You might have heard that Michael Ugwu was fired from his job as CEO of iROKING for “gross misconduct”, but it seems that there’s a lot more to the story than that.

Before the other blogs regurgitated Iroko’s press release on the issue, Jason Njoku (Founder, IrokoTV & Spark) had published a blog post about having to ‘retire’ 13 people from his company. In the post, he explained that the reason for the layoffs was to optimize the size of the group at this time. He was gracious – calling them loyal friends and expressing regret at the painful but necessary action.

Techcabal has since gathered that they were all former iROKING employees. Sources familiar with the situation have suggested that this makes up a large chunk of the local iROKING team, leaving the company running skeletal services. We’ve been informed that iROKING’s numbers aren’t exactly going up and to the right. Piracy of music is still too endemic to make a killer business. The expense of rights licensing without commensurate revenue was beginning to chafe. It was also suggested that the runway for the venture itself might have begun to run out.

The sources say its owners were mulling over whether to get out of the music business altogether, or at the very least, put it in zombie mode. Michael was to be sent off to manage Spark.

That, perhaps, is where the disagreement occurred. Michael Ugwu seemed to think this approach to music too short-termist. He also wasn’t too thrilled about becoming startup babysitter-in-chief so he decided to leave and strike out on his own. He has re-employed most of fired staff, acquired office facilities, and is on the verge of launching something new in the music space.

In response to these allegations, iROKO’s PR team sent us the statement which you’ve read across the internet. For completeness, we’ll post it below in full.

UPDATE: Michael has released a response to the effect that his purported dismissal and the allegations of contractual breach are greatly exaggerated. He makes some pretty biting assertions of his own.

We are following the story with keen interest and will be keeping you updated.

Statement from Jessica Hope, Global Communications Officer for IROKO

We can confirm that Michael Ugwu is no longer the CEO of iROKING and has left the company. He was dismissed earlier this month with immediate effect for gross misconduct. It came to light that, whilst under contract and salary of iROKING, Michael Ugwu set up and launched his own digital music platform, in direct competition with iROKING. This is an unequivocal breach of the robust non-compete and confidentiality clause he signed when he joined the iROKO team. We will not be divulging any further details on the subject matter for legal reasons.

A number of the iROKING staff have also been dismissed on the grounds of gross misconduct. This action, alongside the dismissal of Michael Ugwu, was taken by the iROKO Management team in order to protect the intellectual property and reputation of our online music platform, as well as our artists’ work.

As part of an organisation-wide restructure, we have decided to streamline the iROKING team based in Lagos, and have now redistributed a number of the core tasks across our global teams in London and New York. These changes have been made in order to make the strategic and day-to-day running of iROKING more effective and productive.

Those who left the company have been given a generous six weeks’ severance pay, which is 50% more than stated in their employee contracts.

iROKING, as one of Nigeria’s leading digital music platforms, continues to showcase some of the country’s most prolific and exciting artists. Since launch, we have recorded over 350 Million YouTube hits for our artists and we have over 1.1 Million users downloading tracks from our online and mobi platforms every month. We remain committed to our artists and our users and continue on our mission to support and develop digital distribution for Nigerian artists.

We expect to announce a new CEO for iROKING in the coming months.

Bankole Oluwafemi Author

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