By Okafor Joseph Afam, January 9, 2025

Shareholders of First Bank, Nigeria’s oldest financial institution, have expressed outrage over a controversial N350 billion private placement proposed by Femi Otedola, Chairman of FBN Holdings. This move comes amid the ongoing allocation of shares from a highly successful rights issue conducted by the bank, leaving shareholders questioning the timing and intent behind the private placement.

Many shareholders view the private placement as a backdoor attempt by Otedola and unnamed allies to consolidate control over the bank. Aggrieved shareholders are advocating for any capital raise to be conducted via a rights issue, ensuring fairness and inclusivity for all stakeholders.

Shareholder Concerns

One significant shareholder revealed frustration, stating he had already paid for the rights issue but had yet to receive his allotment, adding that no prior notice was given about the private placement plans.

There is also mounting discontent over allegations that Otedola is running the bank as a personal enterprise. “The bank does not belong to Otedola,” a disgruntled shareholder asserted, emphasizing that First Bank should be managed in the interest of all shareholders, not according to the whims of an individual.

Demand for Emergency General Meeting

Shareholders holding over 17% of the bank’s shares have written to the board demanding an Emergency General Meeting (EGM) within 21 days, as stipulated under Section 215(1) of the Companies and Allied Matters Act (CAMA).

The proposed agenda for the EGM includes:

1. Stopping the N350 billion private placement.
2. Voting for the removal of Femi Otedola as Chairman and Julius B. Omodayo-Owotuga as a director.
3. Electing Olufemi Otudeko and Saheed Alao to the board.

Allegations of Unethical Practices

Shareholders have accused Otedola of leveraging his relationship with former Central Bank Governor Godwin Emefiele to secure his position. Reports allege Emefiele orchestrated Otedola’s takeover by instructing former CEO Dr. Adesola Adeduntan to support the move, bypassing mandatory security clearances.

Subsequently, Otedola allegedly facilitated the removal of Adeduntan, former Chairman Tunde Hassan-Odukale, and sidelined Tosin Adewuyi for the CEO position despite his qualification.

Ownership Dispute

Ownership battles have long plagued FBN Holdings. While the 2023 audited accounts list Otedola as the largest single shareholder with 9.41%, data from the Central Securities Clearing System (CSCS) identifies Barbican Capital, linked to Oba Otudeko, as holding 15.01%. The Central Bank of Nigeria (CBN) recently confirmed Barbican Capital’s stake, which has further complicated the dynamics.

Fears Over Corporate Governance

The private placement is seen by some as Otedola’s last resort to gain absolute control, sparking fears of eroding corporate governance. Shareholders worry that such dominance could turn First Bank into a personal asset without adequate checks and balances.

Next Steps

It remains unclear whether the aggrieved shareholders have escalated their concerns to the Securities and Exchange Commission (SEC) or the CBN. The financial community awaits their response as tensions within First Bank continue to mount.

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Okafor Joseph Afam reports on business and corporate affairs.