Outraged shareholders of First Bank, Nigeria’s oldest financial institution are seeking to stop the shocking bid by Femi Otedola, chairman of the holding company of the bank to embark on a private placement at a time the highly successful rights issue conducted by the bank has yet to be concluded and shareholders allotted their shares.
Many of the angry shareholders believe the private placement
is a ploy by Otedola and some others unnamed to undertake a takeover of the
bank through the back door. The aggrieved shareholders insist that any capital
raise should be done by way of rights issue to give all existing shareholders
fair and equitable chance to participate.
One shareholder with significant holding told a friend Thursday morning he had just paid for the initial rights issue and was yet to be allotted his shares. He complained that he was not made aware of the plans to undertake a private placement.
Another major worry of the shareholders is that they accuse
Otedola of running the bank as his private estate without consultation. “The
bank does not belong to Otedola, and it should be managed in the overall
interest of the shareholders and not according to the whims of an individual,”
one of the parties said.
Among the shareholders who are fuming are some with
significant shareholding of more than 17%. They have written to the board of
the bank demanding that an emergency general meeting, EGM be held in 21 days.
In their demand, they stipulated four items that should be on
the agenda of an EGM. The four items are to stop the controversial private
placement, vote for the removal of Femi Otedola, the bank’s chairman and Julius
B. Omodayo-Owotuga as directors of the bank. Omodayo-Owotuga is Managing
Director at one of Otedola’s companies and was nominated to the board by
Otedola. The shareholders also want the EGM to elect Olufemi Otudeko and Saheed
Alao to the board. The call for the EGM is provided for under section 215 (1)
of CAMA.
The shareholders alleged that since disgraced former Central
Bank of Nigeria (CBN) Governor, Godwin Emefiele, influenced Otedola’s
acquisition of significant amount of shares that led to his emergence as
Chairman of FBN Holdings, the financial institution has remained unsettled.
And they revealed that while in office, Emefelie had called
the former Chief Executive Officer of FirstBank, Dr. Adesola Adeduntan, to his
house in Ikoyi and instructed him to work with Otedola to help him take over
the bank. He dutifully obliged and subsequently paved the way for Otedola to
become a non-Executive director in the first instance, and this without
security clearance from the Department of State Security, DSS and the Economic
and Financial Crimes Commission, EFCC as was required.
After he had successfully taken control of the bank, Otedola
orchestrated the removal of Adeduntan himself, and then followed by Tunde
Hassan-Odukale, who was the Chairman of First Bank of Nigeria Limited, and he
then subsequently moved against Tosin Adewuyi, whom he side-stepped for the
position of CEO despite coming first in the interview conducted by a global
recruitment agency, it was reported.
It would appear that Otedola’s calculations to complete the
take over of the bank during the rights issue failed. This is largely because
in December 2024, the CBN concluded the share verification of all the holding
of Barbican Capital, the single largest shareholderer of the bank and which is
linked to Oba Otudeko. As a result of the completion of the shareholding
verification by the CBN, Barbican Capital the single largest shareholder was
then able to take up all the rights due it during the capital raise, it was
learnt.
The surreptitious move for a private placement is seen as the
last resort. Thus, with the private placement of N360 billion, other
shareholders now fear that it will give Otedola absolute control and could turn
First Bank to a piggy bank without checks, balances and corporate governance.
But for Emefiele, who handed him the bank, the other
shareholders contended that, Otedola could not have emerged a director of the
bank.
Quuestions have been asked as to how a non-Executive Chairman
of a HoldCo will sack a group head of a bank, who simply obeyed the
instructions of the Managing Director and the Board of the Bank.
FBN Holdings has been a subject of battles over who holds the
single largest share of the institution. First Bank Holdings, in its audited
accounts for 2023, had put Otedola as the single largest shareholder with a
9.41 per cent stake in the financial institution.
But data from the Central Securities Clearing System (CSCS),
the widely accepted source for confirming share ownership, has Barbican
Capital, which is affiliated with the Oba Otudeko-owned Honeywell Group, as the
largest single shareholder with a 15.01 per cent stake. Records kept by the
bank’s registrars, Meristem Registrars & Probate Services Ltd, also showed
that Barbican Capital is the single largest shareholder with 5,386,397,202
shares (5.38 billion) shares as of May 23, 2024.
Barbican Capital had sued FBN Holdings for wrongly stating its
shareholding in its audited financial statement but it withdrew this case to
allow the CBN carry out its verification of shares. This has now been concluded
and the apex bank has written to First Bank confirming the shareholding
position of Barbican Capital but BusinessDay learnt from First Bank officials
that when Otedola learnt of this, he caused First Bank to ask the Central Bank
for the basis for confirming the shareholding position of Barbican Capital.
It is not clear if the aggrieved sahreholders have
communicated their concerns to the Security and Exchange Commission, SEC and
the Central Bank of Nigeria, CBN and what they will do to stop the planned
private placement. (BusinessDay)
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