A raging fight has ensued at First Bank of Nigeria over who owns the largest share. The case has moved from the boardroom to the courtroom, with lawyers preparing papers and evidence to defend their clients before the judge.
While the case rages, here are 10 things you should know about the ongoing fight at the First Bank.
One, the tussle is between the current Chairman of First Bank, Mr Femi Otedola, and Oba Otudeko, who owns Barbican Capital, which is affiliated to Honeywell, an Apapa, Lagos-based flour miller. Oba Otudeko is the founder and chairman of Honeywell Group.
Two, the contention is about who owns the largest share in First Bank. Barbican Capital, owned by Otudeko, claims that it is the largest shareholder with 15.01 percent stake in the bank, while alleging that Otedola owns only a 9.41 percent share. Barbican Capital claims that its 5.38 billion units of shares in the bank have been altered by Nigeria’s oldest bank. First Bank, however, disagrees, arguing that Barbican cannot provide evidence of some of the shares it claims to own.
First Bank further argues that Barbican is concealing the fact of an ongoing verification exercise by the Central Bank of Nigeria (CBN) of its alleged significant shareholdings. It noted that only 3.110 billion shares (representing 8.67 percent of Barbican’s total shares) of Barbican Capital’s total shares could be verified by the CBN, while its alleged 2.34 billion shares (representing 6.52 percent) could not be verified.
Three, the matter has been instituted at the Federal High Court, Lagos, for hearing. The parties have gone to court once. The matter was adjourned to October 2, 2024 for hearing of the substantive suit.
Fourth, the CBN appears to be backing Otedola-led First Bank. A report on Tuesday seen in BusinessDay and ThisDay said: “The Central Bank of Nigeria (CBN), and FBN Holdings Plc have asked a Federal High Court sitting in Lagos to dismiss a suit filed by an investment firm, Barbican Capital Ltd, over the alleged alteration of its alleged 5,386,397,202 units of shares in the bank.” This implies that the apex bank is tilting towards the current ownership of First Bank.
Fifth, First Bank claims that Barbican Capital has not challenged the outcome of the verification exercise carried out by the CBN as the supervisory and regulatory body regarding share ownership. But Barbican claims it has attached a statement by the Central Securities Clearing System Plc (CSCS), which is a computerised depository, clearing, settlement, and delivery system for transactions in securities. Barbican claims CSCS’s statement showed that as at May 23, 2024, its shareholding stood at 5.386 billion shares.
Also, Barbican argues in its court papers that First Bank paid dividends for all of its 5.386 billion shares between November and December 2023 for the full year 2022, which validates its ownership of the shares.
Sixth, whoever wins the case between Otedola and Otudeko (Barbican Capital) emerges as chairman of First Bank.
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Seventh, Barbican claims that First Bank has written to the registrars, Meristem Registrars & Probate Services Ltd, who pay dividends to shareholders, to freeze its dividend payments on the disputed shares.
Eighth, First Bank claims that the Central Bank of Nigeria Guidelines for Licensing and Regulation of Financial Holding Companies (FHC) in Nigeria (issued pursuant to the Central Bank Act of 2007 and Banking and Other Financial Institutions Act 2004) requires prior approval to be sought from CBN before the purchase of a FHC’s shareholding of five percent and above, or, in the event that the share units are purchased on the secondary market, to notify the CBN within seven days from the date of the purchase to obtain a “no objection” or approval from the CBN.
First Bank claims it wrote a letter dated 10th of July 2023, notifying the CBN of Barbican Capital’s new shareholding exceeding the minimum threshold of five percent and therein sought the CBN’s approval.
First Bank said the CBN requested Barbican Capital to produce documents for the verification process of the shareholding, claiming that Otudeko-owned company “failed, refused and neglected to provide all the requested documents.”
Ninth, Oba Otudeko was First Bank chairman until April 30, 2021, when he was removed by former Governor Godwin Emefiele, alongside the bank’s directors.
Tenth, except there is an intervention for an out-of-court settlement, the case looks likely to last for a while in court.
