…Call out SEC, and CBN for keeping mum
Monday’s protest by some shareholders of FBN Holdings over a false and contorted court order stopping the company’s annual general meeting originally scheduled for August 15, is an eye-opener to the festering stalemate on the company’s 2023 annual general meeting. For how long will the regulatory authorities in the capital market fold their arms in the face of the weighty allegations levelled by the aggrieved shareholders, Festus Akanbi THISDAY NEWSPAPER asks
From its half-year 2023 results, it is crystally clear that the current board and management of FBN Holdings Plc have successfully positioned the business conglomerate on the path of sustainable growth.
This is because, in defiance of the prevailing headwinds, which are making some other companies gasp for breath, FBN Holdings was able to post an impressive 231 per cent increase in its half-year profits for 2023 to N187.24bn compared to N56.602bn recorded at the end of June 2022.
The company which was listed on the Nigerian Stock Exchange on November 26th, 2012, closed at N17.70 per unit of its share on Wednesday, August 9. FBN Holdings is the most traded stock on the Nigerian Stock Exchange over the past three months (May 9 – August 9, 2023) and the company has traded a total volume of 6.86 billion shares—in 16,502 deals—valued at N125 billion over the period, with an average of 109 million traded shares per session.
Power Tussle
Analysts however fear that this positive trajectory could pale to insignificance if the festering jostling for the soul of the company is not halted by the relevant regulatory bodies.
What began as a looming crisis boiled over last week when a group of shareholders of the company staged a protest at the headquarters of the company in Marina, Lagos, to kick against a court order suspending the company’s 11th annual general meeting where key decisions, including plans to raise fresh capital and to appoint new directors, were scheduled for discussion.
Other businesses slated for discussion at the meeting included the move to increase the group’s issued share capital from N17.95 billion to N22.43 billion through the creation of an additional 8.97 billion ordinary shares of 50 kobo each, the new capital raising and the election of directors.
FBNH is seeking shareholders’ approval for the election of Otedola as a non-executive director of the group. Otedola was appointed by the board as a non-executive director on July 09, 2023, and the resolution on his appointment is said to be a joker by the shareholders to frustrate the return of Otudeko as the company’s chairman.
Meanwhile, a petition by Olusegun Samuel Onagoruwa upon which the order was obtained in suit No: FHC/L/CP/1271/2022, and addressed to Nnamdi Okonkwo, FBN Holdings Chairman has caused a stalemate over the proposed AGM as it refrained the board of the bank from proceeding with the meeting.
However, FBN Holdings Plc have denied receiving a court order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023, and says the AGM would go as scheduled.
The company disclosed this via an official statement signed by Company Secretary, Adewale Arogundade, which was sent to Nigeria Exchange Limited.
According to the company, they haven’t been served any court order to stop the AGM from holding.
The statement reads, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.”
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.”
The company also noted that if there was any restraining order to stop the AGM from holding, that they would have informed regulators and the investing public. They assured Shareholders that the AGM would hold on August 15, 2023.
Shareholders’ Revolt
However, speaking during the protest at the company’s head office in Lagos last week, the Chairman of the Trusted Shareholders Association of Nigeria, Alhaji Mukhtar Mukhtar, who spoke on behalf of other minority shareholders noted that shareholders were not happy that some individuals were trying to hold the financial institution to ransom.
He alleged that there were strong indications that the plot to stop the AGM was from the former Chairman of FBNH, Oba Otudeko, adding that the resolutions to raise more capital for the bank and to appoint directors to the board were met with stiff disapproval as the resolutions would cut the control the former chairman has on the bank.
The shareholders activist alleged further that, “A greater majority of FBN Holdings’ shareholders want the annual general meeting to hold and all the resolutions to be considered but unfortunately, some individuals approached the court and are threatening the board and the directors of First Bank from holding the AGM and for considering those resolutions.
“I think this is very unfortunate and unacceptable. That is why we said the regulators should come in. There are some suspicions and allegations that Oba Otudeko is the one that is fuelling this crisis and I don’t think it is proper for a person of Oba Otudeko’s standing to be involved in this kind of unsavoury behaviour, blocking the progress of an institution which have benefitted him and still benefitting him.”
In what looked like a save-our-soul plea, Muhktar said, ”The shareholders are begging you, please leave First Bank alone, allow First Bank to progress, allow First Bank to go ahead. Other banks are already catching up. They are moving on. So continuing to block First Bank of Nigeria from taking steps that are going to make the bank stronger, increase its share capital and then increase the shareholders’ fund is not a good step.”
While noting that several petitions had been written to regulatory bodies, the shareholders, therefore, called on the regulatory bodies in the nation’s capital market especially SEC to take action and look into the crisis.
“We will like the regulators, the CBN and SEC to come in. They should not be complacent to all these kinds of abuses by some big shareholders of institutions.
“We will continue to protest. We have written petitions to the regulators and we will continue to write more petitions. The regulators should come in. They cannot continue in their complacent behaviour in the face of abuse. They must ignite certain regulatory powers, they can suspend the shares of those people who attempt to hold this bank to ransom.
“We cannot allow this bank to die therefore, the regulatory authorities must act now because they just cannot be quiet,” he said.
He alleged that about N1.7 trillion was mismanaged under the leadership of the former chairman of the institution and that the bank had to write off the amount in the last six years, explaining that it was for that reason the CBN sacked him and his team.
He said, “It is painful to see individuals, who have benefited from the bank, who had made the bank write off N1.7 trillion bad loans in their book now turning round to block the progress of the bank, I think it is unfortunate.”
Earlier this year, Oba Otudeko’s Honeywell Group reportedly bought the largest shares of First Bank of Nigeria Holdings Plc in a cross deal worth N87.8 billion.
The trade has ratcheted up allegations over its validity considering that no single shareholder hitherto officially owned as many shares.
In 2021, billionaire businessman, Femi Otedola became the company’s single largest shareholder after a tussle with Hassan Odukale who was also vying for control of the bank after a leadership gap emerged from Otudeko’s exit.
SEC, CBN Keeps Mum
Analysts said the controversy trailing the recent share acquisition of Honeywell and the ensuing scramble for control of FBN Holdings Plc would have been avoided had SEC, the CBN, and the stock exchange stepped in to clarify the share acquisition. They contended that the silence of these regulators is fuelling the current crisis.
Capital market watchers wondered why the industry’s regulators have decided to keep mum while the crisis in the company festers.
When THISDAY sought the position of SEC, its head of media relations, Mrs. Joy Onoja Otubor disclosed that the commission was still investigating the share sale, promising that the result would soon be made available.
A source explained that the CBN may not want to talk for now as an interested party in the matter, saying the onus lies on SEC to wade into the matter very urgently.
The source explained that stalling the company’s annual general meeting, where key issues were supposed to be thrashed is enough for SEC to wake up from its slumber.
