Sacked from FBN Holdings’ board in 2021, Oba Otudeko plots return

Oba Otudeko, a former chairman of the directors’ board of FBN Holdings, is seeking to return to the top hierarchy of the lender, PREMIUM TIMES can report.

Mr Otudeko was ousted in 2022 following a shake-up at the financial institution by the Central Bank of Nigeria that indicted the industrialist for breach of corporate governance.

In a letter dated 7 January obtained by PREMIUM TIMES, Mr Otudeko (representing Barbican Capital Limited) and Saheed Alao (representing Industrial Mercantile and Investment Company Limited) wrote the top-tier lender, demanding removal of Femi Otedola, the chairman of FBN Holdings, and Julius Omodayo Owotuga, a non-executive director of the group, as directors of the holding company.

According to the letter, Industrial Mercantile and Investment Company Limited holds 842.2 million shares in FBN Holdings.

Messrs Otudeko and Alao also requested that they both be appointed as directors of FBN Holdings, subject to the approval of Central Bank of Nigeria, replacing the removed directors.

“Obafemi Otudeko is one of the directors sacked by the CBN in 2022. Therefore, it will be an abrasion, monumental error and a moral hazard to reappoint him on the board of the Holdco or boards of its subsidiaries,” one shareholder said.

“If it is done, the other members sacked with him may sue the CBN,” he added.

The ex-FBN Holdings’ chairman holds an 8.7 per cent stake in the financial services group through Barbican Capital, and is second only to Mr Otedola in the ranking of top owners of the company.

Both men have at various times in the past attempted to outdo the other in the contention for the top ownership of the holding company, which is the parent of Nigeria’s oldest lender First Bank.

Mr Otedola currently holds a 13.6 per cent interest, translating into 5.4 billion shares, in the corporation. His latest share acquisition is the 534.1 million units he purchased last September.

According to Mr Otudeko’s letter, Industrial Mercantile and Investment Company Limited holds 842.2 million shares in FBN Holdings.

Barbican Capital and Industrial Mercantile and Investment Company Limited also requested in the letter addressed to Adewale Arogundade, FBN Holdings company secretary, that an extraordinary general meeting of the corporation be convened not later than the statutory 21 days from the day of the company’s receipt of the requisition.

The meeting will deliberate “that the capital raise in the aggregate sum of N350,000,000,000.00 (three hundred and fifty billion Naira) or any part thereof being undertaken by the company be and is hereby authorized to be implemented by the issuance of shares by way of rights issue only.”

The two shareholders stated that the foregoing resolution “hereby amends and shall supersede the resolution passed at the 12th Annual General Meeting held on 14th November 2024 regarding the raising of additional capital for the company.”

FBN Holdings, on 18 October 2024, issued a notice of its 12th annual general meeting (AGM) scheduled to hold on 14 November 2024.

Among other resolutions, the group sought authorisation to undertake a capital raise of N350 billion, being part of the plan to meet a new minimum capital requirement of N500 billion from the Central Bank of Nigeria.

“The capital raise transaction shall be implemented by one or more transactions, through the issuance of shares by way of a public offering, private placement, rights issue in the Nigerian or international capital markets, at price(s) to be determined by way of a book building process or any other valuation method or combination of methods,” the AGM notice said.

The capital raise proposal was approved by shareholders at the meeting, which held in November.

FBN Holdings launched a rights issue on 4 November 2024, seeking to raise N150 billion from existing shareholders through a share sale on the basis of one new ordinary share for every six shares held by the shareholders as of 18 October 2024. The duration of offer was later extended to 30 December 2024.

According to the offer prospectus, investors are to receive their allotment by 27 January following approval from the Securities and Exchange Commission, while the new shares are to be listed a week later.

In a separate letter dated 8 January and signed by Oba Otudeko and addressed to FBN Holdings’ company secretary, Barbican Capital raised concerns about the decision of the lender’s directors board to raise additional capital for the company through private placement.

READ ALSO: FBN Holdings Plc rights issue: The takeaways 

“The validity of the 12th Annual General Meeting (’AGM’) of the company purportedly held on 14th November, 2024, and the resolutions reached at the AGM are contestable by Barbican Capital Limited (Barbican) owing to the fact that the AGM was held in clear violation of Barbican’s membership rights (that are protected by law). All rights of Barbican are reserved. To this extent therefore, the validity of the ‘ordinary resolution’ empowering the board to raise additional capital by private placement is in question,” the letter stated.

“The decision of the board to opt for a private placement rather than another rights issue is fundamentally flawed as a commercial decision and legally unsupportable by existing statutes (i.e) the Companies and Allied Matters Act 2020 (CAMA) and the Securities and Exchange Rules 2013 (SEC Rules),” it added.

Barbican argued that the board’s decision to explore private placement is rushed considering that the deadline for meeting the new recapitalisation rule is 2026, implying that there is still ample time to raise the capital.

Mr Otudeko is currently locked in a litigation with a former employee of First Bank of Nigeria Limited, Adesuwa Ezenwa, who accused the billionaire industrialist of massive fraud during his time as chairman of FBN Holdings Plc, the parent company of the bank.

Bisi Onasanya, the bank’s managing director/chief executive officer at the time, was also named in the allegations contained in court papers.

Mrs Ezenwa, who the bank summarily dismissed in October 2016, initiated legal action against First Bank at the National Industrial Court of Nigeria, Lagos Judicial Division, seeking redress for the termination of her appointment, which she said was done “without any reason whatsoever being offered.”

The former First Bank staffer is, among other reliefs, demanding five hundred million naira in damages and twenty-five million naira in legal costs.

In court documents obtained by PREMIUM TIMES, Mrs Ezenwa alleged that the bank’s credit disciplinary committee made her bear the brunt of granting unsecured loan facilities worth billions of naira to companies in which Mr Otudeko and Mr Onasanya had substantial investments, while her superiors who approved and granted the credit were not so penalised.