Following the crisis that is rocking HealthPlus Nigeria, entrepreneurs have called on the Federal Government to protect their businesses from what they described as alleged forceful takeover by some private equity firms.
The business owners also identified foreign equity firms as major threats to the well-being of Nigerian entrepreneurs and their businesses.
They disclosed this at the recent interactive session organised by Business Founders Coalition (BFC) in Lagos.
During the session, Coordinator, Business Founders Coalition, Dr Richardson Ajayi, explained that private equity firms are preying on Nigerian businesses and are seeking to push their founders out.
This, according to him, threatens the nation’s dream to build and nurture vibrant private sector businesses capable of competing with global brands and also reduce employment opportunities for the youth.
He said, “The government and other stakeholders need to understand the plight of Nigerian entrepreneurs who out of sweat and grit started their businesses but at some point in the pursuit of growth, have had to access venture capital funds or foreign investments.
“Our experiences have largely been tales of woe, which have the possibility of stunting the growth of indigenous businesses like ours. We are also hoping that through this coalition, government can enact policies and laws that will correct that apparent lop-sidedness.”
According to Ajayi, who is also the Founder of former Parthcare, now Synlab, most local businesses have been struggling due to unfavourable operating environment and lack of access to finance to grow their business, hence they approach foreign investors and venture capitalists to invest in their businesses.
While he acknowledged that there are many good private equity companies that have accomplished successful private equity transactions, as well as those that understand the challenges of the market and are patient with their local partners, Ajayi noted some others seek controlling rights as a major condition to invest and in the long run forcefully takeover the businesses.
Also at the session, Founder, HealthPlus, Bukky George, called for evolution of policies that would regulate activities of private equity firms.
According to her, bringing a private equity firm into the operation of HealthPlus was to enable the company to meet the demand for high quality yet affordable healthcare and beauty supplies through distribution centres in Nigeria.
She said, “Unfortunately, the pledged funds were never fully disbursed in order to implement our strategic objectives.
“Our partnership has been fraught with serious challenges and unmet expectations, jeopardising operations and relationships with our stakeholders.”
George urged the Central Bank of Nigeria (CBN) make flexible loans available to the health sector such that cash flows of companies would be considered as against only collateral.
She said that doing so would enable businesses scale up in order to achieve their potentials, enhance the economy and development of the health sector.
Managing Director, CMC Connect Ltd, Mr Yomi Badejo-Okusanya, explained that the coalition was not about a single organisation, but about changing policies to assist businesses to thrive and boost investment.