Ecobank has encouraged First Bank Holdings to decline the purchase of 4.7 billion shares by Dr. Oba Otudeko, a former chairman of the bank.
The business magnate owes the bank N13.5bn through his associated firms, according to a letter from the bank’s legal counsel, Kunle Ogunba & Associates, which raised the alarm.
The bank had filed 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 in Lagos, according to a letter dated July 7 and signed by the law firm’s principal partner, Oludare Amusan.
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 claimed through its attorneys that Otudeko, who had personally guaranteed to pay the said debt, had taken actions to divert his assets/funds using a company known as Barbican Capital Limited as a special purpose vehicle, rather than acting quickly to repay their debt in accordance with the supreme court’s directive.
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.”
According to the letter, the bank had been informed that the aforementioned shares had been acquired through 19 distinct legal organizations and were currently held by 10 separate businesses.
Based on the aforementioned facts, the law firm argued that it was beyond a reasonable doubt that Otudeko’s actions were intended to divert his assets and the assets of the Honeywell Group of Companies through the aforementioned Barbican Capital Limited, preventing the enforcement of the Supreme Court’s ruling against him and the Honeywell companies, which was intended to recover their undisputable debt 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 required the specifics of the transaction within the following seven days, stating that FBN Holdings was not expected to operate in a way that would encourage the disregard of a supreme court decision as a responsible corporate company.
The lender filed the appeal in response to The PUNCH’s earlier revelation that Oba Otudeko’s Honeywell Group had acquired the majority stake in First Bank of Nigeria Holdings Plc in a cross transaction for N87.8 billion.
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.
Given that no single shareholder had ever before formally owned as many shares, the acquisition of the shares sparked accusations regarding the legitimacy of the trades.
Otudeko, who served as First Bank’s chairman from 2014 to 2019, was rumored to be quickly returning to become the bank’s single largest shareholder.
After a tussle with Hassan Odukale, who was also seeking for control of the bank after Otudeko’s departure, billionaire Femi Otedola ended up as the bank’s sole shareholder in 2021.
Some shareholders of the company allegedly met on Monday to discuss the subject in reaction to the billionaire’s attempt to go back to the bank.
The shareholders, who were adamant about keeping Otudeko from taking leadership of the bank, reportedly worried about what would happen if Otudeko were to regain control of the institution in any capacity, particularly after being abruptly removed by the central bank in 2021.