- First Bank Shares Dip Dramatically Over Crisis
- Court Restrains First Bank From Freezing GHL Assets
By Abiola Olawale
The turbulence, air of uncertainty and crisis confronting Nigeria’s oldest financial institution, First Bank of Nigeria (FBN), have escalated as eminent business mogul, respected investor and industrialist, Oba Otudeko and several shareholders of First Bank have weighed in a bid to tame the raging crisis triggered by Femi Otedola, chairman of the bank and one of his his lackey, Julius Omodayo-Owotuga, a non-executive director in FBN Holdings plc.
This latest move comes as recent concerns heightened over the ongoing struggle, and war for control over First Bank Holdings Plc between Chairman, Femi Otedola, and billionaire business mogul and one of Nigeria’s most legendary investors, Oba Otudeko.
This also comes days after it was reported that Oba Otudeko is leading concerned shareholders of First Bank of Nigeria Holdings Plc (FBN Holdings) to initiate a move to trigger a shake-up in the leadership of the company’s Board in a bid to oust Otedola as chairman.
It was gathered that the shareholders of First Bank Holdings Plc are said to be currently pushing for an extraordinary general meeting (EGM) to accomplish that goal.
The New Diplomat’s checks reveal that most stakeholders declared that the demand for the EGM is in line with section 2615 (1) of CAMA, in which case they have 21 days to call the EGM.
It was gathered that the key focus of the upcoming meeting is to discuss and explore likely ways for the possible removal of Femi Otedola from his position as chairman, along with the potential removal of one Julius B. Omodayo-Owotuga from his role as a non-executive director.
The stakeholders explained that the demand for the EGM comes amidst concerns over governance and control issues within the bank.
They added that the call for this EGM is to address allegations that Otedola has exerted too much control over the bank since he emerged as Chairman, facilitated by the immediate past governor of Central Bank Governor (CBN), Godwin Emefiele, who is facing several corruption charges.
Critics among the shareholders have expressed concerns over corporate governance and ethical issues, fearing that with a proposed N360 billion private placement, Otedola could gain very strong control over the financial institution, a move that could trigger conflict of interest and corporate governance concerns.
It would be recalled that this situation is reflective of a broader power struggle within First Bank, where the battle for control and indeed war, among major and critical shareholders has been fierce.
Recall that Oba Otudeko, a matured and distinguished investment guru had initiated a legal action against FBN Holdings, seeking a court order to compel the financial institution to recognise his investment vehicle, Barbican Capital, as the largest shareholder in the bank. If he succeeds, this would effectively block Otedola from gaining recognition as the largest single shareholder in First Bank Holdings.
Otudeko, in the lawsuit (no. FHC/L/CS/1172/24), maintains that Barbican Capital owns a 15.01 per cent stake amounting to 5.38 billion units.
However, the bank insists that Otedola, who holds a 9.41 per cent share, is the largest shareholder.
In the meantime, the battle for the soul of First Bank, Nigeria’s oldest financial institution, rages in and out of the courtrooms.
Also, another dynamics that has surfaced amid this raging battle for the control of the soul of First Bank between Oba Otudeko and Otedola is revelations that the later faces serious allegations of court contempt in a legal dispute between General Hydrocarbons Limited (GHL), an Oil and Gas company and First Bank.
It would be recalled that the Federal High Court in Lagos had issued an order restraining First Bank from taking any steps to enforce any security, receivables, instruments, or finance documents or assets of General Hydrocarbons Limited (GHL).
The directive was issued following reports of GHL’s formal decision to approach the court, prompted by First Bank’s purported failure to uphold and maintain its obligations under a financial agreement as determined in a binding and subsisting MoU between the two feuding parties.
It was gathered that this deal pertained to the funding necessary for the exploration and development of Oil Mining Lease (OML) 120. The GHL contended that First Bank had not honoured the commitments outlined in their original binding contract, leading to significant concerns regarding the future of the oil project.
Meanwhile, in a separate suit, the GHL has again dragged First Bank and Otedola to court over alleged failure to adhere to court orders.
In the suit, the GHL argued that First Bank purportedly obtained a court injunction freezing its funds in commercial banks across the country to the tune of $225.8 million in violation of an earlier court order.
As a result, GHL initiated contempt proceedings against FBN and its directors, including Femi Otedola, the Chairman of FBN Holdings.
This means Otedola faces potential arrest for allegedly obtaining a Mareva order (an injunction that freezes assets) without disclosing to the court that the case had already been argued and determined.
Alongside Otedola, other directors such as the Managing Director, Olusegun Alebiosu, are also facing contempt charges.
Part of the court documents read: “An order is granted, restraining the Respond either by itself or acting through its servants, agents assign, privies affiliates howsoever described, including any person claiming under its authority from making any calls or demands or taking any steps whatsoever to enforce any security receivables, instrument, finance documents or assets of the Applicant which have been charged as security for the facility agreements in respect of the Applicant’s operation of OML 120.
“(This) includes, but is not limited to the said letter and the amended and restatement agreements between the Applicant and the Respondent pending the hearing and determination of the arbitration proceedings between the Applicant and the Respondent brought under Clause 12 (c) of the Agreement between the Applicant and the Respondent dated 29th May 2021.”
