The Advertising Regulatory Council of Nigeria (ARCON) formerly known as APCON has ordered that the lingering debt issue between Hayat Kimya and Mainsail Media be resolved with the next 7 days as the Council holds that a client cannot investigate agency in perpetuity.
Hayat Kimya Nigeria Limited through its parent company, Hayat Holding, a Turkish enterprise with presence in several countries including Nigeria, had engaged Mainsail as its Media Independent agency to coordinate media buying and placement for Hayat Holding.
The 7-day marching order was arrived at as a way out of the logjam having considered the fact of the case as deduced at the APCON/ARCON mediatory meeting on the 24th of May at the APCON House, Lagos.
Efforts by BrandCrunch to present the side of the company failed to yield results as attempts at getting officials to comment on the development proved abortive. Mr. Motayo Olatunji, Sales Director, Hayat Kimya, directed BrandCrunch inquiry to Roseline Abaraonye, Marketing Lead, at Hayat Kimya Nigeria. Mrs Abaraonye response was non-committal on the issue. She said, “Thank you for reaching out to us on the case. It is currently a legal issue, hence, I cannot comment on it at the moment. I will keep you updated”.
Meanwhile, the fact of the case that led to the marching order made available by ARCON indicates in part, “Sometime in June 2021, Hayat Kimya alleged that a whistle-blower sent information that Mainsail was fraudulent in executing media contracts in connivance with a media monitoring service provider.
Hayat Kimya Head Office instituted an investigation of the allegation into the matter without the knowledge or involvement of its Nigeria office. Notwithstanding the whistle-blower’s report, Hayat Kimya was said to have continued to conduct business with Mainsail until sometime in September 2021. Hayat Kimya disengaged Mainsail in November 2021, the outstanding invoice as at the time was N481,349,854.45 (Four Hundred and Eigh-One Million, Three Hundred and For-Nine Thousand, Eight Hundred and For-Five Naira, For- Five Kobo only)”.
Part of the fact of the case established by ARCON and made available to BrandCrunch also claims, “Hayat Kimya did not inform the Management of Mainsail of the alleged whistle-blower report until the meeting called by the advertising industry regulator – the Advertising Practitioners Council of Nigeria (APCON) now the Advertising Regulatory Council of Nigeria (ARCON)”.
It also alleges that Hayat Kimya offices have ignored all correspondence from Mainsail and failed to liquidate the outstanding debt as the subject of the allegation has been ongoing for over 12 months.
To demonstrate industry involvement in the matter, the Media Independent Practitioners Association of Nigeria (MIPAN), as Mainsail’s Sectoral Group, had sought to intervene and reached out to the Management of Hayat Kimya Nigeria Limited on the issue to no avail.
“Mainsail consequently reported the matter to APCON (as it then was) through MIPAN. APCON (as it then was), wrote letters to Hayat Kimya requesting for a meeting, but was replied that the issue was under investigation by another government agency hence the company will not respond to any inquiry or correspondence on the issue”.
The insistence of APCON (as it then was), that the case was not subjudice and was within the jurisdiction of the regulatory authority, compelled Hayat Kimya Nigeria Limited to appear before its committee on 24th May, 2022 in company of Mr. Osamede Uwubamwen the President of its sectoral group, the Advertisers Association of Nigeria (ADVAN).
To arrive at its position on the matter, the regulatory council’s committee noted that the Hayat investigation had been going on for about 12 months (June 2021 to May 2022), a time long enough to have concluded and the issue of indebtedness resolved.
Hence, it frowns on Hayat Kimya’s decision to continue the investigation in perpetuity, which according to the regulator, “is objectionable and injurious to the business and activities of Mainsail in particular and the industry in general”, while noting that all investigations should be concluded within 90 days from the date of the meeting and the issue resolved thereafter.
ARCON, therefore, holds that “Hayat Kimya has failed, neglected and ignored all correspondences from Mainsail; Hayat Kimya has failed, neglected and ignored all overtures to pay its debt to Mainsail; and also resolved to continue the investigation in perpetuity with impunity and disregard to the Nigeria advertising industry regulations”.
The implication of the foregoing according to ARCON is that Mainsail being a media-buying agency, the bulk of the money is owed to Nigerian Media houses and third-party suppliers across several sectors while the money owed has lost substantial value over time due to inflation and the rising cost of business operations.
The Council also frowns at the fact that Hayat Kimya has moved on with its media buying business and doing business without recourse to the alleged indebtedness. ARCON describes Hayat Kimya’s impunity over the matter as a “sad example of one of the root causes of decadence in the Nigerian Advertising Industry”.
While officials of Hayat Kimya refrained from comments in the meantime, Roseline Abaraonye, Marketing Lead, Nigeria claims it will be subjudice to comment but promised, “I will keep you updated”.