THE parent company of First Bank of Nigeria Limited has confirmed its former chairman, Oba Otudeko’s sale of N195.74 billion worth of shares, ending rumours over the transaction but eliciting corporate governance concerns.

The confirmation, contained in a regulatory disclosure to the investing public on Friday, July 18, was signed by the FirstHoldCo secretary, Adewale Arogundade.

It revealed that Barbican Capital Limited, a firm linked to Oba Otudeko, sold its 6,314,116,229 units of shares at N31.00 per share in a transaction that took place on July 16.

The bank did not state the buyer in its notification despite the controversies that have trailed the sale of the shares and the corporate governance issue it has raised.

There had been unconfirmed reports making the rounds over who had taken over the stake of Oba Otudeko at the bank.

Earlier reports, on Thursday, July 17, allegedly claimed that the incumbent chairman of FirstHoldCo, Femi Otedola, acquired the shares.

On Friday, July 18, a news platform reverted its report, claiming that a trustee acting on behalf of the federal government acquired the shares.

Another media report on Friday claimed the transaction was executed by RC Investments Limited, a special purpose vehicle (SPV) linked to Renaissance Capital.

Amid this controversy, the Central Bank of Nigeria (CBN) and Securities and Exchange Commission (SEC), which are the apex regulators, have kept silent on the matter.

The ICIR contacted the head of corporate communications at CBN, Hakama Sidi Ali, and her counterpart at SEC, Efe Ebelo, but they have yet to respond to its enquiry about the sale of the transaction and the issue of corporate governance compliance it has evoked.

Corporate governance issues at play

The ICIR had reported on a similar concern that came up in 2023, after Oba Otudeko staged a comeback in July that year and acquired about 4.77 billion units of First Bank’s shares valued at N87.8 billion to retain his stake as the most substantial shareholder.

Following the intrigue that ensued over Otudeko’s huge volume purchase acquisition at the time which sparked a fresh battle for control of the bank, the CBN was prompted to tweak its corporate governance rule.

To protect shareholders’ rights, the CBN had to issue new corporate governance guidelines that took effect from August 1, 2023.

It states, section 20 (b) “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 (5%) and above, by any investor.

(c) “Where the CBN has an objection on any acquisition as stated in Section 20.2.b above, notice of the objection shall be communicated to the bank, and the bank shall notify such investor(s) within fortyeight (48) hours.

(d) “Government’s direct and indirect equity holding in a bank shall not be more than ten per cent (10%), which shall be divested to private investors within a maximum period of five years from the date of investment.”

Shareholders blame CBN, SEC for regulatory failure

According to shareholders who spoke unanimously with The ICIR on the matter, Oba Otudeko has the right to sell his shares to anybody, whether a personal or corporate body.

They, however, raised concerns about the negotiated transaction which they said raises worries about critical systemic issues in the Nigerian capital market.

“I believe that the regulatory authorities have to ensure compliance with laid down rules and uphold the integrity of the transaction,” one shareholder said.

“The regulators are the problem the economy and the Nation are facing. Now Emefele [former CBN governor] did his own and got away, and the current CBN governor is now doing the same thing all over again. Who then set the rules? Another shareholder said.

He lamented that the laws are made for the common man, not for the big man in Nigeria, stressing that what CBN is doing is also what SEC is doing in the Name of regulation, asking whose interest.

Querying why CBN did not apply the same measures to the defunct Afribank, he further lamented what the CBN had done with the Union Bank it took over.

“What happened to the 10 per cent allowed as stated in the guidelines,” the shareholder asked.

Adding that any shareholders reserve the right to share his or her shares or divest holdings to another sector of the economy, he maintained, “If there is any lopsidedness in the transaction, those who should be blamed are CBN, SEC and NGX Limited.”