Ecobank To Seize Oba Otudeko’s First Bank Shares Over Lingering 13.5bn Debt

Ecobank is seeking the purchase of shares recently acquired by Nigerian business tycoon Oba Otudeko in FBN Holdings over his lack of payment of his debt to the bank.

BrandNewsDay confirmed that Oba Otudeko and his affiliated companies own the West African financial services group, Ecobank, a total sum of 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.

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These legal actions aimed to recover the companies’ debts to the bank from the businessman. Otudeko had personally guaranteed the loans, resulting in the companies’ indebtedness.

Despite Otudeko and his companies disputing their debts, the Supreme Court affirmed their indebtedness in January of this year. The court’s judgment ordered them to repay all outstanding debts to the bank, along with interest.

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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, claims that instead of repaying the debts, Otudeko took a giant stride to divert his assets and funds through a newly created special purpose vehicle named Barbican Capital Limited.

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.

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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.

According to some sources, Ecobank is attempting to seize the disputed shares.

Leading shareholder of FBN Holdings, Oba Otudeko Vs Otedola

Previously the chairman and leading shareholder of FBN Holdings, Otudeko was removed from his position 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.

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Major shareholders, including Femi 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.

The current board was appointed by the Central Bank of Nigeria (CBN), and concerned shareholders are determined to regain control of the bank.