When the Economic and Financial Crimes Commission recently arraigned Adeniyi Elumaro for allegedly perpetrating a 404 million naira fraud, he and his partner Rakiya Mamman, dominated the news headlines. After all, the list of alleged victims read like a mini Who’s Who of politicians and dignitaries: Bayero Nafada, the Deputy Speaker of the House of Representatives; Mohammed Bello Adoke, the Attorney-General of the Federation; Babatunde Oshotimehin, a former Minister for Health; Farouk Lawan, a powerful and long-serving representative and thirteen other investors who contributed millions to Elumaro’s Integrated Capital Services Limited, ICSL. The incident shocked his colleagues in the private sector where Elumaro had built a reputation as a serial entrepreneur, financier and technophile.
A brilliant student, Elumaro earned a first-class degree in business administration from the University of Benin and spent ten years at Andersen Consulting where he rose through the ranks to head its Strategy Organisation and People department. He later moved to the Tony-Elumelu backed Heirs Alliance Group and took up a senior management position as an Executive Vice-President. After the United Bank for Africa merged with Elumelu’s Standard Trust Bank, he was tapped to lead the group’s insurance unit and ran it until 2007 when its general business arm was sold to Jimoh Ibrahim’s Nicon Insurance. At this time, the stock markets stratospheric growth encouraged him to skip the humdrum grist and become an entrepreneur. His first move was to set up Investcorp Capital and engineered a buyout of Integrated Capital Services Limited, an obscure subsidiary of the defunct Chartered Bank. It had been established in 1989 as a specialised retail currency trading outfit and Elumaro was ostensibly interested in its marquee value as he immediately set out to make ICSL the core of his fledgling business.
He then teamed up with Lai Labode, a lawyer and business consultant, to launch Salt and Einstein, the Abuja firm that would play a major role in the birth of MoneyBox Africa. The partners initially started the firm as a business incubator and were working on many harebrained ideas till they came up with the blueprint for a mobile payments system. They incorporated the new company and Elumaro became its first chief executive. They promoted the firm with evangelical fervor. Touted as West Africa‘s first mobile payments ecosystem, MoneyBox Africa’s technical agreement with Paybox, a leading European mobile payments outfit, provided it with enough credibility to attract international investors and a clutch of local companies including Interswitch, eTranzact, Nextzon and Intercontinental Bank soon signed on as partners. The novel startup also received a considerable grant from the African Enterprise Challenge Fund.
It’s difficult to say if Elumaro was simply an ambitious businessman or a Madoffian swindler but at the same time he was raising 10 million dollars for MoneyBox, he was also shopping for 3 billion naira for Citilink Marine, a ferry operator that was supposedly a joint venture with the Federal Government and Lagos State. He seems to know a thing or two about doing business in Nigeria. His companies are chaired by industry stalwarts such as former Accenture chief Adedotun Sulaiman and JKK founder Tunde Yusuf and he is a tireless self-promoter and networker. In the case of MoneyBox Africa, he managed to complete a billion naira private placement even though the company previously had a paid-up capital of only 5 million naira. This placement earned ICSL millions in consulting fees and all of MoneyBox Africa’s initial promoters; ICSL, Salt and Einstein, SWIC Microfinance Bank and M.I.S.S had direct ties to him.
Elumaro has been in trouble with the law before. In November 2008, Odiki George, the chief executive of Tamstel Nigeria Limited accused him of fraud and asked the Special Anti-Fraud Unit of the Police to investigate ICSL. George had invested 50 million naira with the firm after being promised an unbelievable 175% return. When the company repeatedly failed to meet its obligations, the police stormed ICSL and arrested its top executives. That episode didn’t stop Elumaro and it seems he is not losing much sleep over his recent humiliation by the EFCC. A silver-tongued operator and big dreamer, he is already planning his comeback. ICSL recently unveiled plans to a 2 billion naira recapitalisation plan with the injection of 1 billion by a mystery investor. The company says it will divest some core assets, establish an advisory practice and launch energy, commodity trading and brokerage units.
MoneyBox Africa has just rolled out its mobile payments service and the company seems an attractive proposition on paper. It has first-mover advantage in a potentially high-growth industry and is chaired by the highly-connected Sulaiman who also heads the boards of several local technology companies including Interswitch. But ICSL still has a majority stake and Elumaro, who is now the vice chairman, still calls the shots. David Kaye, the company’s new chief may be a respected engineer and geeky SAP consultant, but he is also a personal friend of Elumaro and served under him before landing the top job. Mobile banking is a sensitive business and MoneyBox Africa is still Nigeria’s only CBN-licensed mobile money operator. Given the recent turbulence in the local financial markets, one wonders if it is safe to leave the company’s future in the hands of an ethically-challenged snake oil salesman.