Shareholder Dispute Escalates at First Bank of Nigeria

A major shareholder dispute has erupted at First Bank of Nigeria, escalating from boardroom disagreements to courtroom battles. The conflict centers around the bank’s largest shareholding, involving current Chairman Femi Otedola and Oba Otudeko, founder and chairman of Honeywell Group.

Here are ten key points about the ongoing dispute:

1. Main Contenders: The dispute is between Femi Otedola, Chairman of First Bank, and Oba Otudeko of Barbican Capital, which is affiliated with Honeywell Group. Otudeko claims Barbican Capital holds the largest share in the bank.
2. Shareholding Dispute: Barbican Capital asserts that it owns 15.01% of First Bank’s shares (5.38 billion units), while alleging that Otedola owns only 9.41%. The bank disputes this, claiming that Barbican’s share documentation is incomplete and that a Central Bank of Nigeria (CBN) verification revealed discrepancies.
3. Legal Proceedings: The case has been filed at the Federal High Court in Lagos. The initial court hearing occurred, with the case adjourned to October 2, 2024, for further proceedings.
4. Central Bank’s Stance: Recent reports suggest the CBN is supporting Otedola’s claim. According to BusinessDay and ThisDay, the CBN and FBN Holdings have requested the court to dismiss Barbican’s suit over alleged share alterations.
5. Verification Issues: First Bank argues that Barbican has not contested the CBN’s verification results. However, Barbican has presented a statement from the Central Securities Clearing System (CSCS), which it claims confirms its 5.386 billion shares as of May 23, 2024, and has argued that dividends for these shares were paid for 2022.
6. Implications for Leadership: The outcome of the case will determine who becomes the chairman of First Bank.
7. Dividend Payments: Barbican alleges that First Bank has instructed Meristem Registrars to freeze dividend payments on the contested shares.
8. Regulatory Compliance: First Bank asserts that Barbican failed to comply with CBN regulations regarding share purchases and notifications. The bank claims it sought the CBN’s approval for Barbican’s shareholding but that Barbican did not provide necessary documentation.
9. Historical Context: Oba Otudeko served as First Bank chairman until April 30, 2021, when he was removed by former CBN Governor Godwin Emefiele, along with other bank directors.
10. Prognosis: The case is expected to be protracted unless an out-of-court settlement is reached.

As the dispute continues, stakeholders are closely watching the court’s decision, which could significantly impact the leadership and shareholding structure of First Bank of Nigeria.

Olasunkanmi Oduntan, the publisher of ‘The New Dawn Online News – TNDOnlineNews’, writes from Lagos, Nigeria.