Fakoyejo OlalekanFirst Bank of Nigeria (FBN) Holdings has been told to reject Oba Otudeko’s bid to become the company’s largest shareholder, to avoid helping him divert funds, after he bought 4.77 billion shares.
Otudeko informed FBN Holdings, the parent company of deposit money bank, First Bank, on Friday, 7 July, that he bought the shares through Barbican Capital Limited.
On the same day, Ecobank Nigeria Limited’s Receiver Manager, Kunle Ogunba and Associates, wrote to FBN Holdings, disclosing that Otudeko owes Ecobank N13.5 billion.
The Receiver Manager said a Supreme Court ruling affirmed this on 27 January 2023, and the debt as of 31 January 2023, is N13.5 billion.
FBH Holdings was told to reject the shares acquired by Otudeko to forestall the investor from tying up the funds, that could be seized to repay his debt, with FBN Holdings shares.
In the letter, FBN Holdings’ attention was drawn to the several lawsuits against Otudeko and some of the companies linked to him.
“Please be informed that our client instituted several lawsuits against Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell flour Mills PIc, and Dr. Oba Otudeko at the Federal High Court, Lagos, in view of recouping the humongous indebtedness of the highlighted entities to our client. It is particularly noteworthy that Dr. Oba Otudeko personally guaranteed the loan leading to the humongous indebtedness of the prior-mentioned companies,” media reports disclosed on Tuesday.
“Whereas, the prior-mentioned entities had initially disputed their indebtedness to our client and had consequently filed an action in court to that effect, the Supreme Court on the 27th of January affirming the indebtedness of the above persons to our client and further commanded that they must pay all the outstanding debts that have accrued under the loan contract between the parties; being the same debt personally guaranteed by Dr. Oba O t u d e k o, which said indebtedness stood in the sum of N13,507,052,417.99 (Thirteen Billion, Five Hundred and Seven Million, Fifty -Two Thousand, Four Hundred and Seventeen Naira, Ninety-Nine Kobo) as at the 31st day of January 2023 whilst interest continues to accrue on the due debts as legally sanctioned by the Supreme Court of Nigeria, the highest court in the land, aforesaid!” Part of the letter reads.
Ecobank said approving the share acquisition of Otudeko through Barbican Capital Limited will translate to FBN Holdings assisting in the diversion of funds/assets meant for the payment of the debt which has been affirmed by the Supreme Court, same being a flagrant violation of the extant judgment of the Supreme.
“We therefore demand that you respectfully stay/reject/approval/consent/registration/ ratification {howsoever described or in whatsoever manner} of the shares bought by the said Barbican Capital Limited held via the afforested entities, as proceeding with such approval/registration will be tantamount to assisting in the diversion of funds/assets meant for the payment of the debt which has been affirmed by the Supreme Court, same being a flagrant violation of the extant judgment of the Supreme and which has effectively determined the outstanding indebtedness between the Honeywell Group and our client, Ecobank Nigeria Limited,” the Receiver Manager said.
It is shocking and unacceptable that Mr. Oba Otudeko is owing Ecobank billions of naira while trying to take over First Bank. Mr. Otudeko’s behaviour is so unethical that for more than a decade he faced Ecobank in several courts and lost. Ecobank loaned him billions and when it was time to pay up, he refused to pay, and the bank took him to court. The case has gone from the lowest court in the land to the highest court, and Otudeko still lost, but he has taken several steps to dodge payment and his actions has shown that he is recalcitrant and determined not to repay what he owed Ecobank.
The regulatory bodies including the Central Bank of Nigeria and the Security Exchange Commission (SEC) should sanction Oba Otudeko and compel him to pay Ecobank. His new investment in First Bank – to enable him sit on the board of First Bank – should be prevented by the CBN and SEC should act expeditiously to put a hold on all the shares of Honeywell Group Limited, Barbican Capital Limited and other businesses where Otudeko is using proxies including his children to maintain ownership and control. Otudeko engaged in several non Arm’s Length Transactions in order to transfer shares and ownership of some shares and businesses to his children.
I am not sure if there is a Non Arm’s Length Transaction law in Nigeria, but I want to believe that there should be a way that SEC and CBN can work with Ecobank and First Bank to reign in the unethical and suspicious actions of Oba Otudeko. SEC must do this to reassure investors that its rules and regulations will not be trampled upon by criminals and dubious businessmen.