The struggle for control over First Bank of Nigeria Holdings, one of Nigeria's largest financial institutions, has been ongoing for several weeks without a resolution as shareholders of FBN are demanding an extraordinary general meeting to remove Chairman Femi Otedola and Deputy CEO Julius Omodayo-Owotuga.
FBN shareholders have called for an Extraordinary General Meeting (EGM) under the Companies and Allied Matters Act (CAMA) with the intention of removing Chairman Femi Otedola and Deputy CEO Julius Omodayo-Owotuga.
A faction of shareholders holding 10 percent of First Bank of Nigeria Holdings Plc's shares formally requested the convening of an EGM on Wednesday, as stipulated in section 215 (1) of CAMA, which requires the company to organize the meeting within 21 days.
The primary focus of this proposed meeting is the dismissal of Mr. Femi Otedola, the Chairman of FBN, along with Mr. Julius B. Omodayo-Owotuga, who serves as a Non-executive/Deputy Chief Executive of Geregu Power Plc.
The shareholders have raised concerns that the financial institution has faced ongoing turmoil since former Central Bank of Nigeria (CBN) Governor Godwin Emefiele facilitated Otedola's acquisition of a substantial shareholding, which led to his appointment as Chairman of FBN Holdings.
According to the shareholders, Emefiele had invited Dr. Adesola Adeduntan, the former CEO of FirstBank, to his residence in Ikoyi, instructing him to collaborate with Otedola to facilitate his takeover of the bank. Adeduntan complied, which ultimately allowed Otedola to assume a non-Executive role without the necessary security clearance from the Department of State Security (DSS) and the Economic and Financial Crimes Commission (EFCC).
Once Otedola gained control of the bank, his first action was to oust Adeduntan, followed by Tunde Hassan-Odukale, the Chairman of First Bank of Nigeria Limited. He then moved against Tosin Adewuyi, who had ranked first in the CEO selection process conducted by a global recruitment firm, opting instead for Mr. Olusegun Alebiosu, who had placed last in the interview. Mr. Alebiosu has reportedly pledged "absolute loyalty" to Otedola and has permitted another of Otedola's associates, Non-Executive Director Akin Akinfemiwa, to manage the bank's operations.
Shareholders have expressed concerns that under Otedola's leadership as Chairman, along with his personal staff, Omodayo-Owotuga at the Holdco and another staff member at the bank, he has effectively taken complete control of the bank, operating without restraint.
With the recent private placement of N360 billion in shares, there are growing fears among other shareholders that Otedola could gain absolute authority, potentially transforming First Bank into his personal financial resource, devoid of necessary checks, balances, and adherence to corporate governance.
The shareholders argue that Emefiele, who facilitated Otedola's acquisition of the bank, overlooked the fact that Otedola may not have met the fit and proper criteria, given his history of damaging several banks through non-performing loans, which were subsequently sold to AMCON prior to his favorable arrangement under former President Goodluck Jonathan and Godwin Emefiele.
Following the removal of Adeduntan, Executive Director Tosin Adewuyi was next, along with Group Head Folake Ani-Mumuney, who was dismissed for merely executing a board directive to organize a farewell party for the retiring CEO, who had served the bank for nine years.
Additionally, Otedola previously dismissed Ms. Ijeoma Nwogwugwu, a prominent journalist, from her position as a non-executive director of a First Bank subsidiary due to her publication of a critically acclaimed article that he deemed detrimental to his reputation.
This raises a pertinent question: what authority does a non-Executive Chairman of a HoldCo have in terminating the employment of a bank's group head for following the directives of the Managing Director and the Board?
Reports indicate that Otedola has secured a loan ranging from $45 to $50 million from the African Export-Import Bank (Afreximbank), amounting to approximately N90 billion.
“This is to enable him (Otedola) take full control during the proposed N360 billion private placement. But some of the shareholders are saying instead of a private placement for shares of the bank, it should be by right issue or public offer,” a source claimed.
Otedola's inclination towards private placement is perceived as a strategy to assert control and manage the financial institution as if it were his personal property, according to a source who requested anonymity.
FBN Holdings has been embroiled in a dispute regarding the largest single shareholder of the institution.
In its audited financial statements for 2023, First Bank Holdings identified Otedola as the largest shareholder, holding a 9.41 percent stake. Recently, however, Otedola has significantly increased his holdings through the acquisition of additional shares, leaving the precise extent of his stake uncertain.
Data from the Central Securities Clearing System (CSCS), a recognized authority for verifying share ownership, indicates that Barbican Capital, linked to the Oba Otudeko-owned Honeywell Group, is the largest single shareholder with a 15.01 percent stake.
Records maintained by the bank’s registrars, Meristem Registrars & Probate Services Ltd, confirm that Barbican Capital holds 5,386,397,202 shares (5.38 billion) as of May 23, 2024, making it the largest shareholder.
Barbican Capital has initiated legal action against FBN Holdings for inaccurately representing its shareholding in the audited financial report.
Recently, First Bank undertook a significant organizational restructuring, resulting in the dismissal of approximately 100 senior staff members.
Reports suggest that top executives were let go as part of a corporate restructuring initiative aimed at repositioning the bank for 2025, following the appointment of Olusegun Alebiosu as managing director (MD) and chief executive officer (CEO) in June of the previous year.
There are also claims that these departures are part of a deliberate strategy by Otedola to bring in new leadership within the bank.
The actions of the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) in response to the demand for an extraordinary general meeting (EGM) to remove Otedola and halt the private placement of bank shares remain uncertain.