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Bart Nwibe, Other Directors Of SDS Accused Of Plotting To Push Out Founding MD

Smart Drilling Services Limited (SDS), a company based in Port Harcourt, capital of Rivers State, Nigeria is mired in a deep corporate scandal, with most of its directors taking desperate steps to push out one Ukpai I. Ukpai, the company’s chief executive and one of its two co-founders. An investigation by SaharaReporters revealed that the corporate conspiracy against Mr. Ukpai began after he accused the company’s chairman, one Bart Nwibe, as well as other directors of engaging in illicit actions that raised questions of conflict of interest.

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Mr. Ukpai, who returned to Nigeria after some years of working and living abroad, teamed up with Bart Nwibe, who is currently the Managing Director of Segofs Energy Services Limited, to found SDS in 2012. Segofs is an oil-service company specializing in directional drilling and the installation of pressurized habitat offshore while SDS focuses on such areas as directional survey and measurement while drilling.  

The company’s initial three-man board, which included one Ben-Chika Uzoagu (who is currently an executive director at Segofs), appointed Mr. Ukpai as the MD, while his co-founder, Mr. Nwibe, assumed the position of Chairman. SDS was for eleven months officially run out of Mr. Ukpai’s residence, before the company relocated to another business address within the industrial area in Port Harcourt in 2013.

Our investigation revealed that the corporate strife began at the firm shortly after its revenue profile slowly began to rise, spurred by third-party contracts with some oil firms including Nigerian Petroleum Development Corporation (a subsidiary of the Nigerian National Petroleum Corporation), Conoil, and Orient Petroleum. SaharaReporters’ sources revealed that, in 2013, Mr. Ukpai crossed the chairman of the SDS board, Mr. Nwibe, after he wrote an email to the SDS board alleging that three board members’ dealings with a third-party contractor constituted a conflict of interest. Incensed by his position, the three directors began to plot the MD’s marginalization and removal from the board.

Further, the source revealed to SaharaReporters that, in 2014, the MD again stood against an even more scandalous scheme by the firm’s chairman and three other directors. Mr. Nwibe, who once ran unsuccessfully for a seat in the House of Representatives, and his cohorts sought to use a company they owned, OILER Limited, to buy and supply gyro and its running gears to SDS. Mr. Ukpai was convinced that the directors’ action was illegal, since it amounted to taking undue advantage of their positions. At the time, SDS was expecting a third-party wells survey contract with the NPDC, with expected invoice of over one million dollars. Despite Mr. Ukpai’s contention that the directors’ scheme violated corporate governance practices and Nigeria’s corporation laws, the majority of directors backed the chairman, forcing the MD to settle for negotiating a reasonable rate for the OILER loan with dubious interest rates and terms forced on SDS by the Nwibe-led board. OILER Ltd, which is owned by Mr. Nwibe and three other directors, eventually supplied the gyro to SDS.

Mr. Ukpai’s resistance to their acts of corporate impunity infuriated Mr. Nwibe and the other directors. SaharaReporters obtained documents that demonstrated an escalation of hostile moves and high-handed measures by the Nwibe-led board to frustrate Mr. Ukpai, to usurp his executive functions, to strip him both of his salaries and sweat equity, and to orchestrate his ouster from a company he co-founded.

Even though he runs Segofs Limited, Mr. Nwibe and other board members loyal to him, several of them staff of Segofs he had handpicked, approved the transfer of executive functions to him and to themselves, a clear violation of Nigeria’s corporate law. SaharaReporters discovered that the affairs of SDS are now run and directed from the offices of Segofs Limited, with Mr. Nwibe calling the shots along with two non-executive directors, Ben-Chika Uzoagu and Uche Ejiogu.

Our source, who is conversant with events at SDS, further disclosed that other board directors, namely Uzo Ibemesi and Timothy Okeke, have sided with Mr. Nwibe. However, the source identified Mr. Nwibe and two non-executive directors, Ben-Chika Uzoagu and Uche Ejiogu, as the ringleaders of the reprisals against Mr. Ukpai.

Over the embattled MD’s objections, the highhanded board conspired to distribute Mr. Ukpai’s executive functions, telling him that he should merely oversee technical tasks. Our source informed us that Messrs. Nwibe and Uzoagu had at some point also conspired with the manager of Diamond Bank (Aba Road, Port Harcourt branch) to change the names of signatories on the company’s bank account without the knowledge of the MD. Unfortunately on that occasion, the company’s check bounced as a result of signature irregularities.

Our investigations also revealed that Mr. Nwibe unilaterally authorized the purchase of two refurbished cabins from the US at a cost of $180,000 for SDS. Experts conversant with the industry informed SaharaReporters that the purchase represented a typical squandering of funds, insisting that cabins of much better condition could have been purchased in Port Harcourt at no more than $20,000 apiece. Mr. Nwibe has recently also approved the shipment of the company’s tools abroad on suspicious motives.

From our investigations, while Mr. Ukpai is the third largest shareholder in SDS and co-founder, he has been effectively sidelined at the company and the board where he is outnumbered 1-5 by the Nwibe-led group. In fact, as a lawyer who reviewed documents for SaharaReporters remarked, Mr. Nwibe and his cohorts’ design appears to be to use Segofs to swallow SDS.

With the majority of the board hostile to him, Mr. Ukpai has faced a series of reprisals. In early 2014, the board fraudulently approved the appointment of Uche Ejiogu as a “supervising director.” The so-called “supervising director” has retained his job at Segofs, a fact that amounts to a grave breach of corporate practices. Our source disclosed that Mr. Ejiogu has been positioned simply as a tool to hijack much of the SDS MD’s functions.

Our investigation revealed that, from June 2014, SDS Limited’s board meetings have appeared targeted at Mr. Ukpai. Mr. Nwibe and his group have also taken to calling numerous “emergency” board meetings where the sole purpose was to effectuate new plots against the company’s MD.

The board meetings have pushed through an illegal organogram that rendered the MD’s office a sinecure, and threatened him to sign a non-disclosure agreement in order to gag him from revealing the board’s illegal and fraudulent activities. At one board meeting, the MD was told that the company no longer had money to pay his salaries. Some documents obtained by SaharaReporters pointed to a plot to resolve at an imminent emergency board meeting that Mr. Ukpai’s sweat equity, which was deemed paid for, had been withdrawn. Another agenda of the forthcoming emergency board meeting is to finalize the scheme to push Mr. Ukpai out of the board. Documents at the disposal of SaharaReporters point to self-dealing by Mr. Nwibe, Ben-Chika Uzoagu, and Uche Ejiogu as far as SDS operations go.

Mr. Nwibe unilaterally appointed a relative of his to serve as the SDS’s auditor, and the auditor wrote a report claiming the company had earned virtually no after-tax revenue. On the basis of the controversial report by the Nwibe-chosen auditor, the company claimed it was in no position to pay performance-based compensation to the MD as per his contract terms. Our investigations revealed that Mr. Ukpai’s official driver had been fired. In addition, his salary has been withheld since September 2014, with the company freezing his allowances since July 2014.

An insider source revealed that, sometime in late 2014, the police visited SDS and Segofs to interrogate Mr. Nwibe, Ben-Chika Uzoagu, Uche Ejiogu, and one Justus Elijah, described as an errand runner for the Nwibe group. Our source said petitions to the Inspector General of Police regarding the shady affairs of the board members had triggered the police visit. However, the official outcome of the police investigation has yet to be unveiled.

After reviewing documents related to the affairs at SDS, a Senior Advocate of Nigeria told SaharaReporters that he hoped that officials of Nigeria’s Corporate Affairs Commission (CAC) as well as law enforcement agencies should investigate what he called “a corporate culture of impunity and a cesspool of illegalities being perpetrated by men who apparently think they can make their own rules as they please.”

Also an expert in the oil industry told SaharaReporters that the scandalous affairs at SDS require the attention of the Nigerian Content Development Board as such impunity could discourage other entrepreneurs and professionals especially those from the diaspora interested in investing in the Nigerian oil and gas industry.

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