Introduction
Moringa SCA SICAR/Moringa Mauritius Africa (‘Moringa’) is deeply concerned by the numerous publications in print and online media of allegations made by Issa Ouedraogo (‘Issa’) against it. The allegations deliberately misrepresent both Moringa’s business practices and legal proceedings that have unfolded between Moringa as investors, and Issa. Issa has maliciously designed these publications to cast aspersions on Moringa’s integrity in the business marketplace and sadly, on the ethical conduct of Moringa’s legal representatives, Bentsi-Enchill, Letsa & Ankomah (‘BELA’). Moringa therefore wishes to address Issa’s allegations and to correct the inaccuracies and misrepresentations made to the public.
Presentation
Moringa is an investment fund launched in 2013 that aims to finance agroforestry projects in sub-Saharan Africa and Latin America to support the development of sustainable agricultural value chains and reduce poverty in often isolated rural zones. In Africa, Moringa has invested in agribusinesses to reinforce their financial structure, supply chain and modernize their plant. In Ghana, B-Bovid buys fresh fruits bunches from smallholders and processes them into red crude palm oil for the local market.
Investment
In 2018, Moringa invested over ₡24,000,000 (the equivalent of $5,000,000 at the time) in B-Bovid Limited (‘B-Bovid’), a palm oil processing company that Issa founded. At the time, B-Bovid owed money a bank, and both B-Bovid and Issa’s properties, which had been used to secure the debt, were to be sold to pay the debt. Moringa and Issa Ouedraogo therefore entered into an Investment Agreement and a Shareholder’s Agreement, for Moringa to invest in B-Bovid and become a large majority shareholder.
BELA’S First Instruction
Moringa’s Paris-based lawyers engaged BELA to provide legal advice on the investment to ensure compliance with Ghanaian law. BELA’s role was confined to conducting due diligence on B-Bovid, reviewing transaction documents, and amending B-Bovid’s constitution to reflect the terms of the agreements between Moringa and Issa. BELA did not negotiate the commercial terms of the transaction or the investment documents between Moringa and Issa Ouedraogo.
Issa’s Mismanagement
Moringa invested in B-Bovid on the basis of a business plan set out in the Investment Agreement and Shareholders’ Agreement, under which B-Bovid was to meet specified financial and operational targets under Issa’s leadership as CEO. However, after Moringa’s investment, B-Bovid (under Issa’s leadership), consistently failed to meet the agreed operational and financial targets, which was the purpose of the investment.
Issa failed to properly manage B-Bovid and placed the company on the verge of insolvency. Moringa then discovered that Issa’s mismanagement had started well before Moringa’s investment, so that the representations made by Issa, and on which Moringa had based their investment, were inaccurate. Nevertheless, in an effort to ensure the sustainability of B-Bovid, Moringa was compelled to extend a loan to B- Bovid, in addition to the investment already made into the company.
Further Investment
In 2019, Moringa engaged BELA to advise on a debt investment in B-Bovid, a EUR 1,200,000 Convertible Loan Agreement with B-Bovid to enable the company make up for shortfalls in the 2019 financial year, provide an opportunity for growth in its operations in the 2020 financial year and also, to finance the company’s needs as budgeted in the business plan. Moringa simultaneously entered into a Share Charge Agreement with Issa and B-Bovid, under which Issa charged all his present and future shares in B-Bovid as security for the loan.
Issa’s Removal as CEO
Despite the fresh capital injection, B-Bovid, under Issa’s leadership, again failed to meet all the key operational and financial targets required under the business plan. This was wholly attributable to Issa’s underperformance and mismanagement of B- Bovid. Indeed, it soon became clear to Moringa that Issa Ouedraogo simply lacked the requisite skills to run B-Bovid as a profitable business. This led to discussions about appointing a new and better qualified CEO, so that Issa would take on the role of President of B-Bovid but on the same salary he enjoyed as CEO, and also maintain his role as director and Chairman of B-Bovid’s board. Issa however refused to resign as CEO, and eventually, was duly removed by B-Bovid’s board. Issa’s removal was lawful and was in B-Bovid’s best interest. B-Bovid’s board also subsequently removed Issa Ouedraogo as an authorised signatory to the company’s bank accounts because he had announced that he would use any means, including illegitimate actions, to challenge the board’s decision.
Issa’s Misbehaviour
Following Issa’s removal as CEO, he refused to vacate his office and stationed armed security personnel at B-Bovid’s premises with instructions to prevent the new CEO and Moringa’s representatives from accessing premises. He forbade B-Bovid’s management personnel from communicating with Moringa’s appointed directors and effectively engaged in a forcible takeover of the company’s operations, managing/operating B-Bovid to the total exclusion of Moringa, its majority shareholder. He directed B-Bovid’s customers to pay proceeds from the company’s sales into his personal bank accounts and took a number of unilateral decisions without consulting or involving Moringa. Eventually, Issa unilaterally shut down the Company and purported to place the company’s workers on redundancy, with no compensation. Moringa has always tried to ensure continuity of operations and to support B-Bovid’s employees. Moringa continued to pay workers’ salaries for a year while operations were halted by Issa.
Arbitral proceedings
1. On 16 June 2021, Moringa instructed BELA to institute arbitration proceedings against Issa, pursuant to the provisions of the Shareholders’ Agreement and the Investment Agreement. This was after Moringa had extensively attempted amicable settlement with Issa, who refused to cooperate. The reliefs sought by Moringa include a declaration that Issa was validly removed as CEO and a perpetual injunction restraining him from holding himself out or acting as the CEO of the Company. Moringa also filed an injunction application to prevent Issa from interfering in B-Bovid’s management during the arbitration proceedings. The High Court granted the injunction, restraining both Issa and the new CEO from interfering in the administration and management of B-Bovid until arbitration proceedings had concluded. Subsequently, the Court appointed a Receiver/Manager as interim CEO until the arbitration had been determined. Despite the injunction and the appointment of a Receiver/Manager, Issa continued to refuse to allow Moringa’s appointed directors access to the Company’s premises. The High Court appointed Receiver took over a factory where some of the critical machines, equipment and vehicles had been burnt into ashes. The Receiver was therefore compelled to establish a permanent security detail at B-Bovid’s factory premises to ensure safety and security, because lssa continues to threaten workers and farmers of B-Bovid.
Enforcement of Share Charge Agreement
2. In April 2021, Moringa instructed BELA to assist with enforcing the Share Charge Agreement because B-Bovid had breached the loan agreement. BELA, acting on those instructions, enforced the Share Charge Agreement and facilitated the transfer of Issa’s shares to Moringa, in accordance with the Borrowers and Lenders Act, 2020 (Act 1052). This is because under article 14 of the Shareholders’ Agreement, that Agreement became automatically terminated and extinguished Issa’s right to serve on the company’s board of directors. The shareholders of B-Bovid therefore held an Extraordinary General Meeting in 2022 to approve a new constitution, which removed all references to the Shareholders Agreement, since it no longer existed.
Unfounded Allegations Against BELA
3. Similarly, the accusations of unethical behaviour and conflicts of interest against BELA are without merit. BELA has filed a full response to Issa’s allegations with the Disciplinary Committee of the General Legal Council, which shows that Issa’s allegations are unfounded and that BELA has strictly complied with legal and professional ethical obligations. What Issa is trying to do, is to give himself the power to dictate who our lawyers should be and how they should comply with our instructions. That cannot be allowed.
Moringa’s Commitment
4. Moringa reaffirms its commitment to ethical business practices and the pursuit of justice. We entreat the discerning public to ignore Issa Ouedraogo’s smear campaign against Moringa and trust in the legal process to unveil the truth. Moringa remains dedicated to resolving the ongoing disputes constructively, in accordance with legal standards, and in the best interest of B-Bovid and all involved parties.
5. After the arbitration, Moringa will continue developing B-Bovid’s activities in Ghana as part of its poverty reduction strategy, which is Moringa’s priority.
