Nnamdi Okonkwo – the Group Managing Director of FBN Holdings, and Alhaji Ahmed Abdullahi the just-appointed Chairman of the holdings are facing possible jail terms over contempt of court.
Tussle over the soul of First Bank appears to be far from abating anytime soon, following the consequences of the supremacy battle between two giant money bags Femi Otedola and Oba Otudeko which continues to gear on.
History Of Leadership Battle in First Bank (Billionaires Turn Bank To Wrestling Ground)
Until the management tsunami in FBN Holdings in 2019 Oba Otudeko was Chairman of the company via his proxy Ibukun Awosika. However, the troubled billionaire was ousted in a properly calculated move believed to be backed by now embattled former Central Bank of Nigeria (CBN) Governor, Godwin Emefiele.
A First Bank insider account revealed what transpired, to ENigeria Newspaper, adding that Otudeko became too powerful and as well allegedly orchestrated some of the troubled loans awarded by First Bank in his days as Chairman of the bank.
A popular scenario was the problematic N75 billion loan facility by First Bank to Honeywell Flour Mills, a company in which Mr. Otudeko owns a majority stake among several other issues. The alleged insider lending said to be beyond the single-obligor limit, particularly for a director, called the bank’s corporate governance capacity to question at the time.
According to the account of Otudeko’s Honeywell Flour Mills in its press statement, the contentious loan was procured with collaterals at over 170% of Forced Sales Value (FSL), and 230% at Open Market Value (OMV), and had been performing from inception in accordance with agreed terms, however, Honeywell’s account contradicts the CBN’s assessment that the First Bank in what was largely considered inside conspiracy failed to perform its lien on Otudeko’s shares in the bank, which were placed as collateral for the loan.
Buttressing further, the CBN in a statement released to the media said, “We further noted that after four years the bank is yet to perfect its lien on the shares of Mr. Oba Otudeko in FBN Holdco which collateralized the restructured credit facilities for Honeywell Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility”. For the records, a lien ensures the creditor (First Bank in this case) obtains the right to the property (Otudeko’s shares) if the borrower (Honeywell Flour Mills) fails to meet its debt repayment obligations.
Additionally going by a rough calculation at the time too, First Bank’s bad loan charges had ballooned by almost four times from N25.942 billion to N119.322 billion between 2014 and 2015.
The CBN then further called in Honeywell Flour Mill’s loan, adding that if the company is unable to pay up, Mr. Otudeko may lose his shares in the bank and it went ahead to eventually axe the Otudeko-led leadership of First Bank in 2019 when it dismissed the boards of the bank and its holding company, FBN Holdings, in a dramatic move that came a day after the bank appointed a new managing director. The regulator however reinstated the then forcefully removed former MD of the bank, Adesola Adeduntan.
The CBN’s intervention in the crisis saved First Bank a Systemic Important Bank (SIB) from a total implosion, and in achieving this, the apex bank wrote off over N150 billion in bad loans after shareholders failed to recapitalize the bank amid capital adequacy concerns.
Subsequently, the temporary leadership vacuum in First Bank following the CBN’s hammer, sending Otudeko packing ignited a battle between Femi Otedola and Hassan Odukale over control of the bank. Consequently, in 2021, Otedola emerged victorious having become the single largest shareholder in First Bank after acquiring about 5.07 percent stake in the bank.
In what has since been described by industry watchers as a commando move, Oba Otudeko made a systematic and strategic comeback in June 2023 after acquiring the largest share in First Bank in a cross-deal valued at N87. 8 billion.
The shares which Otudeko bought at N19 per unit are said to be the largest volume of First Bank shares traded in a single day since 2012 when the stock exchange started publishing data, according to a report by Arise News.
The move was considered to be too good to be true, as shareholders were thrown to discomfort over the validity of the trades considering that no single shareholder hitherto officially owned as many shares, and just like World War II, the battle between Otedola and Otudeko ensued.
ENigeria Newspaper reports that these series of battles between billionaire shareholders of First Bank has rubbed off negatively on innocent shareholders who decry their losses after several billion went down the drain following the recent collapse of FBN shares in the stock market.
Meanwhile, data obtained by ENigeria Newspaper indicates that the stock market performance of FBN Holdings has not been encouraging lately. This is as the company’s share fell to N19.80 kobo, from N21.5 kobo per share.
It was also learnt that the total market valuation of FBN Holdings fell to N710.72 billion from N771.74 billion earlier reported
Market expert’s observation revealed that the drop in FBN Holdings’ share value indicates a decline in the confidence of the stock market investors in FBN Holdings, due to the blurry future caused by the disagreement between the largest and other majority shareholders, as well as Otudeko’s court battle with Ecobank.
