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Major shareholders of FBN Holdings the parent company of First Bank of Nigeria are said to be against the move by a former Chairman of the bank Oba Otudeko to gain proxy control over the bank through his daughter.
Barbican Capital , an affiliate of Honeywell Group, disclosed on Friday that they have purchased an aggregate of 4,770,269,843 shares in FBN Holdings Plc putting its stake at 13.3%.
Barbican Capital Limited however was only incorporated on the 9th of March 2023, with Corporate Affairs Commission RC 6900918, according to a search of public CAC records undertaken by MoneyCentral.
Persons with significant control include: Oyeleye Foluke and Otudeko Obafemi. Foluke is understood to be the daughter of Oba Otudeko.
Major shareholders of the bank are said to be concerned that Otudeko is trying to regain control of the bank, after his ouster as Chairman of the bank by former Central Bank Governor Godwin Emefiele.
FBN Holdings’ board under Otudeko had moved against Adeduntan before they were sacked by the CBN. They had initially appointed him but later sacked him – a move that saw CBN criticise the company publicly.
Following their sack, CBN reappointed Adeduntan, others, to lead the affairs of FBN Holdings and banking subsidiary, First Bank, to end the financial crisis CBN claimed led to its decision to remove the board.
The CBN in a letter to the former Chairman of the Bank dated April 26th, 2021, said the bank had not complied with regulatory directives to divest its interest in HoneyWell Flour Mills despite several reminders.
The CBN Governor Emefiele said he spoke with Oba Otudeko, a major shareholder controlling about 10 percent of First Bank, not to interfere with the running of the bank by engineering the removal of its CEO Sola Adeduntan, which was rebuffed by Otudeko.
Otudeko also refused to pick the calls of 2 other major shareholders of the Bank, according to Emefiele.
“We will not allow a shareholder who feels that he cannot subject himself to regulatory control and authority to remain as a Director of the bank. We didn’t have any choice but to take this decision,” Emefiele said.
The bank had also not perfected its lien on the shares of Oba Otudeko in FBN Holdco which collaterised the restructured credit facilities for HoneyWell Flour Mills contrary to conditions precedent for the restructuring of the company’s credit facility.
Insider related loans in First Bank have been problematic in recent years, according to the Central Bank of Nigeria (CBN).
The insiders of First Bank of Nigeria who took loans in the bank with controlling interest on the board of Directors, failed to adhere to the terms of restructuring of their credit facilities, which contributed to the poor financial state of the bank, Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), said in a press briefing in April following the sacking of the board of the bank.
“The CBNs recent target examination as at December 31st 2020 revealed that insider loans were materially non-compliant with terms of restructure of the loans,” Emefiele said.
“For example non perfection on liens on shares and collateral arrangements that CBN had insisted on for over 3 years, despite several regulatory reminders.”
With Emefiele now gone there are fears about where the 4.7 billion shares said to be acquired by Barbican Capital materialised from.
There are also questions around if the lien on the shares of Oba Otudeko in FBN Holdco, was ever perfected as directed by the CBN.
Billionaire investor, Femi Otedola (Calvados Global Services Limited), controls 5.57% of FBN Holdings, while Tunde Hassan-Odukale controls 4.42%.
The new board of First Bank backed by some majority shareholders; Femi Otedola, Oye Hassan Odukale, Mike Adenuga, and the family of Late Azeez Arisekola Alao has worked tirelessly to restructure and reposition the FBN Group in the last two years.
Under Otudeko, the capital market’s confidence in FBN Holdings slumped significantly, with the firm’s share depreciating by 61.06% between 2013, a year after he was appointed FBN Holdings board chairman, to 2021, when he exited.
This wiped off N405.97 billion in the market valuation of the company, leading to significant loss in shareholders’ investments, as FBN Holdings market capitalisation fell to N258.80 billion, from N664.78 billion.
However, following Otudeko’s exit, the value of shareholders investments rose by 154.50%, raising the company’s valuation to N728.67 billion, as of Friday July 7 , from N258.80 billion, indicating the capital market renewed their interests after Otudeko left FBN Holdings.
FBN Holdings also closed at a new 52 week high of N20.30 on Friday.
In order to protect the growth under Nnamdi Okonkwo, the FBN Holdings GMD/CEO and Adeduntan, the majority shareholders, all of whom have a combined stake of over 27%, are considering regulatory rule to stop Otudeko’s takeover.
Also, the regulatory bodies, CBN, Nigerian Exchange Limited, and Securities and Exchange Commission are monitoring the takeover attempt of Otudeko.