Ecobank has urged First Bank Holdings to reject the acquisition of 4.7 billion shares by a former Chairman of the bank, Dr Oba Otudeko.
The bank raised the alarm in a letter written by its Legal
Counsel, Kunle Ogunba & Associates, in which it stated that the business
magnate, through his affiliated entities, owed the bank N13.5bn.
The letter, dated July 7 and signed by the Principal Partner
of the law firm, Oludare Amusan, said the bank had instituted several lawsuits
against Honey Group Limited, Siloam Global Services Limited, Anchorage Leisures
Limited, Honeywell flour Mills PIc and Dr Oba Otudeko at the Federal High
Court, Lagos.
According to the letter made available, the legal tussle
between Otudeko and the bank was in view of recouping the debts owed by the
highlighted business entities.
The letter said Otudeko personally guaranteed the loan
leading to the indebtedness of the prior-mentioned companies.
The letter read in part, “Whereas, the prior-mentioned
entities had initially disputed their indebtedness to our client and had
consequently filed an action in court to that effect, the Supreme Court on the
27th day of January, 2023 in Appeal No. SC/CV/210/2021 delivered Judgment
(Certified true copy of which is herein attached) affirming the indebtedness of
the above persons to our client and further commanded that they must pay all
the outstanding debts that have accrued under the loan contract between the
parties; the same debt personally guaranteed by Dr Oba Otudeko, which said
indebted stood in the sum of N13,507,052,417.99.”
The bank, through its lawyers, alleged that instead of
taking urgent steps to repay their indebtedness in line with the mandate of the
supreme court, it had come to its notice that Otudeko, who had personally
guaranteed to pay the said debt, had taken steps to divert his assets/funds
using a company known as Barbican Capital Limited as a special purpose vehicle.
The letter read, “We state that the said Dr Oba Otudeko has
via the said Barbican Capital Limited allegedly purchased 4,770, 269, 843, (Four billion, Seven hundred
and seventy million, two hundred and sixty-nine thousand, eight hundred and
forty-three) shares of FBN Holdings Plc.”
The letter said the bank had been informed that the said
shares were purchased via 19 business entities and were currently being held by
10 different companies.
Basing its argument on the aforementioned facts, the law
firm said that it was beyond doubt that the actions being taken by Otudeko were
targeted as diverting his assets and that of the Honeywell Group of Companies
through the said Barbican Capital Limited, in order to frustrate the
enforcement of the judgment of the Supreme Court against him and the Honeywell
companies, towards recovering his/their unđisputed indebtedness to Ecobank.
The letter added that, “We therefore demand that you
respectfully stay/reject the approval/consent/registration/ratification
{howsoever described or in whatsoever manner of the shares bought by the said
Barbican Capital Limited held via the afforested entities, as proceeding with
such approval/registration will be tantamount to assisting in the diversion of
funds/assets meant for the payment of the debt which has been affirmed by the
Supreme Court, same being a flagrant violation of the extant judgment of the
Supreme and which has effectively determined the outstanding indebtedness
between the Honeywell Group and our client, Ecobank Nigeria Limited,” the
letter said.
The letter also demanded the details of the said transaction
within the ensuing seven days, noting that as a responsible corporate entity,
FBN Holdings was not expected to take an action that would encourage the
violation of a supreme court ruling.
The appeal by the lender follows an earlier report that Oba
Otudeko’s Honeywell Group had bought the largest shares of First Bank of
Nigeria Holdings Plc in a cross deal worth N87.8bn.
The shares which Otudeko bought at N19 per unit were the
largest volume of First Bank shares traded in a single day since 2012 when the
stock exchange started publishing data.
The acquisition of the shares raised allegations over the
validity of the trades considering that no single shareholder hitherto
officially owned as many shares.
Otudeko, who was chairman of First Bank until 2019, was
believed to be making a swift comeback to become the single largest shareholder
of the bank.
Billionaire Femi Otedola became the bank’s single largest
shareholder in 2021 after a tussle with Hassan Odukale who was also vying for
control of the bank after a leadership gap emerged from Otudeko’s exit.
In response to the billionaire’s attempt to return to the
bank, some shareholders of the company were said to have met on Monday to
discuss the matter.
The shareholders, who were bent on preventing Otudeko from
taking control of the bank, were said to be concerned about the consequences of
having Otudeko back in control of the bank in any capacity, especially after
being unceremoniously ousted by the central bank in 2021.