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Audit report alleges misuse of N3b at Odu'a TEL

Posted by By Dele Fanimo on 2006/06/21 | Views: 428 |

Audit report alleges misuse of N3b at Odu'a TEL


AN audit query over the alleged mismanagement of N3 billion may have been slammed on Odu'a Telecoms Limited.

AN audit query over the alleged mismanagement of N3 billion may have been slammed on Odu'a Telecoms Limited.

The audit report, sent to the outfit parent company, Odu'a Investment Company, said the mismanagement involved a project which ran with a hitch. According to the report, the problem arose out of an error of judgment by the board, which decided to source short-term loans to finance capital equipment like plants, spares and service.

The auditors averred that "with an insight into the telecommunication business, it is clear that a huge initial capital is necessary for a successful roll-out of service. "Therefore, it was a bad business decision to take loans at short-term to finance capital items - plants, equipment and others that need at least three years of gestation period."

The telecommunication company secured N1.2 billion facility from Union Merchant Bank Limited; N870,997,164 from Wema Bank Plc, N500 million from Union Bank of Nigeria Plc and N500 million from Co-operative Bank Plc, totalling N3.071 billion as at 31st August 2004.

The loans were said to have been taken on condition that repayment shall be due in 90 days from the date of drawdown.

The project was executed between 2003 and 2004 when Chief Olu Bajomo was the Odu'atel board chairman (and later Mrs. Iyabo Apampa) and Sir Remi Omotoso, the group managing director. During the period, Odu'a shares in four blue-chip companies were depleted.

While the principal is yet to be paid, over N1.5 billion has been paid as interest as at August 2004, thus putting the total loss at about N5 billion.

The audit report made available to The Guardian showed that the business plan was faulty abinitio as the Time Division Multiple Access (TDMA) technology deployed by the company was not suitable for the environment to which it was deployed.

The report further noted that the appointment of the financial co-ordinator, technical consultant (Dr. Tumi Hawkins) and hardware vendor did not follow due process, adding that "there was an error of judgment by the board, which did not take advantage of the financial/technical partner which was offered to Odu'a Telecoms by ZTE of China during a visit to the Asian country in June/July 2002.

Ironically, the new board of Odu'a Investment led by Chief Clement Akinyemi (chairman) and the Group Managing Director, Mr. Adebayo Jimoh, deployed the Chinese technology with about N680 million investment which was launched by the Communications Minister, Chief Cornelius Adebayo last week in Ibadan.

Already, the new TDMA technology has started working while it is expected to come up live in Osun, Ondo, Ogun and Ekiti states before the end of next month.

Part of the audit report implemented was the downsizing of the workforce of the moribund outfit with most of them found unsuitable for the job.

For instance, while a major Global System of Mobile Communication (GSM) company as at 2004 had about 1,700 workers on its pay roll, and was making a profit of over $45 million (N6.3 billion) monthly, Odu'a tel, with its level of operation then had 530 workers.

In an interview with The Guardian, Jimoh admitted that he had to sack the workers before carrying out reforms in the outfit, adding that the result of the rationalisation was the successful roll-out of O'net services last week.

The firm chief agreed that the business plan of the outfit under the supervision of his predecessor was faulty, adding that the idea that it would roll-out its services within 90 days as indicated in the loan package was unrealistic.

He, however, assured stakeholders, including dealers, subscribers and owner-states that the new O'net was a clear departure from the TDMA deployed by the Odu'a net, stressing that they were sure to get value for their money.

Jimoh disclosed that tight fiscal measures were in place in the new outfit, while every transaction was made to pass through due diligence to ensure probity and accountability.

All efforts to get Apampa and Omotoso proved abortive as several phone calls made to Apampa were picked by her personal assistant, who identified herself as Bola Ajetunmobi and said she was busy.

When she eventually called to acknowledge the calls, she gave an appointment for Ibadan which she never honoured.

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Comments (8)

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Obinna(Newark Nj)says...

I want to know more meaning and significant of this name obidike in igboland

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Olusola Okhiria Nee Sodunke(Newport, Newport, UK)says...

This is a great piece of history, which is dear to our hearts as people and very much appreciated.

Many thanks to the people who worked hard in the past and those who are still making efforts to keep the institution.

The labour is obviouly worth it. We are proud of you all.

A lot still to be done, with the motivation of the champions of this course, others will follow as well to maintain the institution

May God continue to keep the edifice for development of future generations to the glory of God and the benefits of our fatherland.

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Joel Efiong(Calabar, Nigeria)says...

This is a great piece. The examination bodies should hire you as ICT consultant.

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Sunday Mbe(Kaduna, Kaduna, Nigeria)says...

ULIMASI means' GOD,THANK YOU' not THANK GOD.

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Sunday Mbe(Kaduna, Kaduna, Nigeria)says...

The name ULIMASI is from the UTUGWANG tribe in OBUDU local government area of CROSS RIVER STATE in Nigeria.