The decision of Jimoh Ibrahim, chairman, Global Fleet Group and majority shareholder in Newswatch Communications Limited, to shut down Nigeria’s oldest weekly newsmagazine, in what is considered arbitrary, hurts founders and staff of the company
He looked forlorn, a feeling of loss enveloping his face. Ray Ekpu, a director and Newswatch magazine’s co-founder, was stoic as he addressed journalists Thursday, August 9. His voice slithered on the verge of trauma as he spoke on the indefinite suspension of Newswatch magazine, a publication he and his colleagues nurtured for close to 28 years. Jimoh Ibrahim, the new publisher, was 17 years old when the late Dele Giwa, Ekpu, Dan Agbese and Yakubu Mohammed founded Newswatch in 1985.
“Through good and bad business times, except when the magazine was proscribed by the military for six months, Newswatch had always managed to hit the newsstand every Monday without fail. We thought things would have improved drastically or the seed of improvement would have been sown 15 months after Jimoh Ibrahim bought the majority shares of the company,” he lamented.
With the suspension of the publication last week, it was obvious that the directors had been hit below the belt. In the company of Agbese, Mohammed and Soji Akinrinade, co-directors, Ekpu expressed his fears for the magazine at the Nigerian Union of Journalists, NUJ, Lagos, secretariat last week. “We are baffled at the turn of events. We fear that the magazine now faces an uncertain future in the hands of Mr. Jimoh Ibrahim. Decisions as weighty as the relocation of the magazine’s office is a matter for the board of directors. There was no board meeting whatsoever,” he added.
Ekpu and his colleagues were reacting to Ibrahim’s “arbitrary” decision to suspend the publication of the magazine and relocate members of staff from Ikeja to the Global Fleet office in Marina, Lagos. But their disappointment runs deeper than the suspension and relocation stunts. They were downcast at the shadow that Newswatch had become. When he added Newswatch, Nigeria’s oldest newsmagazine, to his fleet of companies last year, Ibrahim, Global Fleet chairman and self-confessed business turnaround expert, promised to wave his magic wand over the ailing publication. A capital injection of N1 billion, reasoned Ibrahim, would clear the backlog of unpaid salaries and steer the magazine back into a stable financial health.
However, one year and three months after, it would appear as though Ibrahim’s projections have not been met. So, on Tuesday, August 7, he limped (the effect of a reported domestic accident) into the Billingsway, Oregun, Ikeja, Lagos, office of the magazine to announce the suspension of production while ordering the closure and relocation of the office to the Energy House, headquarters of his business on Lagos Island.
A terse press statement released hours later tried to explain and justify the relocation. “The decision is already approved by 51 per cent shareholders of the company – Global Media Mirror Limited… The remains of the magazine will now operate from 159–161 Broad Street, Marina, Lagos, to enable us overhaul and reconstruct the old office. The new office is equipped with modern-day technology (including computers and iPads) and standard furniture. But regrettably, it will not house incompetent staff…” the statement read. For the founding directors, this statement smirks of a plan to retrench some of the 106 staff of the company, a breach of his takeover decision not to downsize.
Before the commando-style scene played out that hot afternoon, Ibrahim addressed the staff who, as at that time, were being owed four months salaries. “He simply told us that he had already injected N510 million into the business and he is not prepared to do more than that. He said about N300 million was used in paying the entitlement of the four former directors and the balance was deployed to pay the backlog of salary arrears. When we asked him about our salary that has not been paid since April, he retorted that he could not be responsible for the cost of production and salary at the same time,” one of the obviously shocked staff who pleaded anonymity told the magazine.
Expectedly, Ibrahim’s action has drawn bile from the staff, founding directors and the media community in general. In May 2011, the billionaire had bought a major stake in the 28-year-old weekly news magazine. His majority share of 51 per cent had effectively transferred chairmanship of the board of directors from Alex Akinyele, former minister of information, to him and sent four directors who founded the magazine into retirement.
Grappling with poor sales, mounting debt profile, advertising fatigue and galloping cost of production, founders of Nigeria’s flagship newsmagazine had sold the controlling shares “at a good price” of N510 million to Ibrahim. His promise of injecting another N500 million to buy two printing presses, settle outstanding debts and accumulated salary arrears was also music to the ears of Ekpu, Agbese and Mohammed, surviving co-founders of the magazine.
Ibrahim then dissolved the board and reconstituted another one that includes Ekpu, Agbese, Mohammed and Akinrinade, former directors. At the signing of the Share Purchase Agreement, SPA, ceremony, Ibrahim assured staff that there would be no job loss in the new takeover. He referred them to the Nigerian Re-Insurance, NICON Insurance Groups, NICON Luxury Hotels and Air Nigeria as companies he acquired and gave new life. He promised that the tough times the Newswatch Communications Limited had gone through in the past had come to an end.
The businessman, who had earlier bought over National Mirror newspaper, had offered an insight on why he thought Newswatch was a worthy investment at the time. “We have identified what the problem of Newswatch is. The company is in financial difficulty. It is super in integrity and the brand name is very strong. What we intend to do is to inject capital and pay off the accumulated debts and enjoy the support of all stakeholders,” he said.
But the reprieve and turnaround magic he promised staff and the former directors evaporated after five months. Members of staff who spoke to the magazine on the condition of anonymity said: “For the first five months after he acquired the magazine, salaries were paid and he cleared the backlog of unpaid salaries the former directors owed us. The situation changed thereafter and salaries became irregular.”
However, TELL learnt that Newswatch had embarked on the road to Kigali after Ibrahim reneged on his several promises. In a letter addressed to Ibrahim, just before the production closure, members of staff through the NUJ, Newswatch chapel, complained about the dilapidated infrastructure and poor conditions of service.
And they sure had good reasons to be so worried. Once again, drought is threatening revenue as expected advertisement income from the Nigerian National Petroleum Corporation, NNPC, Federal Mortgage Bank of Nigeria, Economic Community of West African States, ECOWAS, and Air Nigeria, one of Ibrahim’s companies has not been forthcoming. “The editorial department has been incapacitated in the last one year. The library has collapsed. You hardly get materials needed for research, as newspapers are not regularly supplied due to lack of fund. Editorial staff also found it difficult to get money to travel for stories. We don’t even have chairs on which to sit. While new tables had been put in all offices, chairs were not supplied,” aggrieved members of staff complained.
The staff also fumed about the relocation order, wondering how they would ever cope with the increased transportation burden when they have not been paid for months. “We are not aware that Newswatch’s board has taken such a step. If it had, to the best of our knowledge no such decision has been communicated to the staff. Do the board members expect us to trek from Lagos Mainland to Lagos Island on empty stomachs, given the non-payment of salaries since April 2012?” they queried.
For now, it seems Ibrahim is not ready to budge. He has promised to pay off any member of staff who could not cope with the new arrangement. “Any staff not in agreement with the latest development is directed to collect any outstanding salaries from the accounts department immediately,” he noted in the statement he issued announcing the latest development last week.
But the workers and former owners of the business are promising not to allow Ibrahim’s actions go unchallenged. At the press conference in Lagos, the founding directors of Newswatch described Ibrahim’s actions as illegal and arbitrary. They insisted that the self-styled business turnaround expert did not consult them as minority shareholders in the business before taking the decision to suspend operations. “There was no board meeting whatsoever. Even if you hold the majority shares, it is at a board meeting that you determine your strength as a shareholder. If you did not call a meeting and you proceeded to suspend the publication of the magazine, then your actions are illegal,” Ekpu maintained, adding that: “We are baffled at the turn of events. We thought things would have improved drastically or at least the seed of improvement would have been sown. We thought the new investment; the new capital injection would move the company to the next level. We thought Ibrahim believed in that too.” The founding directors promised to continue to consult widely while insisting that they would do everything within their powers to reverse the order suspending operations.
Depending on how things shape out in the next couple of weeks, the latest development in Newswatch may yet be another addition to the many battles Ibrahim who launched a failed governorship bid in Ondo State in 2003 is currently fighting. Apart from Newswatch, Ibrahim is also currently embroiled in tax evasion charges involving Air Nigeria, one of his companies. The airline which has been grounded by Nigerian Civil Aviation Authorities for safety-related issues is also facing imminent prosecution by Federal Inland Revenue Service for alleged evasion of tax obligations up to the tune of about N5 billion.