stakeholders in the telecommunications sector to ask the employees representatives for the real motives behind the current strike especially since Transcorp has fulfilled its obligations,” Adedayo Ojo, Transcorp Vice President for Corporate Relations pleaded.

The big question is :who are the people that want TransCorp dead? Perhaps, this may be the last evidence TransCorp detractors needed to nail its coffin since the brand has refused to find its footing after four years of existence while the likes of MTN, Celtel, Globacom and even Starcoms continue to declare vast return on investment.

The Nigeria first Mega Corporation has succeeded in surmounting the workers' threat but is still bedeviled with internal and external crisis particularly the ownership structure that has continued to pose a great challenge for the growth of the organization, only time would tell if in future TransCorp  would not be referred to as mega nuisance instead of mega corporation.