Music Business

Where is the Loyalty? Peter Okoye Launches New Record Label, What Next for P-Square?

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Peter Okoye Does Marriage Hurt CareerHey AML People, what’s good?

A question for you. Can someone explain to me  why Peter Okoye has just launched his own new record label called P-Classic, according to his tweets and reports by the likes of Bella Naija, Linda Ikeji et al.?

Can your answer please address his fiduciary duty of trust and confidence and loyalty, as a share holder and co-owner of Square Records Limited, owed to Square Records? Isn’t it basic business law (USA)/Company Law (Nigeria) principle, that there is a duty of loyalty in every corporation among its controlling shareholders, board of directors and officers to act in the corporation’s best interest. Indeed, you as a shareholder/co-owner/officer of an incorporated business can’t have a situation that creates a conflict of interest which puts your own interest ahead of the corporation. Abi dis one just be oyinbo grammar? We go just do am Naija akproko style?

It is irrelevant that you are in business with your wife, brother, sister, best friend, girlfriend, or cousin. The fundamental principle does not change because the business, where it is incorporated, is its own separate entity as if it was a separate person and has nothing to do with you and your brothers, sisters, friends, lovers, cousins et al.

A corporate fiduciary breaches his/her duty of loyalty when he/she diverts corporate asset, opportunities, or information for personal gain.

Peter and Paul Okoye are signed to Square Records Limited as artists, a label they co-own with their elder brother Jude Okoye. All three are shareholders with equity stake in the business. For years now, Square Records has operated both as a record label and a management company. Jude Okoye is the CEO of Square Records.

Almost two years ago, Jude Okoye announced he was launching his own record label called Northside Music Group.

I raised the question of a conflict of interest since he is CEO of Square Records, a shareholder and also a manager of Square Records’ artists who happen to be co-owners of the business.  I felt he would be usurping any corporate opportunity Square Records may have been interested in. It didn’t make sense.

In his press release for his new label, Jude never denounced his roles/identities as CEO, Manager, Shareholder,  and co-owner of Square Records. Jude, nevertheless, shrugged shoulders and moved on with launching his company of which he now has the rising music star Cynthia Morgan signed to. Cynthia Morgan, by all indications, can potentially rake in a lot of money for North Side. That money should arguably have been going to Square Records.

As if Jude’s move was not enough, now we’ve got Peter Okoye who has now launched his own  record label P-Classic Records.  Peter took to social media to make the announcement  and to let us know his first signee/artist is Malcolm Obinna Clint Onyeyiri, his cousin.

The actions by the Okoye brothers, to me, are red flags. This has really nothing to do with the fact that they are brothers. The focus is on how three business men and owners of a business seem to just disregard the loyalty obligations to Square Records, a completely different legal entity from the three brothers and are creating companies that completely usurp the opportunities for Square records.

Why does this matter? This is the stuff Nollywood movies are made of. You often see those Nollywood movies where there is complete lack of due care by the officers and share holders of the company, there are flagrant diversion of corporate assets, there is self dealing, usurping of corporate opportunity and so much more. When you get out of Nollywood, you see the same scenario on a broader scale with the Nigerian government where citizens accuse the officials we place to run non-profit organizations and the country of the same breach of fiduciary duties and flagrant disregard of the rules.

If we accept this on an individual/business level, why shouldn’t we accept when the Nigerian government does what it does? After all, isn’t the Nigerian government a reflection of its people?

So I am curious, where is the loyalty to Square Records from Peter Okoye?

AML People, what’s your take? Please educate me and the AML community. Maybe I am missing something in the way corporate governance structures and corporations operate in Nigeria.

Cheers,

Uduak

P-Classic Record Obinna

If you have never head of P-Square, Meet P-Square in the Music Video – Africa’s top band made up of two twins Peter and Paul Okoye.

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Africa Music Law™

AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa's rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

Credited for several firsts in the fashion and entertainment industry, Ms. Uduak is also a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her law firm’s intellectual property law, media, business, fashion, and entertainment law practice areas. She has litigated a wide variety of cases in California courts and handled a variety of entertainment deals for clients in the USA, Africa, and Asia.

Her work and contributions to the creative industry have been recognized by numerous organizations including the National Bar Association, The American University School of Law and featured in prestigious legal publications in the USA including ABA Journal and The California Lawyer Magazine. She is also an Adjunct Professor at the prestigious Academy of Arts University in San Francisco.
For legal representation inquiries, please email (uduak@ebitulawgrp.com). For blog related inquiries i.e. advertising, licensing, or guest interview requests, please email (africamusiclaw@gmail.com). Thank you for visiting Africa Music Law™.

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3 Comments

  1. BENJAMIN DAVID says:

    You are not missing anything. Your article is on point. That's why we have rich people in Nigeria especially the southeast without having wealthy people. There is lack of structure in the way we run our businesses and empire , that's why huge companies like our transport moguls lose everything when the are gone. No concrete / loyal structure to any successful brand/ business.

    1. Ben, thanks for the insight. I thought it was just me noting this pattern with the P-Square band.

      Cheers,
      Uduak

  2. quite an insightful article, it goes a long way to show how businesses are run in this part of the world, there is no trust and loyalty to a common cause, imagine such an occurence within a close family tie as portrayed above in the case of the Okoye brothers.

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