Outraged First Bank Shareholders Seek to Stop ‘Strange’ N350bn Private Placement

Shareholders of First Bank, Nigeria’s oldest financial institution, are raising alarms over plans to execute a private placement valued at ₦350 billion. Many believe the move, spearheaded by Femi Otedola, Chairman of FBN Holdings, is an attempt to consolidate control over the bank without adequate transparency or fairness.

The controversy arises amid an ongoing rights issue by the bank, with some shareholders yet to be allotted their shares. Critics of the private placement argue it circumvents the rights of existing shareholders, depriving them of an equitable opportunity to participate in capital raising.

Shareholder Concerns

Key shareholders, including those holding over 17% equity, have expressed frustration, alleging that Otedola has been managing the bank like a personal asset without adequate consultation. They are particularly concerned about the lack of communication regarding the private placement, which some claim is being conducted to “take over the bank through the back door.”

One shareholder lamented, “I just paid for the rights issue and haven’t been allotted my shares, only to hear about a private placement.”

Call for Emergency General Meeting

Aggrieved shareholders have formally written to the board, demanding an Emergency General Meeting (EGM) within 21 days. Their agenda includes four key points:

• Halting the proposed private placement.
• Voting for the removal of Femi Otedola as Chairman and Julius B. Omodayo-Owotuga as a director.
• Electing Olufemi Otudeko and Saheed Alao to the board.
• Addressing governance concerns under Section 215(1) of the Companies and Allied Matters Act (CAMA).

Allegations of Influence and Governance Issues

Shareholders have also accused Otedola of leveraging former Central Bank of Nigeria (CBN) Governor Godwin Emefiele’s influence to gain control of the bank. Allegedly, Emefiele directed the former CEO of First Bank, Dr. Adesola Adeduntan, to collaborate with Otedola, which facilitated his ascent to the board. Otedola has since been accused of sidelining other executives and bypassing due process in key appointments.

Battle for Largest Shareholder

Ownership disputes have further complicated matters. While FBN Holdings’ 2023 audited accounts list Otedola as the largest shareholder with a 9.41% stake, data from the Central Securities Clearing System (CSCS) and the bank’s registrar, Meristem, indicate Barbican Capital, linked to Honeywell Group’s Oba Otudeko, holds a 15.01% stake.

Barbican Capital had previously sued FBN Holdings over misrepresentation of its shareholding but withdrew the case to allow the CBN to verify shares. The CBN has since confirmed Barbican’s position as the largest shareholder, further fueling tensions.

What’s Next?

Shareholders are reportedly considering escalating their concerns to the Securities and Exchange Commission (SEC) and the CBN. They argue that the proposed private placement could undermine corporate governance and concentrate unchecked power in Otedola’s hands.

The situation underscores long-standing governance challenges at First Bank, as shareholders brace for a critical showdown to protect their interests.