THE Securities and Exchange Commission (SEC) has admitted granting approval to the controversial sale of Oba Otudeko’s shares at First HoldCo Plc.
It admitted to this in a statement on Thursday, July 24 by its head of external relations, Efe Ebelo.
According to the apex regulator in the Nigerian capital market, it granted a “no objection” to the transaction.
A no objection signifies that the SEC has reviewed a proposed transaction and has no objections to it proceeding, provided all other regulatory requirements are met.
“The Securities and Exchange Commission (SEC) Nigeria wishes to clarify its position regarding the recent First Holdco Transaction.
“In line with extant laws and SEC regulations, the Commission granted a “no objection” to the transaction after due consideration and in full compliance with applicable requirements,” it stated.
SEC clarification came a week after the investing public, including shareholders, raised concerns over the undisclosed details surrounding the transaction.
The ICIR reported that on July 16, Otudeko, through a firm linked to him, Barbican Capital Limited, sold all his stake, approximately 20 per cent of FirstHoldCo shares.
The transaction generated a lot of concerns as the SEC or the Nigerian Exchange Limited (NGX) did not release any official disclosure of the transaction.
Following media attacks on the transaction, on July 19, FirstHoldco, the parent company of First Bank of Nigeria Limited, disclosed that Otudeko offloaded 6,314,116,229 units of shares at N31.00 per share, amounting to N195.74 billion but without revealing the buyer or giving full details of the transaction.
In a report on July 19, The ICIR spotlighted that the sale of Otudeko’s shares raised corporate governance issues.
A similar incident occurred in July 2023, after Oba Otudeko staged a comeback 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, The ICIR had reported.
At the time, this sparked a concern that the CBN had quickly tweaked its corporate governance rule.
The rule is to protect shareholders’ rights and it came into effect from August 1, 2023.
The new corporate governance guidelines states in section 20 (b) that “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 forty-eight (48) hours.
Many shareholders who spoke with The ICIR on Otudeko’s shares offload alluded to the corporate governance rule and blamed CBN and SEC for not adhering to their guidelines.
In its statement on Thursday, the SEC said there was no subsequent request for additional information from the CBN following the conclusion of the transaction.
“It is important to note that the Commission’s correspondence with the operators involved was not a query. Rather, it was an automated compliance mechanism designed to promote transparency and ensure proper conclusion of large transactions within the market,” it added.