Outraged First Bank shareholders seek to stop ‘strange’ N350bn private placement

Outraged shareholders of First Bank, Nigeria’s oldest financial institution are seeking to stop the shocking bid by Femi Otedola, chairman of the holding company of the bank to embark on a private placement at a time the highly successful rights issue conducted by the bank has yet to be concluded and shareholders allotted their shares.

Many of the angry shareholders believe the private placement is a ploy by Otedola and some others unnamed to undertake a takeover of the bank through the back door. The aggrieved shareholders insist that any capital raise should be done by way of rights issue to give all existing shareholders fair and equitable chance to participate.

One shareholder with significant holding told a friend Thursday morning he had just paid for the initial rights issue and was yet to be allotted his shares. He complained that he was not made aware of the plans to undertake a private placement.

Another major worry of the shareholders is that they accuse Otedola of running the bank as his private estate without consultation. “The bank does not belong to Otedola, and it should be managed in the over all interest of the shareholders and not according to the whims of an individual,” one of the parties said.

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Among the shareholders who are fuming are some with significant shareholding of more than 17%. They have written to the board of the bank demanding that an emergency general meeting, EGM be held in 21 days.

In their demand, they stipulated four items that should be on the agenda of an EGM. The four items are to stop the controversial private placement, vote for the removal of Femi Otedola, the bank’s chairman and Julius B. Omodayo-Owotuga as directors of the bank. Omodayo-Owotuga is Managing Director at one of Otedola’s companies and was nominated to the board by Otedola. The shareholders also want the EGM to elect Olufemi Otudeko and Saheed Alao to the board. The call for the EGM is provided for under section 215 (1) of CAMA.

The shareholders alleged that since disgraced former Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, influenced Otedola’s acquisition of significant amount of shares that led to his emergence as Chairman of FBN Holdings, the financial institution has remained unsettled.

And they revealed that while in office, Emefelie had called the former Chief Executive Officer of FirstBank, Dr. Adesola Adeduntan, to his house in Ikoyi and instructed him to work with Otedola to help him take over the bank. He dutifully obliged and subsequently paved the way for Otedola to become a non-Executive director in the first instance, and this without security clearance from the Department of State Security, DSS and the Economic and Financial Crimes Commission, EFCC as was required.

After he had successfully taken control of the bank, Otedola orchestrated the removal of Adeduntan himself, and then followed by Tunde Hassan-Odukale, who was the Chairman of First Bank of Nigeria Limited, and he then subsequently moved against Tosin Adewuyi, whom he side-stepped for the position of CEO despite coming first in the interview conducted by a global recruitment agency, Thisday reported.

It would appear that Otedola’s calculations to complete the take over of the bank during the rights issue failed. This is largely because in December 2024, the CBN concluded the share verification of all the holding of Barbican Capital, the single largest shareholderer of the bank and which is linked to Oba Otudeko. As a result of the completion of the shareholding verification by the CBN, Barbican Capital the single largest shareholder was then able to take up all the rights due it during the capital raise, BusinessDay learnt.

The surreptitious move for a private placement is seen as the last resort. Thus, with the private placement of N360 billion, other shareholders now fear that it will give Otedola absolute control and could turn First Bank to a piggy bank without checks, balances and corporate governance.

But for Emefiele, who handed him the bank, the other shareholders contended that, Otedola could not have emerged a director of the bank.

Quuestions have been asked as to how a non-Executive Chairman of a HoldCo will sack a group head of a bank, who simply obeyed the instructions of the Managing Director and the Board of the Bank.

FBN Holdings has been a subject of battles over who holds the single largest share of the institution. First Bank Holdings, in its audited accounts for 2023, had put Otedola as the single largest shareholder with a 9.41 per cent stake in the financial institution.

But data from the Central Securities Clearing System (CSCS), the widely accepted source for confirming share ownership, has Barbican Capital, which is affiliated with the Oba Otudeko-owned Honeywell Group, as the largest single shareholder with a 15.01 per cent stake. Records kept by the bank’s registrars, Meristem Registrars & Probate Services Ltd, also showed that Barbican Capital is the single largest shareholder with 5,386,397,202 shares (5.38 billion) shares as of May 23, 2024.

Barbican Capital had sued FBN Holdings for wrongly stating its shareholding in its audited financial statement but it withdrew this case to allow the CBN carry out its verification of shares. This has now been concluded and the apex bank has written to First Bank confirming the shareholding position of Barbican Capital but BusinessDay learnt from First Bank officials that when Otedola learnt of this, he caused First Bank to ask the Central Bank for the basis for confirming the shareholding position of Barbican Capital.

It is not clear if the aggrieved sahreholders have communicated their concerns to the Security and Exchange Commission, SEC and the Central Bank of Nigeria, CBN and what they will do to stop the planned private placement.