When founder fights funder

A Fiery Founder-Funder Fight Is Flaming Up A Nigerian Pharmtech Firm


September 27, 2020

When two elephants fight, the ground suffers, they say. But when founders go to war with their funders, it becomes a hot topic of conversation in business circles. This encapsulates the ongoing tug-of-war at one of Nigeria’s foremost pharmacy and beauty chains.

HealthPlus Limited is currently at the centre of what appears to be a power tussle between its founder and under-pressure CEO, Bukky George, and one of its biggest backers, Alta Semper Capital.

On Friday, September 25, it was reported by several media outlets that the UK-based private equity (PE) firm, Alta Semper Capital — which currently controls a majority stake in HealthPlus — had brought on Chidi Okoro to lead HealthPlus. The announcement also stated that the founder of the company, George, will “continue to be a director and a shareholder.”

Okoro is a well-known pharmacist and management executive with over 3 decades of multi-sector experience and he was to assume a position with a rather flamboyant title: Chief Transformation Officer (CTO) at HealthPlus. Some would say that job title is kind of a euphemism for “new CEO.”

Well, it didn’t take long before a retaliation came from George who seems to be fighting back against what can be paraphrased as an attempt to freeze her out of a company she founded some 21 years ago and has run in all that time.

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In a statement presumably signed off on by Bukky and issued on Saturday, just a day after the disputed CTO announcement, it was alleged that Okoro’s appointment is part of a hijack scheme being perpetrated by a foreign private equity firm. The appointment was made out as a unilateral decision by the PE firm, though it’s not clear if they wield such power.

“The announcement of the appointment of a CTO is wholly false, wrongful and illegal and should be totally ignored,” the company’s statement reads.

The scathing fight back also states that the CTO announcement is an attempt to usurp the CEO for unmerited gains.

“It is the handiwork of unscrupulous foreign and local businesswoman and businessmen intent on reaping where they have not sown simply because they now see opportunities from the COVID-19 pandemic, like scavengers and vultures,” the company said.

HealthPlus was established by Bukky in 1999 and the company describes itself as “Nigeria’s first integrative pharmacy and the fastest-growing pharmacy/beauty chain in West Africa.” Over the past 21 years, the company claims to have grown to over 90 retail outlets, with a central distribution centre and employs over 850 associates.

But it appears that, behind the scenes, things have not been going on as smoothly at HealthPlus, especially since 2018 when HealthPlus teamed up with Alta Semper Capital to inject fresh capital to further grow the business.

In the statement which rebuked the appointment of the CTO, it was mentioned that the private equity firm was to exit after five years and George was prepared to give Alta Semper Capital a controlling stake in the business. 

But it seems the whole arrangement has been fraught with many issues, it’s been quite the tumultuous marriage. There’s been internal squabbles and power tussles inside the company, and as it so often happens, dirty linen is now out in public.

Parts of HealthPlus’ statement also alleged that the investment firm has been problematic, deliberately withholding funds and attempting to take over the company. 

“The endeavour was to run into troubled waters primarily on account of Alta Semper’s futile attempts to take over the company, leading to it deliberately starving the company of pledged funds as well as the intransigence of Alta Semper’s owners when reminded of their obligations,” the statement read.

It is also understood that the disputes had forced HealthPlus’ founder, George, to file a lawsuit at a Nigerian Federal High Court in May 2020.

As the statement reads: “In May 2020, Mrs Bukky George instituted legal action at the federal high court [Suit No. FHC/L/CS/609/2020] seeking by way of a petition to stop HealthPlus Africa Holdings Limited (the investment vehicle used by Alta Semper Capital and which they control) and their nominee directors from continuing to run and manage the company in an oppressive and prejudicial manner and in disregard of her interests as a member of the company.

“Their actions included: the deliberate delay and withholding of funds; meddling with management, interference with the functions of key employees; abuse of corporate governance processes and now the attempt to remove her as CEO.

“There is a pending motion on notice for interlocutory injunction dated May 27, 2020, to restrain the respondents from doing this but in flagrant disregard of the court process Alta Semper and its cohorts have purported to do just that,” the HealthPlus statement claims.

It also claims that Alta Semper Capital had proposed a mediation rather than filing a defence in court. But the PE firm allegedly frustrated the mediation process for over 3 months and bought just enough time to build a case against the founder and file an arbitration claim of its own in England.

At the moment, George is holding on to her position as founder and CEO and has refuted and disowned the announcement of the CTO.

HealthPlus and its founder also allege that Alta Semper’s actions, including the arbitration claim that it has now filed in the U.K., as a serious affront to the authority of the court and a desecration of the integrity of the Nigerian judicial system.

For now, though, fingers will have to stay crossed as the disputing parties continue to point fingers at one another. And it would be interesting to see how this plays out.

Featured Image Courtesy: Freepik

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