The group of shareholders of outraged shareholders of First Bank, Nigeria’s oldest financial institution who are are seeking to stop the shocking bid by Femi Otedola, chairman of the holding company of the bank to launch a private placement is growing according to insiders at the bank.
Many of the shareholders who are now speaking out seemed to have been kept in the dark about the private placement until revelations in the media.
On Thursday, Norsworthy Investment Limited linked to Gabriel Ogbechie wrote to the company secretary of First Bank Adewale Arogundade expressing “grave concern” over media reports that the bank is launching a private placement at a time the bank’s highly successful rights issue has yet to be concluded and shareholders allotted their shares.
In the letter signed by Gabriel Ogbechie, Norsworthy which said it holds 337,347,804 shares said, “our understanding is that existing shareholders ought to be given ample opportunity to take up additional shares, and that a private placement will subsequently only be considered as a last resort.”
Read also: Outraged First Bank shareholders seek to stop ‘strange’ N350bn private placement
Norsworthy which says it must be given the opportunity to exercise its rights, is asking for supporting documentation, “particularly a report from the financial advisers to the capital raising exercise detailing the current status of the exercise (rights issue) and the reasons for their recommendation of a private placement.”
It also asked for all information relating to the requisition made by Barbican Capital and Industrial Mercantile and Investment Company.
Many of the angry shareholders say they suspect 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.
On January 7, 2025 Barbican Capital and Industrial Mercantile and Investment Company, two shareholders who hold more than 17% took the lead in requisitioning for an emergency general meeting, EGM.
Another 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 overall interest of the shareholders and not according to the whims of an individual,” one of the parties said.
Those calling for the EGM hold equity of more than 17% which is well over the required threshold of 10 percent.
They say they speak for majority of the shareholders of the company in calling for an EGM to stop the planned private placement.
In the letter of January 7th, 2025 and sent to the bank’s company secretary Adewale Arogundade, the shareholders requisitioned for an emergency general meeting, EGM for the purpose of transacting the following business and to pass the listed resolutions.
They are that the capital raise in the aggregate of N350bn 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 a rights issue only.
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That this resolution amends and supersedes the resolution passed at the 12th AGM held on November 14, 2024 regarding the raising of additional capital for the company.
That Olufemi Otedola, CON and Julius B. Omodayo Owotuga be removed as directors of the company.
And, finally that Obafemi Otudeko and Saheed Olatunbosun Alao be appointed as directors of the company, subject to the approval of the Central Bank of Nigeria, in replacement of the removed directors.
Omodayo-Owotuga is the Managing Director at one of Otedola’s companies and was nominated to the board by Otedola. 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 shareholding verification has now been concluded and the apex bank has written to First Bank confirming the full shareholding position of Barbican Capital.
EGM’s. are rare events and often signal internal crisis of loss of faith in leadership and which is why the regulatory authorities are expected to take this seriously, especially as FBN is a legacy institution that has become the prominent example of the sustaining power of the Nigerian shareholder.
Clearly this private placement approach undermines the interests of all other shareholders which is why the shareholders consider it dangerous as it could see the current chairman pre-allocating shares to himself and the entities holding his interests to the detriment of all other shareholders.
Last night Barbican Capital which holds 15.1% equity in First Bank said it had on December 31 2024 received an invitation to participate in the private placement, but it stressed its support for a “fair and transparent capital raising process that allows all shareholders regardless of their holdings, to participate equitably.”
It said “the success of the rights issue has demonstrated the capacity of existing shareholders to fully subscribe to therir allocations and, in many cases, exceed them. It is therefore imperative that FBN Holdings’ more than 1.2 milliion shareholders are not denied the opportunity of participating in this next phase of capital raising. Moreover, any new capital raise should only proceed after the full execution of the allotment from the recently concluded rights issue.”
It is not clear if the aggrieved shareholders have now ommunicated their concerns to the Security and Exchange Commission, SEC and the Central Bank of Nigeria, CBN as was mentioned and what they will do to stop the planned private placement.
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