Wednesday, 5 July 2017

19. Corporate Structures and Laws That Govern

Your business structure can enable you do a lot and stay focused or get you no where – even hinder you or keep you where you are. Most people will take any standard copy of the legal documents of a similar business and copy paste on their articles of association. After being duped by my cousin and losing all I had worked for in the first half of my life, I did different this time round. No one, not even myself would be able to dupe me this time round. While my business structure  and the laws governing are stiff on me, they have enabled all my businesses stay focused and continue to benefit all stake holders. Most importantly we have been able to survive economic turmoil that has made larger companies fold up. Strategy is good, structures that support good strategies, very good, entrepreneurs willing to stop their ego interfering, better, partners who support such decision, best ...

Zan continues, ‘He has always wanted to impress him though the things he desires are always the exact opposite of what his dad wants. They have this love hate relationship. He is Chiefs only true son but his half brother has more the characteristics of Chief and is more obedient. Chief hoped he would take over after him, when Uncle passed on the legal documents to me, Chief was going to make him his sole hire but his persistence on marrying Elan changed all that. His father did not disinherit him outright but gave him a condition on how he can get his half of the inheritance.’

He is interrupted by Zippy bringing in their food. They wait for her to leave. After she unpacks the bags and serves the food,  Zan continues talking.

‘They initially were disappointed when he married Elan because they were afraid they would not have grand children.’

Leila, ‘ ooo! I suppose that is expected but they must be really ashamed now!’

Zan continues, ‘When he married Elan, the condition was that they should have children and build  Elan Group to be at least half the worth of Chiefs conglomerate within a ten year period. This looked impossible at the time - his father was hoping it would discourage him from marrying her. It is now 5 years. They were going to meet the mark this year but with the changes in the economy, things are working against them. If they meet the mark it would mean that he gets his share of his father’s estate, is a billionaire several times over and is no longer under the control of his wife.’

Leila protests in defense of her friend, ‘But Elan is not controlling!’

‘You will not understand. She doesn’t have to be controlling. A man likes to provide for the special woman and people in his life. It’s psychological - the one who brings the bigger pay check wears the pants-'

She is about to protest more but figures, this is a man speaking from a man’s perspective. May be they could still get an answer to their problem somewhere in there.

Al continues, ‘ In a man’s mind at least! If the lady does, it just makes a normal responsible man feel inadequate. The situation was Ok when Al was younger but he doesn’t like things as they are anymore and wants control.’

This was to a large extent true. On paper and in reality Elan owns the company and Al is just an employee even after all the years. Not  that Elan is mean, in the beginning Al just didn’t care that the structure of the group had no provision for him to get ownership. He could take care of himself and generations to come from his retirement income and his investments. Her advisory board had been very firm on that and the situation had not changed even when they got married.

The other owners were the 3 social businesses that are represented in the board. The only individual owner of Elan group is Elan. She has 70% with the 30% distributed amongst the others. Despite that she only had one vote. She could not interfere in the decisions of the social businesses as their mandate was to act in the interest of the communities they represented. While it was she who had structured her business as she had to ensure longevity and continued community impact even after her demise or in case her attitude changed - she became greedy for whatever reason, it all worked for the good of everyone and the continued impact the businesses had.

‘For him to get part ownership of Elan Group, he either must divorce her which would mean he sues to get half ownership of her shares and is no longer part of the company but this would mean he loses his inheritance as his parents will not accept his divorce at this point. Alternatively he can come up with at least 35% value of the company so Elan can split her shares and the company is worth the target. For that to happen, he needs his inheritance - he doesn’t have that kind of money from any other source as he lost a lot of his investments with the crash of the oil sector. From being worth billions in his own right he is worth only a few millions right now. Had he put his money in Elan group or any other businesses in a different industry, the bad economic conditions could have had a minor effect, but oil has been hit hard. The least resistant path for him to recover is to continue working with Elan, build the company, convince his father of his worth and get his inheritance. That way he can put in the 35% for Elan’s shares while at the same time, he gets his inheritance. Making him Oga at the top!’

Leila, ‘Hmmm! It is good there is an advisory board that Elan can’t interfere with or Elan would just have given him the 35%! She does have a soft spot for-’. She frowns as she realises her words hurt Zan.

‘But really all is not lost. At least we know what his greatest need is. No past girlfriends?’

Al, ‘Not serious ones, not that I know of. The only scandal they have had involved Sadia who tried to date the two brothers but they found out and did not waste a minute kicking her out of their lives.’

Leila, ‘Which Sadia is this, There is a Sadia Johnson who works for Elan.

Zan, ‘She is Sadia Johnson.’

They look at each other nod and smile.


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