Ecobank says it initiated a legal action against Honeywell Group Limited, Anchorage Leisures Limited, Siloam Global Services Limited, but Otudeko has defaulted.
Ecobank, a West African financial services group, is pursuing the acquisition of shares recently acquired by Nigerian tycoon, Oba Otudeko in FBN Holdings due to his indebtedness to the bank.
Oba Otudeko and his affiliated companies owe Ecobank over N13.5 billion ($17.1 million).
In 2017, Ecobank Nigeria Limited filed several lawsuits against Otudeko and his companies, including Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, and Honeywell Flour Mills, at the Federal High Court in Lagos.
Also read: Otudeko becomes major shareholder in FBN
These legal actions aimed to recover the companies’ debts to the bank. Otudeko had personally guaranteed the loans, resulting in the companies’ indebtedness.
Despite Otudeko and his companies disputing their debts, the Supreme Court affirmed the indebtedness on January 27, 2023. The court’s judgment ordered them to repay all outstanding debts to the bank, along with interest.
On the same day the letter was issued, FBN Holdings had written the Nigerian Exchange to notify the bourse of acquiring a 13.3 per cent holding in the financial services group by Barbican Capital Limited, an affiliate of Honeywell Group.
A letter from Ecobank’s legal representative to the CEO of FBN Holdings, accuses Oba Otudeko of intentionally diverting his and his debtor companies’ assets to evade debt payment, in defiance of the Supreme Court’s directive.
In the letter, Kunle Ogunba and Associates, Ecobank’s counsel, claim that instead of repaying the debts, Otudeko took actions to divert his assets and funds through a newly created special purpose vehicle named Barbican Capital Limited.
Barbican Capital was registered in Nigeria on March 9, 2023 and has Otudeko Obafemi Adedamola and Oyeleye Foluke as persons with significant control, according to documents at Corporate Affairs Commission (CAC).
Following the Supreme Court judgment, Otudeko used this vehicle to purchase 4,770,269,843 shares of FBN Holdings from various institutional shareholders. The shares were subsequently transferred to at least ten different proxy accounts.
Ecobank’s lawyers have urged FBN Holdings to reject acknowledging the shares as belonging to Otudeko, as doing so would violate the Supreme Court’s judgment.
“Instead of taking urgent steps to repay their indebtedness in line with the mandate of the Supreme Court, it has come to our notice that Dr Oba Otudeko (being the prime mover and alter ego of the debtor companies who personally guaranteed to repay the said debt) has taken active steps to divert his assets/funds and those of the debtor companies,” the lawyers said.
“This he has done by using a company known as Barbican Capital Limited (special purpose vehicle), which was recently and hurriedly incorporated after the judgement of the Supreme Court (specifically on 9th March 2023,” they added.
Sources say that Ecobank is attempting to seize the disputed shares.
Previously the chairman and leading shareholder of FBN Holdings, Otudeko was removed from his positions by the central bank in April 2021.
Nigerian billionaire Femi Otedola became the largest shareholder in the company that same year, with substantial influence on FBN Holdings’ board.
However, Otudeko has once again become the largest shareholder in the bank, setting the stage for a potential battle for control among major shareholders of Nigeria’s oldest bank.
Following Otudeko’s recent acquisition of FBN shares, estimated to represent a 13% stake, he now holds the top shareholder position in the financial services group.
Major shareholders, including Otedola, Mike Adenuga, Oye Hassan-Odukale, and the family of the late tycoon Alao Arisekola, reportedly convened to discuss how to respond to Otudeko’s emergence as the bank’s primary equity holder.
These shareholders are exploring options to swiftly resolve the issues stemming from the share acquisitions and Otudeko’s bid to regain control, potentially securing his representation on FBN Holding’s board.
Mr Otudeko, who chaired the group’s board until a shake-up ended his tenure in April 2021, controls Honeywell Flour Mill. The businessman owns a 75 per cent stake in the company through Siloam Global Services Limited, according to the company’s 2022 earnings report.
The current board was appointed by the Central Bank of Nigeria (CBN), and concerned shareholders are determined to regain control of the bank.
