Healthplus’ messy ownership tussle get messier

By Adebayo Obajemu

Mrs. Bukky George, the bold and tenacious woman behind Healthplus has come a long way. In the course of doing a side hustle among other engagements, by dint of hard work and force of determination she built Healthplus, a giant in community pharmacy.

Healthplus until getting embroiled in ownership tussle and controversy was already a household name. George is the first recipient of the Pharmaceutical Society of Nigeria Board of Fellow’s Award for Excellence in Community Pharmacy, and the award did not come easy; it was a recognition of years of toil to build her pet pharmaceutical project.

But the recognition and award have now been overshadowed by controversy around the ownership of her company.

Success turns sour

Sometime in mid 2016, HealthPlus was stuttering and struggling to survive, having fallen on a hard time. It was not immune from the meltdown of the wider Nigerian economy, and needed a lifeline, if it was to survive the inclement business environment and bad weather.

Bukky George began to search for an entity with the Midas touch who could rescue her company from a further slide into more economic woes and she stumbled on Alta Semper in 2017, according to reports.

Immediately, the British Alta Semper began talks with HealthPlus to offer the struggling pharmaceutical giant the needed succour.
George was said to have reached out to the Pharmaceutical Council of Nigeria, PCN, to get a letter of “no objection” to the Alta Semper’s investment in her company. According to those familiar with the matter, such a letter was never a pre-requisite for foreign investment in a pharmaceutical company in Nigeria, and prior to this, the PCN had never issued it before, but the regulatory body honoured the request in a bid to support Mrs. George and save HealthPlus from a potential collapse due to paucity of funds, according to sources.

Thus the letter was made available to George by PCN in October 2017 and by March 2018, Alta Semper was said to have invested an initial sum of $10 million dollars, thus becoming majority owner of the company. The investors also had a window to inject further $8million subject to certain conditions, which were never satisfied.

Aside from losing the majority of her shares to Alta Semper through outright sale, George had reportedly come into a Management Agreement with HealthPlus. The Management Agreement was said to have detailed the terms of her employment and provided for automatic termination in certain circumstances, such as if George committed any act which in the opinion of a majority of the Board expressed in writing, constituted serious material issue.

In September 2020, a majority of the Board said George had contravened the terms of the agreement and so they expressed their opinion and her appointment was terminated.

Sources familiar with the matter told BusinessHallmark that at this point, George began to draw on her enormous contact and influence in order to push back at Alta Semper, complaining that her company was being taken away from her.

Sources said she allegedly concealed the full story from her wide contact whose influence she banked on to hit back at Semper. For example, it was alleged that she never told them she sold majority stake to the investors who brought in $10million when the firm was going broke.

Neither did she inform them that she freely agreed to that termination mechanism when she signed the Management Agreement.
On 2 March 2021 information came into public knowledge that the PCN had withdrawn the “no objection” letter issued to HealthPlus. Mrs. George quickly issued a statement to stakeholders saying that Alta Semper and their agents were no longer authorized by law to own or manage a retail pharmacy business in Nigeria.

According to BusinessHallmark’s findings, “no objection” letter is required for any investment in pharmaceutical business in Nigeria. “The PCN Act does not provide for this, neither does any regulation issued by PCN or any other authority. It is therefore not within the statutory powers of the PCN to pronounce foreign investment legal or otherwise”, Ambrose Omokordion, Chief Research Officer at Investa told this medium.

The Nigerian Investment Promotion Commission Act and the Poisons and Pharmacy Act 1992 (PPA) permit foreign investors to own all the share capital in retail pharmacy companies, according to Omokordion.

Many sources who did not want their names in print said George wanted to use PCN to commit illegal act, but this line of action did not sustain for long as HealthPlus allegedly issued a counter statement to stakeholders stressing that the letter of “no objection” from the PCN was not a pre-requisite for their investment.

Indeed, the PCN itself had noted clearly in its communication withdrawing the “no objection” letter that the document “has no bearing on the corporate structure and the relationships within HealthPlus.”

Many pharmacists who spoke with BusinessHallmark on condition of anonymity berated PCN for getting involved in the first place, and efforts by this medium to speak with them proved futile.

By withdrawing the “no objection” letter issued to George earlier over a dispute between shareholders, PCN, according to pharmacists who spoke, has undermined its own credibility and exposed the body to potential disrepute.
It is believed that the development will have corrosive effects on foreign Investments, as many investors may now be seriously deterred from further investing in pharmaceutical business in Nigeria as the credibility of regulatory authorities is among the factors that contribute to enhancing the attractiveness or otherwise of a business operating environment.
In the opinion of many experts, the whole development is unfortunate. According to them, Nigeria has lost huge foreign investments in the last half decade and the government is working hard to restore investor confidence in the economy. A regulatory body should therefore, not be seen to be inconsistent in its position.

But the matter did not end there. In October 3, 2020, there was a public notice by HealthPlus, and this is the main paragraph:
“At the time of the equity investment in 2018, Mrs. Bukky George transferred 95% ownership of HealthPlus to a new entity called HealthPlus Africa Holdings Limited (incorporated in Mauritius), whilst retaining 5% shares in her own name. HealthPlus Africa Holdings Limited is owned by Mrs. Bukky George (46.2%) and Idi Holdings (53.8%). Idi Holdings is Alta Semper’s investment vehicle.

“In essence, Mrs. Bukky George owns (directly and indirectly) 48.9% of HealthPlus and is the only Nigerian registered Pharmacist shareholder and director in the Company.”

Therefore, it became necessary for the Company to issue a formal statement on the on-going dispute and set the record straight. Apart from matters of illegality and violations of extant Nigerian legislation that trail and taint the transaction (which are being articulated in Court), the following is BusinessHallmark’s findings about the company:

HealthPlus was founded in 1999 by Mrs. Bukky George, and is said to be Nigeria’s first integrative pharmacy and the largest and fastest growing pharmacy chain in West Africa. As of March 2018, it operated 76 retail pharmacy and beauty stores, with presence in 11 states and the FCT, employing 800 Nigerians and was already the largest private employer of pharmacists in Nigeria.

In 2018, HealthPlus agreed with Alta Semper Capital LLC UK to inject fresh capital to grow the business. Alta Semper pledged Africa-focused, healthcare-focused, flexible capital to take advantage of the opportunities in the marketplace in order to scale the business.

Thee investment into HealthPlus was to enable the Company to capture the pent-up demand for high-quality yet affordable medicines, healthcare products and beauty supplies, to rapidly expand the Company’s footprint across Nigeria, establish a distribution centre, develop B2B channels and e-commerce. Alta Semper Capital undertook to commit $18 million into HealthPlus whilst retaining Mrs. Bukky George as CEO.

Litigation

At the time of the equity investment in 2018, Mrs. Bukky George transferred 95% ownership of HealthPlus to a new entity called HealthPlus Africa Holdings Limited (incorporated in Mauritius), whilst retaining 5% shares in her own name.

HealthPluss Africa Holdings Limited is owned by Mrs Bukky George (46.2%) and Idi Holdings (53.8%). Idi Holdings is Alta Semper’s investment vehicle. In essence, Mrs. Bukky George owns (directly and indirectly) 48.9% of HealthPlus and is the only Nigerian registered Pharmacist shareholder and director in the Company.

Alta Semper Capital provided part of the first tranche of $10 million with which the Company achieved several of the initiatives in its business plan. However, it soon appeared that they (Alta Semper) were unable to come up with the balance of the equity investment.

In May 2020, after 15 months of delayed funding, breached agreements, unmet expectations, dwindling inventory, reputational damage to the Company and its founder, and an attempt to ‘promote’ Mrs. Bukky George to the position of Chairman; Mrs. Bukky George instituted legal action at the Lagos Division of the Federal High Court [in Suit No. FHC/L/CS/609/2020] seeking reliefs aimed at stopping Alta Semper Capital and its nominees from running and managing the Company in an oppressive and prejudicial manner and in disregard of her interests as a shareholder.

There is pending in that case a Motion on Notice for Interlocutory Injunction dated 27th May, 2020 seeking to restrain the Respondents from removing her as CEO.

Upon being served with the Court process, the Alta Semper Capital nominees who are Respondents to the suit did not file any defence, but appealed that the parties mediate their dispute. They, however, chose to truncate the mediation process after three (3) meetings over a period of three (3) months.

Their intransigence frustrated Mrs. Bukky George’s other nominee director and the Chairman into resigning from the Board. The Board (which by the transaction documents MUST comprise of five (5) members) now has just three (3) directors and has not met for the last six-months.

The next time that Mrs. Bukky George heard from the Alta Semper Capital nominees was when they wrote to her, on 25th September 2020, wrongfully and unlawfully stating that they had terminated her appointment as CEO – when in fact they had no authority or power to do so.

Takeover

On Wednesday 23rd September, 2020, Mr. Zachary Fond and other agents of Alta Semper Capital flew into Nigeria and were allowed entry on Visa on Arrival (“VoA”) basis. In what appears to be a clear violation of the conditions of their respective VoA, they allegedly have been unlawfully parading themselves as Executive Directors of HealthPlus.

They also (albeit without any authority) sought to involve themselves in the day-to-day management of HealthPlus by inviting staff to meetings, purporting to issue directives, and issuing press statements, letters and mails on forged Company stationery to suppliers, bankers, security operators and regulators.
On Friday 25th September 2020, Ms. Afsane Jetha and Mr. Zachary Fond in complete disregard of the pending Motion on Notice co-signed a letter on alleged forged Company stationery purporting to terminate Mrs. Bukky George as CEO of the Company. The settled position of the law in Nigeria is that any attempt to remove Mrs. Bukky George as CEO whilst the application for interlocutory injunction is still pending amounts to flagrant disregard of, and an affront on the authority of the Court.

Legal Position

According to many lawyers spoken to in the eyes of the law George remains the CEO of the company. Bukky was born in 1970 to Mr and Mrs Fajemirokun, in Lawanson, Lagos State. She describes herself as a ‘home-girl’ who spent her early years in the Surulere-Mushin axis. She was the ninth of thirty-six children her father had.

After completing her secondary education at Queen’s College, Yaba in 1987, she got admitted into the University of Lagos to study Pharmacy and by 1992, she had graduated top of her class and bagged a B. Pharm. degree. She has had wide experience in leading health industries after her graduation.