Explainer: Ownership Battle at Nigeria’s Oldest Bank
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A significant ownership dispute is unfolding at First Bank Holdings, Nigeria’s oldest bank. The controversy centers around who the bank’s largest single shareholder is. According to First Bank’s 2023 audited accounts, Femi Otedola, the bank’s chairman, holds the largest share at 9.41%.
However, data from the Central Securities Clearing System (CSCS) and the bank’s registrar, Meristem Registrars & Probate Services Ltd, identify Barbican Capital, associated with Oba Otudeko’s Honeywell Group, as the largest shareholder with a 15.01% stake.
Why the Discrepancy?
Barbican Capital has taken legal action against First Bank Holdings for incorrectly stating its shareholding in the bank’s audited financial statement. Initially, the unaudited statement had accurately reflected Barbican’s stake, but the audited version did not, leading to the lawsuit. First Bank Holdings has declined to comment publicly on the matter, as the issue is now in court.
Background: How Did This Start?
The roots of this conflict trace back to 2015, when the global oil market downturn hit Nigeria hard, affecting First Bank’s financial health due to a surge in non-performing loans (NPLs). The bank crafted a forbearance plan with the Central Bank of Nigeria (CBN) to stabilize its situation.
In 2021, internal boardroom changes at First Bank triggered further complications. The CBN quickly intervened by dissolving the boards of both First Bank and its parent company, FBN Holdings, citing non-compliance with restructured loans granted to Honeywell Group as a reason for this drastic action.
Why Does It Matter?
The loans to Honeywell Group, which were due for repayment by 2026, were suddenly demanded by the CBN in 2021, creating a significant financial and corporate governance issue. Honeywell quickly repaid the loans, but the CBN’s actions raised concerns about potential bias and external influence on First Bank’s operations.
Current Situation: Verification and Legal Action
A series of meetings and agreements in 2023 and 2024 aimed to resolve these issues, including verifying shareholdings and ensuring fair board representation. However, discrepancies in shareholding records and dissatisfaction with board representation have led to ongoing legal battles, with Honeywell contesting what it views as an unfair reduction in its influence at the bank.
What’s Next?
The outcome of this ownership battle will significantly impact First Bank’s governance and could set a precedent for corporate governance in Nigeria. As the legal process unfolds, the future of First Bank Holdings remains uncertain, with the bank’s autonomy and legacy hanging in the balance.
