Before Jumia became the name on everyone’s lips when it comes to e-commerce in Nigeria, Konga had already taken on that turf.
At some point, Konga was Nigerian e-commerce and Nigerian e-commerce was Konga. That was before the struggles began. Konga suffered a decline and the Naspers-backed e-commerce company was eventually acquired, mostly likely at a cut-price, by a little-known technology firm in Nigeria.
But maybe that decline was accelerated, in part, by a rather unsettling and unnerving story just made known by the founder, Sim Shagaya, who ran the company until 2016 after founding it in 2012.
Today, Shagaya took to Twitter to narrate how he had to repay a debt of NGN 60 Mn back in 2014 even though his company had absolutely nothing to do with it. And he didn’t just pay a debt that should never have been his to pay, he also had to fake a heart attack while at it.
In 2014, we were going gangbusters. We were growing 20+% month on month. Lots of operational challenges but this one would be special. Then at 630am one day, I got a call from our head of fulfillment. The Nigeria Police has shut down the distribution centre. Details were murky.
— Sim Shagaya (@SimShagaya) October 27, 2019
It all began when a bank convinced itself that Shagaya’s company, Konga, was owned by a landlord who had defaulted on a loan issued by the bank.
Shagaya said a Nigerian bank which he referred to as “Starling” (not real name) sent the police to shut down one of Konga’s distribution centres, thinking the landlord owned the online marketplace.
According to Shagaya, Konga had some small short-term trading liabilities to suppliers but certainly didn’t owe any bank.
The landlord owned the property where the distribution centre was situated but not the online retail business. However, the bank was not convinced that Konga was not owned by the landlord.
The bank moved to take over the property, causing over 100 warehouse workers to mill about the facility, clueless about what was going on, with police officers stationed around the property.
With the uncertainty surrounding the identity of the individual that owned Konga preventing business flow, the burden of proof was on Shagaya to prove ‘Starling’ or the recovery officer wrong.
As orders kept pouring in but demands were not met due to the shutdown of the distribution centre, Shagaya, his lawyer and the then-COO of Konga, Shola Adekoya, had to present incorporation documents to prove Konga had no corporate affiliation with the landlord.
However, despite the submission of incorporation documents, the recovery firm said it still didn’t believe the landlord wasn’t the owner of Konga. Shagaya stated in his tweet that, After this, Shagaya had to inform his board about the situation after initially deciding against that.
While the issue lasted for four days, the landlord was nowhere to be found. He had reportedly switched off his phone, so he couldn’t be reached, and he never reached out during the period either.
As the issue dragged on, Shagaya began to consider shutting the Konga website down in order to stop the overwhelming orders they couldn’t fulfill. He called an emergency meeting with his board, and the resolution was to take down the Konga website if the debt issue wasn’t resolved in 48 hours.
He also began to make calls to persons that could be of help as regards the bank and the recovery firm. According to Shagaya, the then Minister for ICT, Omobola Johnson, as well as leaders of the banking community and senior lawyers were among those contacted to help resolve the issue and get the attention of ‘Starling’ Bank’s CEO, who told Shagaya he had never received “so many calls around any one issue” and promised that he would “look into it”.
Despite this, the issue still lingered, and in order not to disappoint customers any longer, the company began to meet demands from the headquarters rather than waiting for the distribution centre which was still under lock.
After another round of calls, an agreement was finally reached with the bank and the recovery firm. Shagaya had to write a cheque for two years of additional rent in favour of the bank.
The payment was over NGN 60 Mn. However, after handing over the bank draft for payment to the recovery firm, Shagaya and Shola were informed that only the bank could order the police to vacate and open its distribution centre.
Shagaya and his team had to go to the bank to meet with the CEO. After waiting for 4 hours without seeing the CEO and having only 1 hour left to shut down the Konga website, Shagaya hatched a plan that involved some theatrics.
He told his lawyer the only solution left was to fake a heart attack, and the lawyer was to support his ‘Oscar-rated performance’. Immediately Shagaya faked the heart attack, the bank management decided to meet with him. And the matter was finally resolved.
It was a rather comical end to a matter that was, until that moment, anything but funny. And who knows what would have been if the company didn’t part with all that money when it did.
I’m please to share that I’ve been invited and accepted to serve as a member of the Economic Advisory Council of the Executive Governor of Plateau State. This is a part of Nigeria that I care deeply about and I hope I can be of significant service.
— Sim Shagaya (@SimShagaya) August 16, 2019
Sim Shagaya is currently building uLesson; an edtech platform that is “utilising every tool available, to deliver high-quality affordable education to all Africans.” He also serves as a member of the Economic Advisory Council of the Executive Governor of Plateau State, in North Central Nigeria.