THE Elumelus and six other directors of United Bank for Africa (UBA) have, in fresh dealings, acquired 50,712,619 units of the bank’s shares worth approximately N1.075 billion.
The bank disclosed this in 16 notifications released to the investing public on Friday, November 3.
According to the notifications, relatives of the chairman of the board of directors of UBA, Tony Elumelu, and six of the company’s directors were involved in the transactions.
Ten out of the 16 dealings totalling 1.15 million units of the bank’s shares valued at N24.19 million were bought by the relative of the UBA board chairman.
Their names are Ogochukwu Elumelu, Onyekachukwu Elumelu, Onyinye Elumelu, Toby Elumelu, Nneka Elumelu, and Awele Viven Elumelu.
Also, in the new dealings, the six other directors acquired 49.57 million units of shares valued at N1.051 billion.
The directors are Alex Alozie (executive director), Oliver Alawuba (group managing director), Muyiwa Akinyemi (deputy managing director), Taiwo Sonola (head, global investor services), Michael Ilobah (group head business assurance), and Adeleke Adeyemi (group treasurer).
Some analysts believe the UBA chairman is using his relatives as proxies to boost his stake in the bank’s shareholding structure now that the Central Bank of Nigeria (CBN) has an aversion against investors acquiring a large volume of shares in one fell swoop.
The apex bank had, in a recent direction, tweaked its corporate governance rule after Oba Otudeko staged a comeback to FBN Holdings.
Otudeko had sparked a fresh battle for control of FBN Holdings when, in July this year, he acquired about 4.77 billion units of FBN Holdings’ shares valued at N87.8 billion.
Following the intrigue that ensued over Otudeko’s huge volume purchase, CBN had to come up with new corporate governance guidelines that took effect from August 1, 2023.
“In exercise of powers conferred by the Central Bank of Nigeria (CBN) Act 2007 and the Banks and Other Financial Institutions Act 2020, the Central Bank of Nigeria (CBN) hereby issues the Corporate Governance Guidelines for Commercial, Merchant, Non-Interest, and Payment Services Banks in Nigeria; and the Corporate Governance Guidelines for Financial Holding Companies in Nigeria.
“CBN’s prior approval and No Objection shall be sought and obtained before any acquisition of shares of a bank (including through the capital market) that would result in equity holding of five per cent (five per cent) and above by any investor,” the apex bank’s directive read.
Meanwhile, as of June this year, Elumelu had a 7.38 per cent stake in UBA’s shareholding structure. The ICIR analysis of the bank’s interim consolidated and separate financial statements for June 30, 2023, shows.
A breakdown of his shareholding reveals that Elumelu has an aggregate of 2.53 billion units of shares made up of 194.67 million units of direct shares and 2.33 billion units of indirect shares.
The indirect shares were acquired through HH Capital Limited (287.61 million units), Heirs Holdings Limited (1.81 billion units), and Heirs Alliance Limited (231.09 million units).
Even though it is legally proper for Elumelu to buy more of UBA’s shares through proxies, does that make it morally right? A stock market analyst, who requested anonymity, told The ICIR, “Legally, those transactions certified the position of SEC [Securities and Exchange Commission] rule and regulations as far as trading in the capital market are concerned. Morally, it goes to water down the holdings of minority investors.
“On the business side, the core investors are deepening their portfolios, buying more shares, and increasing liquidity to the detriment of other investors,” the analyst added.