Sometimes, when it rains, it pours. I have had crises in all my businesses, but Zenon’s stood
out for their sheer brutality, frequency and timing. This was the company that launched me
into prominence, and it was where I learned the toughest lessons of business. It was like
being in the centre of a cyclone. We actually called it ‘the storm house.’ We weathered it all,
until we were laid low by the perfect storm.
As I described earlier, this was a double whammy: the 2008 crude oil price crash and
the devaluation of the naira in 2009, which forced me into the arms of ‘saviour bank’
AMCON.
How did I go from a positive balance into the red in the blink of an eye? It is in the
arithmetic. I had loans in dollars, and the interest was in dollars. I took the loans at
₦117/US$1, but now had to pay back at ₦165/US$1 following the devaluation of the naira.
As covered in Lesson Three, there was also the differential between what I’d bought
shiploads of diesel for and how dramatically the price plunged before I could sell a drop.
All told I lost more than US$1,317,000,000 which was ₦220 billion through the
devaluation of the naira, plunge in oil from US$147 to US$34 and the stock market crash.
It was devastating, like a terrible nightmare, but a nightmare would have been better:
day would break, and I would wake up. There was no waking up from this. One moment, I
was the darling of the banks, who did everything in the world to court me, do business with
me, give me loans, take deposits from me. They would send bewitching ladies to make their
offers more convincing, and now I was waking up to the sight of hefty, barrel-chested men
standing menacingly in front of my gate, waiting for the moment I’d step out of my
compound.
For the competitors who had been at the receiving end of my ruthless winning streak,
it was time to gloat, even though the crises had not spared them. Yet, seeing blood on my
forehead gave them some excitement. For those who couldn’t stand my guts, it was ‘good
riddance to bad rubbish.’ I’ve been told that they would often speak with derision about how
I owned a yacht and had ordered a private jet. I could hear their words dripping with envy
and malice.
In fact, I was to blame, despite the economic crash helping our demise along. It was
all down to deeper causes—a series of mistakes and poor decisions on my part. I believe the
journey to the abyss started when the crude oil price rose to US$147 a barrel in July of 2008.
That was the highest price ever. As I recounted earlier, I had product worth about US$500
million on the high seas, on its way to Nigeria. I fancied myself a brilliant businessman,
about to make a lot of money. But it would not come to pass.
If I had had a solid management structure, I would have received better professional
advice and taken more informed decisions on the cargo. For instance, before I’d purchased
boatloads of diesel, management could have said, “If oil prices collapse, what next? At what
price will we sell? We can’t buy at US$147 and sell at US$146!” That would have made me
see things from another angle.
They would have advised me—those astute advisers that I didn’t have— to bring in
the banks and hedge, so I would have been better protected. If the price fell, I wouldn’t have
borne the brunt all alone. Before making the final buying decision, I had asked my CEO for
her opinion. “Prices won’t come down,” she confidently said, setting the stage for the
disaster. “Let’s bid.”
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