OBA Otudeko’s name has yet to be added to the shareholding structure of FBN Holding Plc (FBNH) despite his recent acquisition of 4.77 billion unit shares that put his stake to 13.3 per cent.
The FBNH’s unaudited consolidated financial statements for September 30, 2023, released to the investing public on Friday, October 27, showed that Femi Otedola holds the single largest shareholder with a total substantial shareholding of 1.9 billion units or 5.57 per cent of the bank’s 35.8 billion issued share capital, followed by Tunde Hassan-Odukale with 1.58 billion or 4.40 per cent of stake.
Otudeko had, in a transaction in July, snapped over four billion units of shares in a N87.8 billion deal to stage a comeback in FBNH’s shareholding structure.
The acquisition made his stake leap to about 13.3 per cent against other shareholders.
His company, Honeywell Group Limited, through its affiliate, Barbican Capital Limited, facilitated the acquisition.
In a notification dated July 7, signed by its acting company secretary, Adewale Arogundade, FBNH confirmed the acquisition to the investing public.
The bank stated, “This is to inform the public and our shareholders that the company received a notification dated July 7, 2023, from Honeywell Group Limited that its affiliate, Barbican Capital Limited, has acquired an aggregate of 4,770,269,843 (4.7 billion) units of shares from the company’s issued share capital of 35,895,292,791, (35.89 billion) as at the above-referenced date.
“Based on the foregoing, the equity stake of Barbican Capital Limited in the company is 13.3%.”
The acquisition, however, elicited mixed reactions from stakeholders in the capital market to the point that some stakeholders told The ICIR that even though Otudeko did not commit any market infraction in the transaction, the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), should have investigated the matter closely.
At the time, some majority shareholders had expressed displeasure with Otudeko’s supposed move to reclaim control of the bank holding company.
CBN had, in April 2021, removed Otudeko as FBNH’s non-executive director/chairman and sacked the board under him over noncompliance with regulatory control.
Before his dismissal, Otudeko’s Honeywell Nigeria was hugely indebted to First Bank through insider borrowing, which affected the bank’s non-performing loan until the CBN placed the bank under a regulatory forbearance for some years.
Following this mistrust, most shareholders were reported to be concerned about the consequences of having Otudeko back in control of the bank in any capacity.
An enquiry by The ICIR to FBNH was not responded to on why Otudeko’s stake was not mentioned in the bank’s shareholding structure in the third quarter result.
The bank’s head of Corporation Communications, Folake Ani-Mumuney, when contacted, did not pick up calls put across to her phone line, nor did she respond to the WhatsApp message sent to her.
Analysts who spoke with The ICIR said it is evident that the regulators have yet to approve Otudeko’s recent “backdoor” acquisition, the reason his stake was not mentioned in the FBNH shareholding structure in the Q3 financial statement.
If the central bank had approved the transaction, Otudeko would have been mentioned and automatically become the chairman of the bank’s board, the experts said.
Twist to Otudeko’s FBNH acquisition
Following Otudeko’s acquisition, Ecobank Nigeria had demanded FBNH to reject the approval of the shares as proceeding with such consent would have assisted in diverting funds meant for the payment of the debt Otudeko, and his company owed the bank.
Ecobank had in a letter through its lawyer, ‘Kunle Ogunba & Associate, dated July 7, 2023, and addressed to the Managing Director of FBNH [Nnamdi Okonkwo], stated that the Honeywell Group and Otudeko were indebted to the bank to the tune of N13.5 billion, ThisDay reported.
The loans were personally guaranteed by Otudeko, the Ecobank’s head of corporate communications, Austen Osokpor, told The ICIR.
Ecobank’s judgment debt
The executive vice-chairman of Highcap Securities Limited, David Adonri, told The ICIR that he did not see how the judgment debt to Ecobank should affect the shares transaction if the company Otudeko used in buying his controlling ownership of FBNH was not the judgment debtor.
“However, CBN needs to investigate this objection by Ecobank and other alleged breaches of trust by Oba Otudeko when he was Chairman of FBNH to approve or disapprove the transaction,” he said.
Adonri said if there was any regulatory sanction against Otudeko, he might not qualify as a director in FBNHolding even if he had controlling power by his percentage of shares acquisition.
“So, his company, now the majority shareholder, might have to nominate another person instead of him. However, I am unaware of any sanction that prohibits him from being a bank director,” he pointed out.
An investment and portfolio analyst, Abel Ezekiel, however, questioned the transaction that gave Otudeko the FBNH new shares.
For Ezekiel, no matter how the regulatory bodies looked at the dealing matters, what is apparent is that Otudeko registered a company, Barbican Capital Limited, in March, through which he purchased the shares.
“The deal is unclear; it is an infraction,” Ezekiel asserted, noting that Otudeko is the founder and chairman of the Honeywell Group.
The national chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, saw Otudeko’s acquisition of fresh shares in FBNH as a welcome development for the growth of the entity and its subsidiary companies.
“What the average investor wants is good dividends, not tips, and also capital appreciation. That is what we look for, and the legacy of the very institution is very crucial.
“I believe Oba Otudeko has paid his dues in developing the Nigerian capital market and is still paying. I welcome him and wish him well in this second coming, if there is anything like that because he never went away from the market or the industry,” he said.
The chief executive officer of Dairy Hills Limited, Kelvin Emmanuel, said the cross-deal was controversial and could be traced to what happened years back when the Central Bank had to fire the board of FBNH under Otudeko as chairman.
There is already a renewed tussle over who controls the bank board, Emmanuel said on Wednesday, July 12, on Channels Television.
This could give one an understanding of the issue surrounding Ecobank’s claim of N13.5 billion on Otudeko and Honeywell Group, he added.
Otudeko, the chairman of Honeywell Group, faulted Ecobank’s claim of owing the bank N13.5 billion, asking FBNH to disregard the letter not to approve his 4.7 billion shares acquisition.
Responding to the bank’s claim, Wole Olanipekun, counsel to Otudeko and Honeywell Group, said the N13.5 billion debt stated in Ecobank’s letter was not contained in the Supreme Court’s decision or any extant court decision in Nigeria or elsewhere. TheCable reported.
It said Honeywell’s reply was contained in a letter dated July 10 and addressed to the managing director of FBNH.
Olanipekun said in the letter that no court order awarded the amount or any judgment sum (as debt owed) in Ecobank’s favour.
“We write at the instance of Dr Oba Otudeko, CFR and Honeywell Group Ltd. (our Clients), whose attention have been drawn to a letter dated 7th July, 2023 (written on the instruction of Ecobank Nig. Ltd.) with the above subject,” the Honeywell letter read.
However, Otudeko’s stake in FBNH has remained in limbo as many stakeholders are wondering why the regulatory authorities have yet to decide on the matter.