Top Stories
Breaking:FBNH majority shareholders to “join forces” against Otudeko in battle for soul of the bank
Some of the majority shareholders of FBN Holdings Plc are said to be joining forces to fight off Oba Otudeko from reclaiming control of the bank holding company.
Reports reaching Nairametrics suggest the decision to join forces against Oba Otudeko is in response to the declaration of a 13.3% stake in the bank.
The shareholders are reported to be concerned about the consequences of having Oba Otedeko back in control of the bank in any capacity, following the debacle he had with the central bank two years ago.
Nairametrics first reported the over four billion share transfer on Thursday and also first broke the news that the acquirer was Barbican Capital, a company owned by Children of Oba Otudeko.
Oba Otudeko troubles: Recall, in April 2021, the central bank removed Oba Otudeko as chairman and sacked the board of the bank.
- The apex bank explained the reason was mainly due to the apex bank’s regulatory forbearance and support in the corporate restructuring of the bank to protect it from failing.
- The CBN claimed that because it had played a major intervention role that avoided a collapse of the bank due to bad loans and poor capital adequacy ratios, it had a major stake in how the bank is run.
- The decision to fire the board, led by Otudeko was triggered because the current MD/CEO Sola Adedutan was removed despite having steered the bank into profitability after years of mismanagement.
- The CBN reinstated him as MD/CEO and then proceeded to sack the board.
Otudeko’s forced exit from the bank paved the way for other shareholders such as Otedola and Odukale to cement their stake in the bank with all major shareholders appointing directors on the board of the bank and the holding company.
- The billionaire owner of Globacom, Mike Adenuga, and the family of Arisekola are also major shareholders of the bank all with board representation.
- Nairametrics understands that the major shareholders of the bank jointly own about 28% of the shares of the bank as of December 2023.
- Some of the holdings include shares owned by proxies, a familiar shareholding pattern in the bank.
We also understand more shares have been acquired by some of the shareholders in recent weeks culminating in the share price doubling in just about one month.
Shareholders join forces: One source indicates a meeting was held earlier on Friday by some of the shareholders to decide on how to take on Oba Otudeko, as they fear his return “might damage the progress” made by the bank over the last two years.
- The shareholders also believe they have enough votes in the bag to stall any possible return of Otudeko despite his declaration of a 13.3% stake in the bank.
- They are also thought to be exploring other possible regulatory breaches around the failed declaration of the holdings by Otudeko as required by NGX and SEC regulations.
- Shareholders who own more than 5% of quoted companies are deemed significant shareholders and are expected to declare the holdings in public.
- Before now, only Otedola had declared about 5%.
CBN angle: The central bank is also understood to be watching proceedings and will likely make a statement soon as things unfold.
- It is however unclear if they will be aggressive as they were under Emefiele’s leadership which was known to be strongly against the bank returning to Otudeko.
Emefiele has accused insiders of taking loans and exerting control over the directors o the bank, thus breaching prudential guidelines.
- “The insiders who took loans in the bank, with controlling influence on the board of directors, failed to adhere to the terms for the restructuring of their credit facilities which contributed to the poor financial state of the bank. The CBN’s recent target examination as at December 31, 2020, revealed that insider loans were materially non-compliant with restructure terms (e.g. non perfection of lien on shares/collateral arrangements) for over 3 years despite several regulatory reminders. The bank has not also divested its non-permissible holdings in non-financial entities in line with regulatory directives.”
Other Considerations: Another source however suggested that Otudeko may be in a better position than he was two years ago as the Honeywell deal with Flourmills has helped him repay most of the loans putting him in a financial position to fight back.
- However, he still faces an uphill battle against Ecobank who has a case with him at the Supreme Court on disputes over an unpaid debt.
- Nairametrics also expects the intervention of regulators in the coming days and weeks.
- This is an evolving story that is pitting some of the powerful shareholders in Nigeria.
Credit:Nairametrics.
- Top Stories20 hours ago
Breaking: Tension as NLC appoints interim Labour Party chairman
- Top Stories20 hours ago
BREAKING: Tinubu Govt Approves Downward Review Of Electricity Tarriff For Band A Consumers
- News16 hours ago
#ATAF 2024: Adedeji tasks African tax administrators on local solutions
- Business and Brands23 hours ago
ZENITH BANK SHOWS CONTINUED MARKET LEADERSHIP WITH 189% GROWTH IN Q1 EARNINGS
- Entertainment24 hours ago
Samklef reveals why he didn’t propose to Simi despite his Admiration
- Business and Brands21 hours ago
Union Bank Achieves Another Milestone; Attains MSECB ISO 27001:2022, 20000-1:2018 and 22301 Certifications
- Top Stories24 hours ago
#US2024: Six Months From Election Day, What You Need To Know As America Waits
- Sports24 hours ago
2024 NFL Draft: Fantasy football fits we love — and some we’re questioning