The recent acquisition of FBN Holding shares by Oba Otudeko, the former bank chairman, has ignited a fierce power struggle among major shareholders of FBN Holdings, Nigeria’s oldest bank.
The shares, which Otudeko bought at N19 per unit, are the largest volume of First Bank shares traded in a single day since 2012, when the stock exchange started publishing data.
The acquisitions raised his shareholding to 14 per cent of the bank’s outstanding market value.
Adding to the complexity of the situation, Ecobank Nigeria Limited has demanded the rejection of the acquisition.
Ecobank Nigeria Limited has asked First Bank Nigeria (FBN) Holdings to reject the shares acquisition by Oba Otudeko, its former chairman, over an alleged N13.5 billion debt.
In a letter addressed to FBN Holdings, dated July 7, 2023, Kunle Ogunba, lawyer of Ecobank, accused Otudeko of “diverting his assets and that of the Honeywell Group of companies through the said Barbican Capital Limited, in order to frustrate the enforcement of the judgment of the supreme court against him and the Honeywell companies, towards recovering his/their undisputed indebtedness to our client”
In the letter, it was revealed that the debt is split among Otudeko’s companies; Honeywell Group Limited, Siloam Global Services Limited and Anchorage Leisures Limited, as well as Honeywell Flour Mills PLC, which has been sold to Flour Mills.
The Receiver Manager disclosed that the Supreme Court, on January 27, 2023, ruled in favour of Ecobank, validating the lender’s claim of Otudeko and his companies owing the financial institution.
Meanwhile, Otudeko has denied being indebted to Ecobank and has appealed the court’s decision, however, the debt ruling still holds.
This demand raises concerns about the financial obligations and potential liabilities associated with the acquisition, further intensifying the power struggle.
The power struggle and litigations surrounding the acquisition underscore the magnitude of the situation and the differing interests among the major shareholders.
The CBN has the authority, under its rules on “lifting the veil of beneficial owners,” to trace the sources of funding for the acquisition.