Final Report Client Work Product
Flour Mills of Nigeria Plc Confidential
Flour Mills of Nigeria Plc and Southern Star Shipping, Inc
Final Report
CLIENT WORK PRODUCT
ConfidenTial
To: Mr. Daniel Maldonado, Bunge Latin America
Date: March 7, 2011
Table of Contents
INTRODUCTION 4
Methodology 4
Southern Star Shipping Company 7
George S. Coumantaros 8
John G. Coumantaros 10
Flour Mills of Nigeria Plc 11
Nigerian Directors of Flour Mills of Nigeria Plc 13
INVESTIGATIVE FINDINGS 15
United States 15
Southern Star Shipping Co., Inc. 15
Corporate Information 15
Litigation History 16
U.S. Federal: Criminal and Civil 16
State: Criminal and Civil 17
Miscellaneous Records Check 18
Uniformed Commercial Codes (UCCs) 18
US Tax Court 18
Real Estate Properties 18
Media Review 19
George S. Coumantaros 19
Background 19
Corporate and Professional Affiliations 21
Litigation History 22
U.S. Federal: Criminal and Civil 22
State: Criminal and Civil 22
Miscellaneous Records Check 23
Uniformed Commercial Codes (UCCs) 23
US Tax Court 23
Properties 23
Media Review 24
John G. Coumantaros 25
Background 25
Corporate and Professional Affiliations 25
Litigation History 26
U.S. Federal: Criminal and Civil 26
State: Criminal and Civil 27
Miscellaneous Records Check 28
Uniformed Commercial Codes (UCCs) 28
US Tax Court 28
Real Estate Properties 28
Media Review 29
Nigeria 29
Flour Mills of Nigeria Plc 29
Overview 29
Capital Raising & Expansion 31
Directors 31
Shareholders 32
Subsidiaries 33
Reputation 46
Ahmed A Joda 50
Emmanuel Ukpabi 52
INTRODUCTION
FTI Consulting, Inc. (“FTI”) was retained by Bunge Latin America (“Client”) to conduct a due diligence investigation of Flour Mills of Nigeria Plc and Southern Star Shipping Company Inc., a United States corporation. Specifically, the focus of this investigation is to identify any information of potential material concern that may be deemed to be prejudicial against the two companies. This investigation was conducted in Nigeria and the United States.
Southern Star Shipping Company, Inc. is a privately held company based in New York, USA.As part of this investigation, two principals of Southern Star Shipping Company, Inc., were also investigated to identify any possible negative issues or potential issues of material concern. These individuals are George S. Coumantaros and John G. Coumantaros.
Flour Mills of Nigeria Plc is a publicly traded company on the Nigerian Stock Exchange. As part of this investigation, Flour Mills of Nigeria’s subsidiaries and two principal Nigerian Directors were also included.
Methodology
The investigation in the United States encompassed comprehensive searches of state and federal criminal and civil records to identify any past and/or current litigations, tax proceedings and bankruptcies. Additionally, U.S. public records, proprietary and restricted-access databases were searched to identify liens, tax and administrative proceedings, real estate and other financial information. Additionally, the investigation included a review of corporate registries to identify potential share holdings, directorships and/or other involvements in corporations, affiliates, and business partners and activities. Confidential inquiries were also made with high-level business sources in the industry to further establish the reputations of the individuals.
Searches were conducted of in-house databases and international black lists naming individuals and organizations suspected of involvement in criminal or unethical behavior. The searches incorporate lists produced by various international organizations such as the World Bank, The Office of Foreign Assets Control (OFAC), the FBI and the European Union Blacklist.
Likewise, a comprehensive on-line search and review of U.S. and global media was conducted, as well as consultations of specialized, proprietary and restricted access databases, in order to develop relevant personal, professional and legal information regarding the U.S. entities and individuals.
A similar investigative approach was taken in Nigeria and included collecting and reviewing corporate registry filings of Flour Mills of Nigeria Plc and its subsidiaries to identify date of incorporation, shareholders, directors, and other pertinent data. Financial statements for Flour Mills of Nigeria filed with the Nigerian Stock Exchange were also obtained to identify significant shareholders.
Additionally, confidential inquiries were also placed with the following sources:
· Senior sources at the Economic and Financial Crimes Commission, to identify possible past and current investigations into the Company and/or its subsidiaries.
· Senior political contacts in Nigeria to determine Flour Mills’ political relationships, including and any implications of the April 9 presidential election.
· Security professionals to identify security concerns that may exist in Nigeria or past security incidents involving the Company.
· Counter-parties of Flour Mills obtain information on past business transactions, relationships and any other issues that surface.
· Additional trusted sources to obtain reputational information on the Company.
Additionally, in-depth local and international media searches were conducted through public and restricted access databases.
EXECUTIVE SUMMARY
Flour Mills Nigeria Plc (“FMN”) is the holding company of a diversified Nigerian industrial group with operations in food production and marketing, shipping and cement. It listed on the Nigerian Stock Exchange on August 14, 1979.
As reported in its 2009 Annual Financial Statements submitted to the Nigerian Stock Exchange, approximately 48% of FMN’s shares are traded publicly, without further specification of ownership in regard to these.
The same report identifies the majority, private shareholder of FMN as Excelsior Shipping Company Limited, with 51.59%.
George Coumantaros and his family are believed to be the owners of Excelsior Shipping Company Limited. Excelsior is incorporated in Liberia and inquiries with the Liberian registry confirmed that the company is owned by Greek interests. A 1964 U.S. civil litigation case against a Liberian registered shipping vessel names John Coumantaros, George Coumantaros’ son, as Excelsior’s sole shareholder.
A source within the Nigerian Stock Exchange identified West African Investments Company Ltd. as owner of 4% of FMN publicly traded stock and stated that several FMN directors had less than a 1% ownership interest in the company. No additional information on West African Investments Company was identified at this time.
The following is the summary of additional principal findings of the investigation into Southern Star Shipping Company and Flour Mills of Nigeria:
Southern Star Shipping Company
· Southern Star Shipping Co., Inc., specializes in merchant shipping of bulk cargo. It shares a name with a subsidiary of Flour Mill of Nigeria, Southern Star Shipping Company (Nigeria) Limited.
· The company was incorporated on July 15, 1947, in New York. It is currently an active company located at 712 Fifth Avenue, 33rd Floor, New York, New York 10019-4102. It was previously incorporated in Louisiana on October 13, 1978, but it is currently inactive in that state.
· Corporate records listed the following officers:
§ George S. Coumantaros – CEO, CFO
§ George D. Kapetanakos – Finance Officer and Executive Secretary
§ Martha Romo – Agent and Sales Executive
· FTI was initially advised by the Client that Southern Star Shipping Company, Inc., was believed to be the entity through which George Coumantaros owns the majority interest in Flour Mills of Nigeria Plc. However, as mentioned previously, it is Excelsior Shipping Company which privately owns the majority interest in Flour Mills of Nigeria Plc, with 51.59%.
· FTI identified six federal civil records and one state civil record under the name of Southern Star Shipping Co., Inc. All of the cases appear to be related to the nature of the business and all except one are closed. The only current open case was filed in Pennsylvania on January 27, 2011, and names multiple plaintiffs and defendants, including Southern Shipping Co, Inc. The case relates to maritime commerce regulation in the U.S., specifically asbestos products.
· An additional court of appeals case filed in 1987 named Southern Star Shipping Company, Inc., and West Wind Africa Line, Ltd. as defendants. Southern Star Shipping Co., Inc., was dismissed from the original case prior to trial. Southern Star Shipping Co., Inc., was the shipping agent of Westwind Africa Line Ltd., a Liberian corporation which media reviews indicated may be related to George Coumantaros.
· No state or federal criminal records were identified under the company’s name. Also, no additional tax, credit, or other regulatory issues were identified.
· Extensive media searches on the company did not reveal any negative information. In fact, FTI found very limited information available on the entity through detailed searches using multiple publicly accessible and restricted access databases.
George S. Coumantaros
· George S. Coumantaros and his son, John George Coumantaros, control Southern Star Shipping Company, Inc., Flour Mills of Nigeria Plc and its subsidiaries.
· As previously mentioned, George Coumantaros and his family are believed to be the owners of Excelsior Shipping Company Limited, the controlling shareholder of Flour Mills of Nigeria Plc. Excelsior is incorporated in Liberia and details of its corporate records are held with the Greek branch of the registry, which is located in Piraeus. Since it is common for Greek shipping companies to be registered in Liberia, a corporate registries office is located there.
· Verbal inquiries with the Liberian registry established that Excelsior is owned by Greek interests. A 1964 case of U.S. litigation claim against a Liberian owned vessel names John Coumantaros as Excelsior’s sole shareholder.
· The Coumantaros family is a well-connected Greek-U.S. shipping family and has a significant profile on the New York social scene, where it appears to be extremely well connected.
· Politically, the family also appears to have important ties. FTI noted several contributions to the Republican Party, as well as an apparent family connection to John Negroponte, a former senior U.S. diplomat under the George W. Bush and Ronald Reagan administrations whose ambassadorial posts included Iraq in 2004 and 2005, following which he was the Director of National Intelligence until 2007.
· George Coumantaros holds a leadership position with the following corporations:
§ Southern Star Shipping Company, Inc. – Founder, CEO and CFO
§ Flour Mills of Nigeria Plc – CEO
§ Interstate Grain Corporation (U.S. entity) – Director
§ Athens College – U.S. Board of Trustees
§ The West of England Ship Owners Mutual Insurance Association – Former Vice Chairman
· FTI identified one federal civil litigation case naming George Coumantaros. The case was filed against Southern Star Shipping Company for alleged job discrimination demanding $250,000 in damages. The case was closed and apparently settled out of court in 1998.
· Research in a nationwide index of federal courts maintained by the U.S. Department of Justice did not identify any criminal, or bankruptcy proceedings involving George Coumantaros as a plaintiff or defendant.
· Research in statewide indices of criminal history and civil dockets did not identify any legal proceedings involving George Coumantaros as a plaintiff or defendant.
· Through researching address histories and registered assets, FTI established that George Coumantaros has the profile of a very wealthy individual. He owns a property on Fifth Avenue in New York appraised at US$15.4 million, a multi-million dollar sailing yacht, and five properties in the Greenwich, Connecticut.
· FTI did not identify any disparaging information on George Coumantaros in extensive and detailed media searches. Most media articles were related to his hobby of long-distance sailing races involving exclusive yacht clubs.
· Discreet inquiries into George Coumantaros’ reputation provided no negative information and depicted him in a positive manner. One Lagos-based corporate source stated that George Coumantaros is widely viewed as the driving force behind Flour Mills of Nigeria Plc and is responsible for its profitability. Another source also noted him to be well regarded among Nigerian shipping and business circles.
John G. Coumantaros
· John George Coumantaros was born on December 10, 1961, and resides in New York. He is the son of George Coumantaros and information indicates that he is currently the ultimate holder of the family’s stake in the family’s companies.
· John Coumantaros holds a leadership position with the following corporations:
o Nigerian Entities
§ Flour Mills of Nigeria Plc – Group Managing director
§ Nigerian Bag Manufacturing Company (Nigerian Entity) – Chairman
§ United Cement Company of Nigeria (Nigerian Entity) – Chairman
o U.S. Entities
§ Kestral Navigation, LTD (owns the families two yachts) – President
§ Greenfield Summer, LLC – Manager
§ Concordia Investments, LLC – Manager
§ Oxbow Carbon & Minerals, LLC – Former Manager
§ Long Island Sound Realty Corp. – Former President
· FTI identified one federal civil litigation case naming John Coumantaros. This is the same case mentioned previously against Southern Star Shipping Company, Inc., and also naming his father, which alleged job discrimination.
· Research in a nationwide index of federal courts maintained by the U.S. Department of Justice did not identify any criminal, or bankruptcy proceedings involving John Coumantaros as a plaintiff or defendant.
· Research in statewide indices of criminal history and civil dockets did not identify any legal proceedings involving John Coumantaros as a plaintiff or defendant.
· FTI did not identify any disparaging information on John Coumantaros in extensive and detailed media searches. Most media articles related to his sailing pursuits.
Flour Mills of Nigeria Plc
· Flour Mills of Nigeria Plc (“FMN”) is Nigeria’s market leader in the production and marketing of flour and flour products. It is the apex company of a diversified and vertically integrated Nigerian holding company with subsidiaries in the cement, shipping and food manufacturing industries.
· FMN and its subsidiaries Nigerian Bag Manufacturing Company and Northern Nigerian Flour Mills are listed on the Nigerian Stock Exchange. The group has a high profile as one of Nigeria’s largest and most established business conglomerates.
· An April 2010 report by analysts at HSBC’s Global Research team expected FMN’s main rival Dangote Flour Mills to remain a “distant second” to FMN, which it predicted to retain a 46% market share until 2013.
· The company’s 2009 Annual Report named its shareholders as Excelsior Shipping Company Limited (51.59%), West African Investments Company Ltd. (4%), with the remaining shares being publicly traded.
· Corporate filings in Nigeria list the company’s directors as:
George Stavros Coumantaros(Chairman) / Alhaji Ahmed Joda
(Vice Chairman) / Emmanuel Akwari Ukpabi (Managing Director)
Aris Plytas / Alhaji Ali Kotoko / Folarin Rotini Williams Junior
John N. Katsaounis / John George Coumantaros / Adebayo Alade-Loba
Rabiu Muhammad Gwarzo / Alhaji Abdullahi Ardos Abba / Thanasis Mazarakis
Atedo N. A. Peterside / Alhaji Yunis Olalekan A. Saliu / Eric David Rainton
· FTI identified the following subsidiaries of FMN and FMN’s ownership interest in them: