Breach of Contract Saga between Skales & Baseline Records : Skales and Manager Osagie Osarenkhoe Accused of Fraud by Baseline Records – Skales Practically a Slave to Baseline Records, Contract Termination Worst N5 Billion

Few days ago, Former EME Records act and Baseline Records act Skales and his manager Osagie Osarenkhoe was accused of fraud for not remitting any shows booking, endorsement and others related income percentage into the company account.

He and his manager Osagie was reportedly in police custody; implicated in fraud charges against the record Label.

The news of Skales and his manager fraud saga with Baseline Records has flood the blogosphere. Osagie Osarenkhoe is one of the most sought after talent manager in Nigeria creative industry and she has manage acts such as Kel, Banky W, Wizkid in the past, but currently manages Skales  and she was accused of fraud by Baseline Records, home to Skales and Aramide.

Osagie, currently manager to Skales and she has been accused by the record label of stealing the sum of N13,374,000 in the past 12 months. The record label has released a length petition addressed to the Inspector General of Police and right now Osagie is at the Police Station as they try to sort things out.

Though Osagie says that she has been accused of fraud by label she has been covering their shit for over a year now.

The petition reads in part:

On the 11th of July, 2014 the company entered into an Artiste and Record Company Multiple Right Agreement (the “Contract”) between itself and Raoul Njeng Njeng (also known as Skales) for the provision by Skales of exclusive recording services to the Company for a period of 5 (five) years.

Under the terms of the Contract, Skales assigned to the company all copyright and other rights or interests throughout the world in all sound recordings made by Skales prior to or during the term of the Contract. The Contract further provided that the Company shall be entitled to 70% (seventy percent) of the gross receipts received by Skales from performance and tours and brand endorsements during the term of the Contract.

Skales introduced Teresa Osagioduwa Osarenkhoe to the Company as his manager and stated her duties to include inter alia tour bookings, strategy and promotion. In order to avoid a situation where accounts will be disputed, the Company set in place a procedure for the remittance of monies received from performances, tours and brand endorsements involving Skales. The procedure implemented at the beginning of the Contract was the payment of all monies received in pursuance of performances and endorsements into the Baseline account, whereupon the 30% due to Skales would be transferred to his (Skales’) account after the deduction of expenses. The above procedure was implemented at the beginning of the Contract and monies were remitted in the manner stated above. The Company however noticed that rather than remit monies to the Company account as agreed, Teresa Osagioduwa Osarenkhoe falsely dictated to event promoters that monies were to be paid to her personal accounts.

In all the circumstances where monies were paid to Teresa Osagioduwa Osarenkhoe’s personal accounts, these monies were never repaid to the Company.

The Company noticed that although Skales was listed as performing at various concerts, shows, tours and other events, none of the monies received from these events was remitted to the Company. In this regard, the Company invited Skales and his manager Teresa Osagioduwa Osarenkhoe to various meetings seeking an account and a reconciliation. At these meetings, both Skales and his manager Teresa Osagioduwa Osarenkhoe insisted that the events in question were not paid events and as such there were no monies to remit. These dubious activities continued for a period of 12 (twelve) months wherein the Company was fraudulently deprived of its legitimate earnings by the said Teresa Osagioduwa Osarenkhoe as payments made for performances were paid directly into her account in violation of the procedure set up for payments at the beginning of the Contract. The Company in March of 2016 decided to catalogue some of the paid shows, performances, concerts and tours wherein Skales performed and the monies were fraudulently converted for personal use by the said Teresa Osagioduwa Osarenkhoe.

By the Company’s estimation, from the aforementioned events, Teresa Osagioduwa Osarenkhoe has fraudulently converted the sum of N7,474,000 from this brief period without accounting to the Company or making payments first into the Company’s accounts as stipulated in the Contract. This is without factoring all the other performances, tours and shows where no remittance was made from the period January 2015 to April 2016.

In order to properly document this fraud and catch Teresa Osagioduwa Osarenkhoe in the act of theft, the Company created an email address, and sent an email to Teresa Osagioduwa Osarenkhoe requesting the performance of Skales at an event in California on the 2nd June, 2016. In the email communication, Teresa Osagioduwa Osarenkhoe requested the sum of $5,000 (five thousand US dollars) for the performance as well as one business class ticket, one economy class ticket and two hotel rooms in a 4-star hotel. (please find enclosed herewith the email communication between Skales and Femi George with respect to the said performance) On 18th May, 2016 the first tranche of $2,500 (two thousand five hundred US dollars) representing 50% (fifty percent) of the performance fee demanded by Teresa Osagioduwa Osarenkhoe was wired.

The Company in 2015 entered into an agreement with Upfront and Personal, for the engagement of Skales to appear in TV commercials, billboards websites and other social media on behalf of MTN Pulse. As per the terms of the agreement, Upfront and Personal was to pay to the Company the sum of N5,000,000 (five million naira) in two tranches of N2,500,000 (two million five hundred thousand naira each). The said Teresa Osagioduwa Osarenkhoe representing that she was authorized by the Company obtained the sum of N5,000,000 (five million naira) due to the Company without being so authorized. Teresa Osagioduwa Osarenkhoe has failed after repeated demands to repay the said N5,000,000 (five million naira) fraudulently obtained.

Given the above circumstances, the Company believes that a fraud has been committed against it by Teresa Osagioduwa Osarenkhoe. The Company hereby appeals to your good office to investigate this matter in the interest of fairness and justice.

In mid 2014, everything seems good for Skales when he signed a lucrative deal with Baseline Records, a label manages by industry veterans such as Howie T and Dipo Abdul , but right now everything seems not cool for both parties.

The deal came with perks which included a brand new car, a house, cash advance, and upkeep allowance, all summing up to about N200m. Skales was also given the freedom to run his own label OHK Entertainment independently. All of these happened in July, a mere 5 months after his contract expired with EME Records.

“I cannot give you any specific figure because we don’t want other artistes to start running to us”, Howie T said at the time, “However what I can tell you is that the deal is worth hundreds of millions. It includes his new car, new house and total lifestyle package. We are changing his whole lifestyle. We don’t want to create any form of distraction by revealing any figures, but trust me it’s a huge deal, it’s about the biggest deal in the industry at the moment”.

Skales was ecstatic, revealing to NET at that time, his happiness about the deal.

‘It’s great signing with Baseline, I can definitely get to work around a bigger budget and make sure all of my projects are top-notch. OHK will however run independently. I’ve got my team and we all want the same thing – success‘, He said.

Two years after, the relationship gave birth to one album ” Man of the Year ” but situation right now is a way out which is contract termination by Skales which the label says its worst N5 Billion.

The contract read:

“Under the terms of the Contract, Skales assigned to the company all copyright and other rights or interests throughout the world in all sound recordings made by Skales prior to or during the term of the Contract. The Contract further provided that the Company shall be entitled to 70% (seventy percent) of the gross receipts received by Skales from performance and tours and brand endorsements during the term of the Contract.”

The most shocking part of the deal, although not confirmed from official sources, stated that the termination of the deal is worth £10 million. A snapshot of the clause reads:

“The artiste many terminate this Agreement prior to the expiration of the Contract Period by paying the Company the sum of £10,000,000 (ten million pound sterling).”

This has cause an outcry on social media, with many weighing in on the deal. The general cause for concern is the notion that the termination fee is too expensive, and outrageously unreasonable. But what they don’t know is this:

A recording contract might seem like the Holy Grail, but record labels are not charity concerns and their contracts are not set up with your interests in mind. A record label recognized his talent and offered him what seems like the deal of a lifetime. It is left for him to be smart about the affair, take his time to understand what he is signing so his dreams don’t turn into a nightmare. Says Joey Akan of Pulse Nigeria.

I’m so angry at Skales’ foolishness. I’m angry that they’ll cheat him like this!

— T. Rankïn’ (@AfroVII) June 1, 2016

Music is business. There are no Santas. If they force a life of affluence and ease on you from an early stage, run.

— EDWARD Israel-Ayide (@wildeyeq) June 1, 2016

People saying 70/30 is a desperate contract. Lol like the investors have tens of millions to throw around

— Cinderella Man (@Osi_Suave) June 1, 2016

I can’t run a label in Nigeria because the system is flawed. I’d rather invest and give u a time line to pay me back simple.

— Cinderella Man (@Osi_Suave) June 1, 2016

Truth be told o.

If u sign an artiste say like Mayorkun you will spend at least 60m before u start getting profit.

— Cinderella Man (@Osi_Suave) June 1, 2016

Beats me how you don’t booking and accounting for ur label. How ur artiste gets booked and you don’t know.

— Cinderella Man (@Osi_Suave) June 1, 2016