Why Alta Semper’s removal of George as CEO of Healthplus can’t stand – Company’s lawyers

A unit of Healthplus store

Ayorinde Oluokun/Abuja

Solicitors to leading Nigerian pharmaceutical products retail chain,  HealthPlus, has rejected attempt by Alta Semper Capital, a British foreign private equity firm to sack Olubukunola George, the Chief Executive Officer (CEO) and founder of the company.

The lawyers said the private equity firm which has been at the centre of hostile takeover bid of its operation in the past few months lacks the power to remove George.

The solicitors said this in response to announcement by the equity firm on Saturday, that it had terminated the appointment of George and appointed Chidi Okoro as Chief Transformation Officer of the company.

In the letter, the solicitors, AO Muoka & Co, said attempt to kick out George from office is a flagrant disregard of the pending motion for interlocutory Injunction seeking to restrain Alta Semper from removing her from office among other things filed on May 2020.

In addition, the legal firm also pointed out that Item 50 of Schedule 9 – Authority Matrix of the Shareholders’ Agreement ‘stated that appointing, removing or suspending… a key employee’ is a reserved matter‘ is to be decided first by the Board or the General Meeting of the Company, but 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 provide 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.

In addition, the lawyers noted that there was no board in place when the private equity firm announced the alleged removal of George, since a nominee for replacement of  Adeyanju  has not been announced, while the shareholders are 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’.

“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.

The firm of solicitors also noted that George was not allowed to respond to the allegations leveled against her as ‘written opinion’ was served along with her termination letter.

The firm therefore concluded that it Healthplus will disregard the letter ordering removal of George.

Attempt to remove Gorge was the continuation of the ongoing battle by the foreign equity firm to take over operations of HealthPlus  which it entered into a five-year partnership deal with in 2018.