HealthPlus Saga: “Equity Firm Lacks Power to Remove CEO”

Lawyers to HealthPlus have stated that Alta Semper Capital, a British foreign private equity firm (PEF), lacks the power to remove the CEO.

Lawyers to HealthPlus, the pharmaceutical retail firm at the centre of a running hostile takeover drama, said that Alta Semper Capital, a British foreign private equity firm (PEF), lacks the power to remove Olubukunola George as Chief Executive Officer (CEO) and founder of the company.

The lawyers made their position known in a letter addressed to the equity firm on its announcement, on Saturday, that it had terminated the appointment of George and appointed Chidi Okoro as Chief Transformation Officer (CFO).

The solicitors, AO Muoka & Co, said the action of the PEF is a flagrant disregard for the court as George had, in May, 2020, instituted a suit with number- FHC/L/CS/609/2020 – in which she has pending a motion for interlocutory Injunction seeking to restrain Alta Semper from removing her from office among other things.

HealthPlus lawyers also stated that Item 50 of Schedule 9 – Authority Matrix of the Shareholders’ Agreement ‘appointing, removing or suspending… a key Employee’ is a reserved matter ‘to be decided first by the Board or the General Meeting of the Company, pointing that no board resolution was passed nor did any meeting of the board of directors hold to remove George as CEO.

“The Company has a five (5) member Board comprising two (2) nominees of the foreign investor, two (2) nominees of Mrs. Olubukunola George (including herself) and a mutually appointed Chairman. Whilst Section 15.1 of the Management Agreement does provides that the ‘Agreement shall automatically terminate with immediate effect without the need of any notice, proceedings or rulings, in the event that the CEO: (d) commits any act which in the opinion of a majority of the Board expressed in writing constitutes serious professional misconduct’. We are aware that the Chairman (Dr. Ayo Salami) and Mrs. Olubukunola George’s other nominee (Mr. Deji Akinyanju) had resigned – without expressing any written opinion in the terms of Section 15.1(d) of the Management Agreement,” the letter read.

It also explained that there was no board in place when the PEF went ahead with its plan to remove George, highlighting that she was yet to nominate a replacement for Adeyanju and shareholders yet to agree a replacement for Salami.

“No steps, whatsoever, have been taken in this regard, and it is therefore improper to refer to ‘a Board’ when what the Company has at present is a depleted or improperly constituted Board. Section 15.1(d) of the Management Agreement did not stipulate ‘written opinion of a majority of the depleted Board’, and it is inconceivable how two (2) Directors of a five (5) member Board can amount to a ‘majority of the Board’.

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“It is, perhaps, instructive that you purportedly took this step on the 25th of September, 2020 immediately after the further depletion of the Board by the resignation of the Chairman on the 24th of September, 2020. It lends the suggestion that the action was taken mala fide,” the letter added.

It also stated that George was not allowed to respond to the allegations levelled against her as  ‘written opinion’ was served along with her termination letter.

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It concluded by saying George’s removal will be disregarded.

HealthPlus and Alta Semper had entered into a five-year partnership in 2018 to inject fresh capital to further grow the business.

Chidi Okoro Joins HealthPlus as Chief Transformation Officer

However, things went sour when Alta Semper withheld funds meant for the growth of the business and attempted to remove George without following due process in a bid to hijack the business.

After being served court summons when HealthPlus  filed a suit in May, Alta Semper appealed for a mediation of the crisis outside court, a process it was said to have frustrated after three meetings in three months.

Alta Semper thereafter filed an arbitration claim in England.