The billionaires’ battle for control of Nigeria’s oldest financial services group, FBN Holdings Plc has intensified between Oba Otudeko and Femi Otedola.
The two business moguls are digging further into the multi-layered intrigues that have gripped the Tier-1 banking group.
Against allegations of attempts to frustrate next week’s annual general meeting of the group, the board of directors on Wednesday reaffirmed all arrangements for the meeting.
The group, however, made two amendments to further clarify its earlier notice.
Under the First Amendment, the group will be seeking the approval of shareholders to specifically raise up to N150 billion in new equity funds by offering new ordinary shares to existing shareholders.
The previous notice only indicated a request for a new capital raise without any specific amount.
In the second amendment, as against the previous resolution seeking the waiver of shareholders’ pre-emptive rights to unsubscribed shares, the board seeks direct approval of shareholders to sell any shares not taken up during the rights issue to “interested shareholders of the company on such terms and conditions as may be determined by the directors”, subject to the approval of regulatory authorities.
The statutory notice filed at the Nigerian Exchange reaffirms the key details of the general meeting, which had sparked major controversies with the opposing camps seeing the general meeting as a major mileage in the battle for the control of the banking group.
The intrigues are mainly around three of the long list of agenda, including the increase in the group’s issued share capital from N17.95 billion to N22.43 billion through the creation of an additional 8.97 billion ordinary shares of 50 kobo each, the new capital raising and the election of directors.
FBNH is seeking shareholders’ approval for the election of Otedola as a non-executive director of the group.
Otedola was appointed by the board as a non-executive director on July 9, 2023, almost the same time that a special purpose vehicle registered in the name of Otudeko’s children announced the acquisition of the single largest individual shareholding of 13.3 per cent in the group.
The ratification of the appointment of Otedola, a statutory requirement, is seen by analysts as a bulwark against alleged attempts by Otudeko to stage a comeback and take control of FBNH.
Otudeko’s long reign as a director and chairman of the group was ended by the Central Bank of Nigeria.
Several shareholders’ groups have openly endorsed the appointment of Otedola.
Also, the Executive Director of Finance, FBN Holdings, Samson Oyewale Ariyibi, who was appointed by the board and approved by the CBN in 2022 would be presented for shareholders’ approval.
There is no major opposition to Ariyibi’s appointment, according to sources.
The adoption of virtual mode for the general meeting had come under intense criticism by groups with alleged links to Otudeko, with allegations that the board of the group settled for the virtual mode to be able to control the proceedings in favour of the resolutions.
Several other groups with an open endorsement of the board’s decisions had countered that the virtual mode is a trending mode among quoted companies, in compliance with the Business Facilitation (Miscellaneous Provisions) Act.
FBN Holdings had confirmed that Barbican Capital, an affiliate of Otudeko’s Honeywell Group Limited, acquired about 4.77 billion ordinary shares in the holding group, representing 13.3 per cent of the group’s 35.9 billion issued shares.
However, Rule 4.1 of the Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria stipulates that where shares amounting to five per cent of a holding company are acquired through the secondary market, such holding company shall apply for approval from the CBN within seven days of the acquisition.
Barbican Capital, incorporated in March 2023, has Otudeko’s children – Oyeleye Foluke and Otudeko Adedamola– as main owners.
CBN’s rules on “lifting of the veil of beneficial owners,” however, allow the apex bank to trace the sources of funding for the acquisition in determining the beneficial owner of the deal.
Extant capital market rules also require formal disclosure and review of material shareholding of five per cent and above by the regulatory authorities.
The CBN has not made any statement on its decision regarding the Otudeko acquisition.
Attorneys to Ecobank Nigeria have written many petitions, alleging that the Barbican Capital’s FBNH’s acquisition was an attempt to frustrate a Supreme Court judgment against Otudeko, in favour of the bank.
Sources close to Otudeko have consistently denied this.
A coalition of minority retail shareholders of FBN Holdings earlier this week called on regulatory authorities to take a cursory look into alleged attempts by certain individuals to undermine the oldest financial services group in the country.
Shareholders who staged a solidarity protest at the Marina, Lagos head office of FBN Holdings said several petitions have been submitted to the regulatory bodies concerning clandestine plots to frustrate the board and management of the group and make the first-tier bank vulnerable.
According to shareholders, there was ample evidence before the CBN, Securities and Exchange Commission and other regulatory bodies to take action and look into the crisis.
They alleged that there were moves to frustrate the forthcoming annual general meeting of the group, scheduled for next week, and the plan to expand the capital base of the banking group.
The inability of FBN Holdings to hold AGM will expose the group to several defaults and sanctions for breach of corporate governance practices and extant rules at the capital market.
The group, unlike other competitors that is taking proactive measures to beef up its capital base, will also not be able to increase its capital, the key measurement of a financial services group.
At the forthcoming AGM, besides the ordinary businesses of consideration and approval of annual financial accounts and reports, dividend payment and audit committee among others, FBN Holdings also plans to seek shareholders’ approval to increase its share capital, raise new equity funds and appoint new directors.
