The legal complexities surrounding Nigeria’s long-standing financial institution, FBN Holdings, have escalated due to a lawsuit filed by its largest shareholder, Barbican Capital Limited. This legal action aims to safeguard Barbican Capital’s rights over its substantial shareholding in the bank.
Barbican Capital resorted to legal measures upon receiving
notification that FBN Holdings intended to significantly reduce its
shareholding in the bank by 40% (5,386,397,202).
This move has generated confusion, as FBN Holdings’ audited
accounts for December 2023, released in May, indicated a substantial decrease
in Barbican Capital’s shareholding.
The audited accounts reported a reduction from the
previously reported 4.8 billion shares (or 13.61% of the lender’s total shares)
in the unaudited accounts of December 2023 to 3.1 billion (3,110,400,619) shares
(or 8.67% of the total shares).
Notably, a note attached to the audited accounts stated that
the 3.1 billion shares had been “verified” by the Central Bank of Nigeria.
In the legal proceedings initiated by Barbican Capital
against FBN Holdings, Barbican Capital submitted a statement obtained from the
Central Securities Clearing System (CSCS) as verifiable evidence substantiating
their total shares ownership.
The CSCS, serving as the central securities depository for
the capital market, is universally recognized as the authoritative source for
validating share ownership.
As per Barbican’s CSCS statement dated May 23, 2024, the
company held 5,386,397,202 shares, representing 15.01% ownership. Previously,
in December 2023, Barbican held 4.8 billion (4,886,062,743) shares, equivalent
to 13.61% ownership.
Barbican’s shareholding, owned by the Otudeko family, has
increased from the previously reported 13.61% to 15.01%. This adjustment
follows Honeywell’s recent consolidation of 1.5% of its affiliated shares into
Barbican.
Furthermore, court documents reveal that First Bank’s
holding company disbursed dividends to Barbican Capital for all of its
5,386,397,202 shares during the period between November and December 2023,
pertaining to the entire year of 2022. This action serves as a validation of
Barbican’s ownership of the aforementioned shares, which raises questions about
the rationale behind the bank’s subsequent actions.
The bank has recently communicated with the registrars,
Meristem Registrars & Probate Services Ltd, responsible for disbursing
dividends to shareholders, instructing them to suspend dividend payments to
Barbican Capital concerning the disputed shares.
This action has led Barbican Capital to initiate legal
proceedings against the bank. Consequently, Barbican Capital is requesting the
court's intervention to safeguard its rights, as the Central Securities
Clearing System (CSCS) records attribute 5,386,397,202 shares (15.01%) to its
ownership.
Furthermore, it asserts that "no entity or third party
is contesting ownership" of the shares it claims in FBN Holdings and that
it has "not notified the defendant (First Bank) of any transfer of its
shares to a third party in accordance with any law or the defendant's articles
of association."
In the originating summons submitted to the Federal High
Court in Lagos by Bode Olanikpekun, SAN, on July 3, 2024, Barbican Capital is
pursuing various remedies, including "a declaration affirming that the
number of shares recorded in the defendant's register of members concerning the
plaintiff (Barbican) accurately reflects the shares held by the plaintiff in
the defendant."
Among other requests, Barbican seeks "a declaration
confirming that the plaintiff's shareholding in the defendant amounts to
5,386,397,202 (as of July 1, 2024), as indicated in the dematerialized records
of the Central Securities Clearing System Plc (CSCS)."
In its legal action, Barbican asserts its entitlement to
"all membership benefits associated with the shares recorded as owned by
it in the defendant company, as reflected in the dematerialized records of the
Central Securities Clearing System Plc (CSCS)."
Additionally, it is seeking "a declaration that all
shares owned by the plaintiff in the defendant constitute the plaintiff's
personal property, along with all associated rights and privileges."
Barbican seeks additional reliefs in the lawsuit, including
a declaration affirming that the plaintiff's shareholding in the defendant
cannot be modified, dissipated, diminished, or inaccurately represented in a
manner that contradicts the plaintiff's property rights.
Furthermore, Barbican requests a perpetual injunction to
prevent the defendant, along with its officers, agents, servants, assigns, or
any representatives, from altering, misrepresenting, dissipating, or
diminishing the plaintiff's shareholding in the defendant. In an affidavit, Otu
Hughes, the Chief Investment Officer of Barbican, indicated that the plaintiff
holds 5,386,397,202 shares in the defendant as of July 1, 2024.
The defendant's unaudited consolidated statement for the
year ending December 31, 2023, confirmed that the plaintiff owned 4,886,062,743
shares, constituting 13.61 percent of the total shareholding. The defendant
distributed dividends to the applicant for all shares mentioned above between
November and December 2023 for the full year 2022.
Despite an increase in the applicant's share portfolio since
the release of the defendant's unaudited consolidated statement, the defendant
has consistently claimed that the applicant's shareholding as of December 31,
2023, and March 2024, is 3,110,400,619 shares. The defendant has ignored the
applicant's objections and has not corrected this representation.
The applicant fears that without the requested restraint
from this Honourable Court, the remainder of the lawsuit may be compromised or
rendered ineffective.
The submitted court documents indicate that "as of July
1, 2024, the plaintiff possessed and continues to possess a total of
5,386,397,202 fully paid and issued shares of the defendant."
Barbican asserted in the filings presented to the Federal
High Court that it "has clearly demonstrated the extent of its
shareholding in the defendant. It has also illustrated the actions of the
defendant that signify a depletion or reduction of this shareholding."
According to objective legal standards, this constitutes a
violation of pertinent laws, including the Constitution of the Federal Republic
of Nigeria, 1999 (as amended) and the Companies and Allied Matters Act (CAMA).
In light of the facts presented in the affidavit supporting
the originating summons and the arguments put forth in this address, we
respectfully request that this Honourable Court grant the reliefs sought in the
originating summons.