Things fall apart in ENASCO
..As Abia Govt. Revokes Firm’s Land Title, Assets
From Boniface Okoro, Umuahia
Things seem to be falling apart in the Enyimba Automated Shoe Company (ENASCO) following Abia State’s revocation of the company’s land titles and reclamation of it’s assets.
This stringent action followed government’s discovery that it owned no share or represented on the board of the company hitherto promoted as a government-owned establishment by the immediate-padt administration led by Dr. Okezie Ikpeazu.
A statement by the Chief Press Secretary to the Governor, Citizen Ukoha Njoku Ukoha, said that government inquisition into the activities of ENASCO revealed several anomalies, including non-government representation after contributing about 70 percent of cash and assets of the company and financial mismanagement, hence it’s action.
“The irregularities observed, and the unwillingness of the existing shareholders to remediate the concerns of Abia State Government have resulted in government taking necessary steps to revoke the land title and initiate moves to reclaim the state’s assets and resources to protect the interest of the State and her citizens,” the statement hinted.
It further read: “The Abia State Government hereby revokes the land title granted to Enyimba Automated Shoe Company (ENASCO) and move to reclaim all Abia State Government resources and assets contributed to the Company.
“This decision followed a comprehensive regulatory, financial and operational review undertaken by reputable Big Four professional service firms, which unravelled significant discrepancies and corporate governance-related issues within ENASCO.”
The government noted that
ENASCO, with equipment imported from Turkey and a projected annual production capacity of two million pairs of shoes, was established in 2020 under the administration of Ex-Governor Okezie Ikpeazu. “The goal was to elevate the state’s leather industry by producing high-quality footwear for the local and international market.
“The Abia State government contributed significantly to the company’s assets, including land, buildings, and equipment, with a total asset contribution estimated at N158, 315, 809. 60 and cash contributions of NGN41, 850, 000. 00.
“These contributions from public resources represented over 70 percent of the cash and assets contributed to the business till date.
The statement added that government discovered shareholding discrepancies as the shareholding structure recorded at the Corporate Affairs Commission (CAC), as at November 2024 did not reflect Abia State government as a shareholder or beneficial owner despite its significant contributions.
“Subsequent changes were made to the shareholding structure in July 2023, shortly after Governor Alex Otti took office.
“Yet, Abia State Government was still not mentioned as a shareholder in any publicly available records at CAC.”
CAC’s record as of 3rd April 2025 listed the shareholders as Nwakile John Chidi (445,900 shares); Udeagbala John Chinyelu (219,600 shares), Nwaogu Chinenye (111,500 shares), Sam Hart (111,500 shares) and Macauley Atasie (111,500 shares).
According to the government,
“this demonstrated a clear intention to covet and misappropriate government investment and assets.”
On the issue of financial mismanagement, the statement revealed that ENASCO’s financial performance showed a consistent decline in revenue and significant retained losses amounting to N115.7 million as at October 2024.
‘The company also relied heavily on deposits for shares to fund its operations, which grew to N88.9 million within the period under review,” it added.
The report of the review also indicated that ENASCO had governance issues, as well as fund utilisation issues.
“There is sufficient evidence of the absence of a Corporate Governance Framework or Board Charter, lack of statutory audits, and non-compliance with tax obligations in the management of the Company.
“There is clear evidence of the utilisation of funds amounting to N97,720,294.51 from shareholders’ deposits without proper documentation or validation of expenses.” the report revealed.
Responding to the findings, government said after convening a stakeholders meeting that ended in fiasco on the 23rd day of April 2025, to address the concerns highlighted in the report, mainly: lack of Abia State government’s representation in ENASCO’s shareholding and on the Board of Directors, despite the huge contribution of public funds and assets to the firm. “Unfortunately, the meeting concluded with the existing shareholders resisting to restructure the Company’s shareholding to reflect Abia State government’s contributions or to accept the appointment of directors to represent government’s interest on the board,” the statement disclosed.
According to the government, “the posture of the company’s shareholders was not only untenable but ridiculous, as it is unacceptable that despite the overwhelming financial and asset contributions made by Abia State government to the company, the State does not hold a single share in ENASCO.”
In the light of the foregoing, the government resolved as follows:
“To revoke the right over the parcel of land title granted to ENASCO,” “to reclaim all assets contributed to the company, including land, buildings, and equipment” and moving “to take appropriate legal actions to recover any additional funds or assets misappropriated by the management of the company.”
The government promised that it was committed to ensuring transparency, accountability, good and corporate governance in the management of public assets held under its custody in trust.
“The irregularities observed, and the unwillingness of the existing shareholders to remediate the concerns of Abia State government have resulted in government taking necessary steps to revoke the land title and to initiate moves to reclaim the state’s assets and resources to protect the interest of the state and her citizens,” it vowed.
Abia State Government, it further pledged, will continue to create conducive environment for businesses, genuine investors and investments that adhere to the highest standards of integrity and corporate governance as part of government’s sincere commitment and drive to resuscitate moribund industries in the state.
