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INVESTIGATION: How corruption, questionable contracts led to the collapse of Peacock Paints Limited in Akwa Ibom

INVESTIGATION: How corruption, questionable contracts led to the collapse of Peacock Paints Limited in Akwa Ibom


By Ekemini Simon

In September 2015, Akwa Ibom State governor, Udom Emmanuel announced the reactivation of Peacock Paints Limited, a public limited company in Akwa Ibom with N526 million. Few years after its reactivation, investigations indicate the company is caught up in a web of corruption allegedly carried out by the management in connivance with the Board of Directors. 

This, coupled with the misappropriation of the intervention funds by the state officials and controversy over the firm’s ownership, has thrown the company into disarray and caused untold hardship to staff who are owed 15 months salary, even under the biting economy occasioned by COVID-19. 

Intervention gone wrong!

Since Udom’s intervention, the company’s fortunes have continued to nosedive. Checks into Peacock Paints Limited’s financial records show an imbalance in the company’s expenditure and sales records. For instance, the sales and expenditure profile of the company in 2019 shows that N48.36 million was made from sales of Peacock Paints products while N64.31 million stood as expenditure for that year. A year earlier, the loss stood at N65.30 million. 

Findings indicate that the bulk of the expenditure came through questionable administrative expenses. Staff of the company revealed that Peacock Paints only showed gleams of hope when the state governor saw to its reactivation. They noted that the company began retrogressing till its present state of comatose when the governor appointed new board members and management.

“This place is down and we need assistance. We are not in real production. Government did put in funds in the past. But the money was not put to right use. The fund is no longer there and the place is not functioning as it should. The reason for the collapse stems from the fact that the intervention fund was misappropriated,” says Christian Sampson, chairman of Senior Staff Union and head of depot staff of Peacock Paints Limited. 

Our investigations showed that the company’s Colour Centre, a place originally designed to have colour catalogue for customers at 93 Tunde Ogbeha street, Ewet Housing Estate and a depot at Oron Road, Uyo, have ceased operations as products are no longer supplied to the branches. 

Even then, there has been controversy surrounding the company’s ownership and the legality of government intervention. The company had been virtually bankrupt due to N30 million debt owed First Bank of Nigeria Limited (First Bank). The debt with interest accumulated to N150 million.   The bank sued the company and got a judgment to claim ownership of the company’s properties. Thereafter, the state government, which owns a 15 percent stake renegotiated the debt burden to N102 million, paid it off and claimed total ownership in September 2015.  

Despite this, the state government has failed to undertake due diligence in taking over the company. The 100 per cent ownership claim is not reflected in important government documents five years after pumped funds to resuscitate the company. For instance, the audited financial statements and annual report of the Accountant General of the State for 2019 shows that the state still holds 15 per cent stake in the company. This is the same stake the state held before the purported take over while other shareholders had 85 per cent stake.  

Also, it was discovered, Peacock Paints Limited’s name as incorporated by shareholders is still being used in business dealings. While the state government is making efforts to change the name of the company, some shareholders are still laying claim to its ownership. 

Misappropriation of reactivation funds

While a cloak of uncertainty hangs over the ownership of Peacock Paints, investigations revealed that the Ministry of Trade and Investment, which was in charge of the N526 million reactivation funds for the company, misappropriated the funds.

A senior civil servant in the ministry who cannot be named for security reasons, said that after N102 million debt owed First Bank was settled, the remaining N424.069 million was given to the ministry for the reactivation project. The source also disclosed that the handover notes by the then Commissioner for Trade and Investment, Emmanuel Enoidem, noted that out of the N424.069 million released to the ministry for the project, N339.385 million was the actual funds committed for the reactivation while N84.684 million was expended on transactions not related to Peacock Paints Limited.

The breakdown of the unrelated transactions is as follows: Coconut Plantation (N30 million), Petroleum Refinery (N26 million), One Hilux Car for Peacock Paints transferred to Coconut Plantation (N7.750 million), while sundry expenses gulped N20.934 million.

Of the N339.385 million, only N88.430 million has so far been transferred from the ministry to the company for production of paints and other operational expenses. 

The breakdown of the transfer is as follows: N49.950 million on October 24, 2016; N19.480million on June 22, 2017; N10 million on November 27, 2018; and N9 million on February 6, 2019.

The remaining N250 million was allegedly used for the renovation of the company’s production facility, settlement of minor debts from suppliers of production materials and the purchase of a multi-functional grinding machine called Basket Mill for the facility. 

A top source in the company confirmed that Kreis Basket Mill is the only machine that was bought by former trade and investment commissioner. Even with a mark-up of 25 per cent profit for the supplier of the machine, findings show that the machine should not have cost more than N8 million. The best price for 500lt Basket Mill 30 kilowatts with a jacketed tank as of February 2021 on popular global trade company’s website, is $33,000. The exchange rate of dollar to naira between January and June 2016 was about N199, thus keeping the price of the product at N6.567 million.

Basket Mill, the only Machine purportedly bought by Emmanuel Enoidem

The same source also alleged that the renovation of the facility was the primary means through which funds were siphoned. For instance, our source informed us that N19m was appropriated for renovation of the company’s administrative block. Our FOIA request to the Ministry of Trade and Investment was not acceded to, raising suspicion that the renovation of the facility was the primary means through which funds were stolen. Our source alleged that of the N19m appropriated for renovation, N6m was remitted to principal officers of the Ministry of Trade and Investment. When the then Commissioner for Trade and Investment, Emmanuel Enoidem, was contacted on the claim of allegedly receiving kickbacks, he said: “I will oblige you all the information you need if you mention those who told you and the amount I was paid as bribe.” When this was declined, he asked the newspaper to go ahead with its publication. 

“Please go ahead and publish the names of the contractors and how much I collected from each of them. Let’s start from there, sir. I am sure before you sent this to me as an investigator, you are satisfied with the facts.”

The source said the same dealings played out with others who had contracts to renovate the canteen and some offices. When contacted, Ukobong Umoh, the contractor who handled the renovation of the administrative block confirmed that he is being owed N1.8 million for the work done. Sunny Ekpo, the contractor who handled the renovation of the canteen, said about N7 million debt owed him from the contract is yet to be paid five years after he completed the work.

Ephra-wood used as table for board meetings and said to be purchased at N2.3 million

The contractors, however, did not confirm if they gave kickbacks to Enoidem.

Questionable expenditure

Checks into the payment vouchers of the company showed that the management and the board engaged in many questionable disbursements, which are believed to have contributed to the company’s crash after government’s intervention.

A few of these expenditures stand out. For instance, over N10 million was spent between December 2016 and January 2017 on the procurement of unspecified number of closed-circuit television (CCTV) cameras. Payment vouchers seen by this newspaper revealed the disbursement of N7.2 million, N2.448 million and N821,400 was staggered for the purchase of CCTVs cameras to unknown contractors between 14 December, 2016 and 31 January, 2017.

Yet, findings show that only four night-vision CCTVs were installed in the company’s premises since its reactivation. Several members of staff who pleaded anonymity for fear of victimisation disclosed that none of the four CCTVs has functioned since they were installed. A Freedom of Information Act (FOIA) letter requesting for the invoice of the purchase from the management was greeted with silence.  A CCTV installation firm in Uyo, Wilkommen Energy, however, said that it would cost it N226,000 to install four Night Vision High Definition (HD) CCTVs. 

The Managing Director of Wilkommen Energy, Williams Ikotidem said: ” The average cost of the camera is N14,000. N14,000 multiplied by four is N56,000. Four channels DVR is about N18,000. Power supply unit is about N15,000. A drum of approved standard cable which is called RG59 Siamese cable, presently is about N32,000. Other materials including BNC connector, power plug, HDMI, extension, router, installation charges amongst others, will put the total cost at N226,000,” he said.

The financial statement of the company also confirmed the management’s unwholesome appetite for frivolous spending. The statement showed that N5.334 million was spent on furniture and fillings in 2017. On January 13, 2017, the management spent N2.3 million for the purchase of Ephra-wood used as table for board meeting. Yet again, an FOI request asking for the contract details including the invoice for the expenditure was not attended to.

A trend not to be ignored

There is a compelling pattern of corruption and misappropriation of funds by the board and management of Peacock Paints Limited that cannot be ignored. On December 14, 2016, the management paid to rent a property at N2.5 million per annum for two years from January 2017 to December 2018. The rented property, located at plot 93, Tunde Ogbega Street, Ewet Housing Estate, Uyo, was used by the company as Colour Centre. A year after, the company could not meet up with its rent obligation despite the withdrawal of N2.5 million purportedly as payment for the rent in 2019, sources within the company disclosed. 

This was affirmed by the attorney over the property, Elijah Usah. He chronicled efforts made to ensure that the company fulfilled its rent obligation.

“Peacock Paints did not fulfill her rent obligation for 2019 even after occupying the facility for the year. The unfulfilled rent obligation and the need to renovate the property after several damages were noticed necessitated our law firm on behalf of the landlord to write the company and board for action,” Usah noted.   

He added: “When they failed to respond, we wrote the Head of Service which through one Ekpeyong Michael responded on July 21, 2020, that they were not in the position to respond. The Board Chairman, Billy Etuk, later approached the owner of the property to take non-functional air-conditioners which they left behind in place of the unremitted rent”.

A chunk of the company’s expenditure also went to servicing allowances of board members. Board members of Peacock Paints Limited including Etuk, Sam Emeh, Nsudo Nsudo who is currently a serving permanent secretary in the State Civil Service, and Edet Idim were paid N14 million as sitting allowance and fringe benefits, N601,000 as entertainment expenses and N1 million traveling expenses between January 2017 to December 2018. These expenses were incurred despite the fact that some of them were receiving statutory salaries and allowances running into millions of naira per annum.

There are also cases of missing funds. For instance, at the Colour Centre, documents of stocktaking for 2019 exclusively obtained showed that N1.25 million made from sales of the company’s products was not lodged in the company’s account within the period. Besides, in a three-page petition by the cashier of the company, Joe Ossom, addressed to the Board of the company on January 28, 2021, the Account Manager, Godwin Mfon and Acting General Manager (AGM), Aniefiok Essien, were indicted for paying N4 million of the company’s fund into the AGM personal account with Guaranty Trust Bank (GTB) in November 2020. 

It was also found out that N1.698 million was paid to Elizabeth Consultants on May 25, 2017, without concrete information on the reason for the payment. The management did not provide the invoice of the transaction as requested through FOI. Checks at CAC on Elizabeth Consultants turned in no results implying the company does not exist. 

The beginning of troubles 

Corrupt practices in Peacock Paints Limited date back many years. After years of battling to stand out in the paints industry, the company witnessed a turnaround when Ben Attah was appointed as managing director in October 1999.

According to a major stakeholder of the company, Peter Linus, the company was revamped and new shareholders and investors were brought in during Attah’s tenure.

Linus, former Speaker of the Akwa Ibom State House of Assembly, said that the company was able to declare dividends of about 40 Kobo per share under a year of Attah’s management. 

“Attah later resigned and that was the beginning of the slide of the company into an abyss of corruption. Truth must be told, it died in the hands of Okokon Etuk, the chairman board of directors,” Linus said. 

He observed that the straw that broke the camel’s back was when the company under Obong Etuk’s watch acquired a loan from First Bank without the involvement of shareholders. 

“There were no board meetings to address the indebtedness coupled with litigations, it resulted in court ordering receivership.” 

When contacted, Attah said the main problem of the company was that some of the directors were unable to distinguish business from politics and personal endeavours. Attah also noted that the bad debt that changed the course of the company’s fortunes was obtained after he left. 

“We paid off all loans the company ever inherited. We had good credit balance in all our accounts when I was there,” he said.

Controversy over source of reactivation fund

There has been controversy over the funding source of Peacock Paints’ reactivation fund. During the re-commissioning of the company on September 5, 2015, Governor Emmanuel said that his administration spent N526 million in reactivating the company. 

Checks into the 2015 budget of the Akwa Ibom State Government show that N1 billion was approved for Akwa Ibom State Investment Corporation (AKICORP) for the reactivation of state owned enterprises namely Akwa Palm, Qua Steel, Quality Ceramics, Sunshine Batteries, Peacock Paints and Qua Rivers Hotels. 

However, the audited financial statements and annual report of the Accountant General of the State for 2015 did not reflect that funds were taken from the coffers of the State Government for the project. When the Accountant General, Uwem Andrew-Essien was contacted, he could not explain how the state government came about the funds used in reactivating Peackock Paints.

He asked that an official request for the information be made to his office. Subsequently, an FOI request submitted to his office was replied by Assistant Director and Head, Funds Directorate, Mfon Udomah, who asked that the request be channeled to the Secretary to the State Government (SSG) before the information can be released.

“You will please write to the Secretary to the State Government who will authorize the release of the information,” the letter stated.

However, the FOI Act 2011 gives the Accountant General’s Office the obligation to transfer such request to the SSG’s office. 

See Also

The Act in Section 5(1) states: “Where a public institution receives an application for access to information, and the institution is of the view that another public institution has greater interest in the information, the institution to which the application is made may within 3 days but not later than 7 days after the application is received, transfer the application, and if necessary, the information, to the other public institution, in which case, the institution transferring the application shall give written notice of the transfer to the applicant…”

The state government on May 15, 2019 announced the change of name of Peacock Paints to Ibom Paints Limited. According to the then Commissioner for Information, Charles Udoh, “the change in name is to enable the company operate on a clean slate without inherited liabilities”.

Checks on Ibom Paints Limited at the Corporate Affairs Commission, (CAC) reveal that the firm incorporated on July 6, 2020 with Registration number 1683217 has nine officers and no person with significant control. 

Curiously, CAC only made five of the nine officers of Ibom Paints public. With the exception of Akanimo Effiong who serves as the secretary, others including Nsikan Nkan; representative of Ministry of Finance, Ukpong Akpabio; representative of Ministry of Trade and Investment, Elijah Akpan; representative of Akwa Ibom Investment Corporation, and Uwemedimo Nwoko; representative of Ministry of Justice, are designated as directors of the company.

CAC did not respond to request to disclose the identity of the four concealed officers. The other four undisclosed officers are suspected to be the dark horses that may be financing the reactivation of Peacock Paints Limited with plans of having major stake in Ibom Paints Limited, sources within government disclosed.

Spiral of silence from government, peacock management

Meanwhile, the chairman of the Akwa Ibom State House of Assembly’s Committee on Trade and Investment, Kufreabasi Edidem, said the House was not aware of the problems bedeviling the company.

Edidem, whose committee has oversight powers on the state government’s investments said: “No, we haven’t been there yet. But just to inform you that I saw Peacock paint sold at a paint depot in Aka Road today while buying paint for my constituency project. Therefore, I doubt if it is comatose”.

Besides not responding to FOI request for key documents and information required for this investigation, the Commissioner for Trade and Investment, Ukpong Akpabio refused to comment on the issue, noting only that the state government will take decisions that will be in the interest of the company and the state.

Also, the management of Peacock Paints Limited did not respond to a FOIA request for invoices and clarifications during the period of this investigation. However, when this reporter contacted Etuk on phone, he became dodgy. 

“This week is out already. Let’s look at next week,” he said on March 3, 2021.

Asked the exact day for the appointment, he replied, “You know our schedule is not fixed. You may wake up in the morning and see text messages for Government appointment and that alters everything.”

That was the last heard from him. 

Subsequent calls and messages sent to him were not replied. The same attitude was received from the AGM of Peacock Paints Limited, Mr Aniefiok Essien who did not respond to calls and text messages put across to him. All messages sent to him via WhatsApp were also read but not replied to.

Effort to get comments from the Chairman of Akwa Ibom Investment Corporation, Elijah Akpan proved abortive. He was not available on February 25 and 26 when a visit was paid to his office. He did not also respond to calls put across to him. However, he replied via WhatsApp on March 2, 2021 that he was on a trip and would only be available to speak on the issue when he gets back. Since then, he has kept mum and has failed to respond to reminders sent to him on March 11, 18 and April 4, 2021. The Commissioner for Finance, Linus Nkan, also toed the same line. When reached for comments, Nkan said he was out of town and would only speak when he returns to the state.

Akwa Ibom State Government must come clean – CSO, Staff’ Union

Meanwhile, Policy Alert, a non-governmental organisation working on fiscal justice, has said that there is need for the State Government to come out clean on the true state of the company and its equity investment.

Executive Director of Policy Alert, Mr Tijah Bolton-Akpan said: “A situation where policy statements are issued by Government officials or institutions but they are not matched with its fiscal records that are available to the public calls for scrutiny.

“The current moribund state of the investment in Peacock Paints Limited is worrisome to say the least. The investments in industrialization generally in the State have to be transparent and we have not seen that level of transparency in several of state government’s investments. The people should know government’s equity in these investments. It creates a burden for analysts even for Government itself when the company is not performing. Ab initio, nobody knew who owns how many per cent of shares. Hence it is not clear where liabilities should be apportioned.”

Bolton-Akpan warned that for a Government that prides industrialization as its policy thrust, when transparency and accountability are lacking in its operations in the sector, it would inhibit trust and reduce the attractiveness of the State as a destination of investment capital.

Members of staff of the company are united in their conviction about what would address the problems of the company. They recommend that a new management should be instituted and working capital released directly to the company under strict monitoring procedure.

The Chairman of National Union of Chemicals, Footwear, Rubber Leather and Non-metallic Products Employees (NUCFRLANMPE), Emmanuel Robinson, asked that government should not make the mistake of releasing working capital to the board as presently constituted.

“I call on the Governor to dissolve the Board. He should put in place a fresh environment for the Board to work with the union. Government should discuss reasonably on matters of workers and the survival of this company. Government in line with a fresh Board and strict monitoring procedure should inject a working capital. Government should not make any mistake of releasing working capital to this present Board. A chartered accountant should be asked to come and manage the funds released.”

Captain Sampson Ewang a shareholder of the company who served as the military governor of Ogun State in 1996, believes government should return the company to the owners. 

“Akwa Ibom State Government has to give back the company to the owners. When they do that, they should give them timelines to pay back their money. What Government should have done should have been to investigate the management structure of that company, put it back to work and restructure the management together with the directors.”

* This investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting.

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