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.
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.
- Why Davido’s Termination of Lil’ Frosh’s Contract for Domestic Violence is a Powerful and Positive Change for Nigerian Society
- #EndSARS Protests and Your Legal Rights if Arrested While Protesting in Nigeria
- AML142: The Business of Music in North Africa
- AML 141: Meet Camille Storm, Founder of C&C Distro, a Kenyan Music Distribution Company
- AML 140: Abiola Oke & Richelieu Dennis Sexual Harassment Claims: Lessons for Employers & Executives