"Too Big to Fail": The Dismantling of the Fotso Group

 Fotso Victor

The recent global financial crisis is having a heavy impact on businesses around the world. Western companies with relatively transparent auditing rules took the blow, with the devastation in full view and in real time. But this is not true in some parts of the world.

Most companies in sub saharan Africa operate in a loosely regulated environment. Their annual revenue and  liabilities are rarely made public. In fact, few outside of the founders and some very close and trusted people in their inner circles even know how big some of these companies are.

Until recently, this was the case with the Fotso Group in Cameroon. What started as a small commodity importer grew to an agro-industrial giant spread over several west African countries where they produced  varied goods such as matches in Liberia, batteries in Senegal, insecticides in Mali and green beans for export in Cameroon.

The rapid and spectacular growth of this group was supervised by the discreet Fotso Victor. He made his millions silently without any flamboyance. As he aged, he initiated the gradual process of easing his son, 50 year old Yves Michel Fotso  into the chairmanship of his business empire. 

 Yves Michel Fotso

The sudden appointment of his son as director general of Cameroon Airlines in June 2000 deviated him from the grooming he was getting to take over the Fotso Group. Before long, the public became interested in his activities when he began talking in the media of billions of francs and of his businesses. He also seemed to love the attention. It may have been one of the many reasons why the Fotso Group came under scrutiny by the press and authorities.

Thus started the troubles that have repeatedly thwarted the expansion of many West African companies, making them less competitive in the global economy. In 2008, it was reported that the flagship of the group, a bank known as Commercial Bank, with subsidiaries in many countries in the Central African sub-region had gone into receivership. This was done quietly, ostensibly to avert a run on the bank, but once the news broke out, the Central African Banking Commission didn't refute the allegations lending a semblance of credibility to the story. 

This week, news out of Cameroon seems to indicate that the heir apparent to the Fotso Empire might have been involved in a fistfight over several billion francs. This is a first in Cameroon. Time was when issues involving such sums of money were discussed, so quietly, you wouldn't even know a meeting was going on. This was a system based on trust. One that allowed the elder Fotso to build his agro-industrial empire. Magnates of his caliber have all disappeared from the economic landscape in Central Africa.

The deeper and fundamental question is to ask why is all of this happening now? Could there be a mastermind, one so good at his game that he can read the play of others, then plan decades before the others realize what they have gotten themselves into. Right now, Cameroon has no one who can say he is a  billionaire in CFA, and whose wealth can be traced to legitimate sources. Consequently, there can be no real voice to speak out against corruption, heavy handedness of officials, or serve as the sponsor of a viable home grown opposition. 

The Fotso Group may have dug its own grave by becoming too big, very powerful, and so well connected that it threatened some in high places. If this is the case, then we will likely see more drama in the coming months as whoever may be behind the dismantling of this giant, seems to love what they are doing and they are taking their time...