Business
Corporate titans battle for control of First Bank of Nigeria
By AYOOLA OLAOLUWA
An ownership and legal drama of epic proportion is currently unfolding in the high-stakes arena of Nigeria’s corporate banking, as business titans fight for the control of the oldest financial institution in the country, First Bank of Nigeria (FBN) Plc.
The protagonists of this latest saga are none other than Nigeria’s wealthiest and most powerful men and institutions: Oba Otudeko; Femi Otedola; Globacom Chairman, Chief Mike Adenuga; Tunde Hassan Odukale; Saheed Arisekola, the scion of the late Ibadan businessman, Alhaji Abdulazeez Arisekola-Alao; Honeywell Group and Ecobank Bank Plc, among others.
The renewed battle for the control of First Bank had blown into the open on Thursday, July 7, 2023, when Otudeko, a former chairman of the bank, announced that his Honeywell Group had purchased 4,770,269,843 shares of the bank at N19 per unit in a cross deal worth N87.8 billion.
“We write on behalf of Barbican Capital Limited, an affiliate of Honeywell Group Limited and refer to the provisions of Sections 119 and 120 of the Companies and Allied Matters Act 2020 (as amended).
“In addition to the previously disclosed interests by Honeywell Group Limited’s affiliates, kindly take this as notification that, as at 7th July 2023, Barbican Capital Limited has acquired an aggregate of 4,770,269,843 shares in FBN Holdings Plc.
“Kindly accept the assurances of our highest regards. Yours faithfully, Yewande Giwa Head, Governance & Sustainability”, Honeywell Group Limited, had stated in a disclosure of shareholding sent to the Company Secretary of FBN Holdings Plc. dated July 7, 2023.
The successful completion of the shares purchase deal, the largest volume of First Bank shares ever traded in a single day since 2012 when the stock exchange started publishing data, pushed Otudeko’s shareholding to 14 percent, effectively making the Ijebu-born billionaire the bank’s single largest shareholder.
By the time the dust raised by the announcement of the shares purchase settled, Otudeko had ended Femi Otedola’s short reign as the bank’s largest single shareholder.
If the share-purchase is ratified by the Securities and Exchange Commission (SEC), and CBN, the Epe-Lagos born billionaire will now be the second highest shareholder with 9% shareholding, Hassan Odukale and Mike Adenuga are third joint owners with 7% shareholding each, while the Estate of late Arisekola is the fourth largest equity owner with 5% equity.
With his new status, Otudeko is expected to install his representatives on the FBN board, and subsequently take over the management of the bank.
Otudeko, it would be recalled, had lost control of the bank in 2021 when the suspended Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, sacked him and the First Bank board for alleged breach of corporate governance laws.
Otudeko’s sudden and unexpected exit led to an intense scramble for the control of the bank among stakeholders, with maverick businessman, Femi Otedola, emerging as the new largest majority shareholder after defeating Hassan Odukale in a hotly contested battle for control of the bank.
However, Otedola’s reign as FBN’s most influential shareholder did not last with last week’s re-entry of Otudeko into the foray as the new largest shareholder.
Business Hallmark learnt at the weekend that Otudeko emerged winner after an intense and deft underground moves and scheming by stakeholders vying to take over the bank.
Impeccable sources in the industry confided in BH that Otudeko never left First Bank in the first instance. According to them, what he did was to hand over his interests in the bank to proxies, who held the shares in trust for him until when he’s ready to take them back.
“To tell you the truth, Otudeko never left First First. In fact, he had his tentacles entrenched in the bank and is in control of more shares than he is given credit for.
“With the N82 billion he got from the sale of Honeywell Flour Mills, he is buying back the FBN’s shares through individuals and entities linked to him.
“It will shock you to know that the real owners of most shares in Nigerian businesses are faceless but well known Nigerians.
“Years of studies have shown that less than 10% of minority shares are owned by ordinary Nigerians, while the remaining minority shareholding of 0.1% to to 1% are held by proxies for big stakeholders who prefer to hide their identities for obvious reasons.
“Those of us in the regulatory agencies know that the majority of these small shareholdings are held in trust by families and close associates, even domestic helps of major shareholders, who try to shield their hands and moves.
“Between the five biggest shareholders of First Bank, they own up to 50% of the bank’s shares, but they pretend otherwise.
“Where do you think Otudeko fouqnd the shareholders that sold him their 14% stakes from? Are they from the moon?
“He waited until the toxic environment at the bank had evaporated to make this latest comeback”, a source in one of the regulating agencies disclosed.
BH also gathered that all the major shareholders, especially Otedola, Odukale, Adenuga and Arisekola had been silently mopping up shares and waiting patiently until they can secure enough to attempt a takeover of the bank.
The Chairman of Globacom, Chief Mike Adenuga, it was gathered, sided with the anti-Otudeko’s camp during the bank’s 2020 to 2021 crisis that culminated in exit of the Honeywell Group’s chairman.
“Adenuga had hoped to take over the control of the bank after Otudeko’s exit, but his ambition was upended by Otedola’s unexpected foray into the contest.
“By the time he realised it, he had been blindsided by Otedola’s moving train.
“In spite of the setback, he (Adenuga) is patiently bidding his time to make another major move.
“Though I can’t confirm this, there are insinuations in the industry that Otudeko was able to stage a comeback through Otedola’s help.
“We learnt that Otedola never had the plan to be actively involved in banking business but was dragged into the tussle by Otudeko to prevent his two biggest competitors, Odukale and Adenuga from taking over the bank.
“Boardroom politics is like the deep blue sea, where sharks devour their fellow sharks as meals. You never know what is coming to you until it is almost too late”, another source, who craved anonymity, disclosed.
However, several informed sources closed to the Globacom chairman told our correspondent that Adenuga’s 2021 move against Otudeko was borne out of vendetta.
According to them, Adenuga and Otudeko used to be close friend before their relationship became sour over alleged betrayal by Otudeko.
“Otudeko was Adenuga’s financial adviser during his days at Cooperative Bank, Ibadan where he rose to become the general manager and later chief executive officer.
“It was Otudeko, who helped Adenuga gain a foothold in First Bank. When Arisekola had debt issues with the bank, he approached Adenuga to buy off some of his shares in the bank to settle the huge debts, hoping to buy it back later from him.
“As his financial adviser then, Adenuga had handed over the transaction to Otudeko to sort out. Unfortunately for him (Adenuga), Otudeko was also interested in taking over First Bank.
“Rather than help Adenuga in his quest to buy over Arisekola’s shares and become the bank’s largest shareholder, Otudeko purchased the shares for himself.
“That singular act enabled him to subsequently take over control of FBN. But Adenuga, as well as the late Arisekola did not forget the treacherous act. So, it didn’t come as a surprise to some of us when Adenuga teamed up with Emefiele to chase him (Otedola) out of First Bank.
“Adenuga and Arisekola’s Estate ensured that one of their own, Remi Babalola (former Minister of Finance and MD of Wema Bank), was installed by the CBN as the chairman of FBN Holdings to replace Otudeko’s ally, Dr. Ibukun Awosika.
“Adenuga is also not a saint as he never had the intention of handing over the shares to Arisekola as agreed”, the source disclosed.
While, the battle for the control of FBN is still raging, another twist was added to the drama when Ecobank Plc. challenged the validity of the share purchase by Otudeko and Honeywell Group.
Ecobank is also seeking to abort the transaction. In a letter to the board and management of First Bank Holdings (FBH), Ecobank called on them not to accept the acquisition of 4.7 billion shares by Otudeko.
In the letter written by its Legal Counsel, Kunle Ogunba & Associates obtained by BH, Ecobank stated that Otudeko, through his affiliated entities, is owing it N13.5billion.
“Whereas, the prior-mentioned entities had initially disputed their indebtedness to our client and had consequently filed an action in court to that effect, the Supreme Court on the 27th day of January, 2023 in Appeal No. SC/CV/210/2021 delivered Judgment (Certified true copy of which is herein attached) affirming the indebtedness of the above persons to our client and further commanded that they must pay all the outstanding debts that have accrued under the loan contract between the parties; the same debt personally guaranteed by Dr. Oba Otudeko, which said indebted stood in the sum of N13,507,052,417.99”, the letter, dated July 7 and signed by the Principal Partner of the law firm, Oludare Amusan, explained.
Ecobank also alleged that instead of taking urgent steps to repay his debts in line with the mandate of the Supreme Court, Otudeko, who had personally guaranteed to pay the debts, had resorted to steps to divert his assets/funds using Barbican Capital Limited as a special purpose vehicle.
Ecobank concluded that the actions taken by Otudeko were targeted at diverting his assets and that of the Honeywell Group in order to frustrate the enforcement of the judgment of the Supreme Court against him and affected Honeywell companies, towards recovering his/their indebtedness to Ecobank.
However, Otudeko is standing his ground by countering Ecobank’s claims, arguing that the bank’s allegations against him are incorrect.
Otudeko, through his legal representatives, Wole Olanipekun & Co, advised FBN Holdings to disregard Ecobank’s petition, insisting that there is no judgment of the Supreme Court that he was owing the bank the sum of N13.5billion.
“The sum of N13,507,052,417.99 stated in Ecobank’s letter is/was not contained in the Supreme Court decision or any extant Court decision in Nigeria or elsewhere”, the letter read.
Meanwhile, reactions have continued to trail the move by Ecobank to scuttle the purchase of FBN by Otudeko.
The National Coordinator of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, said that legally, nothing stops Otudeko from investing in any company he has interest in.
“Otudeko invested his money where he wanted to invest it. Nobody can dictate to him where or how to invest his money”, Okezie argued.
He also blamed Ecobank for failing to initiate proceedings to take over Honeywell Flour under receivership stipulations, instead of making a failed bid to block the sale of the company to the Nigerian Flour Mills
In his own response, the immediate past chairman of Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, maintained that Ecobank is wrong in trying to stop Otudeko from acquiring FBN shares, arguing that the capital market is a free market where an investor can enter and exit at will.
He, however, advised all parties to go for arbitration in order to permanently resolve the feud
