Tony Elumelu, the chairman of the United Bank for Africa (UBA), has increased his ownership stake in the financial institution to tighten his control over the firm.
Elumelu increased his controlling stake in UBA to 7.18 per cent as at the end of May 25, from the 6.96 per cent ownership stake he held at the end of last year.
The billionaire’s (in naira) ownership stake rose after he acquired 76.76 million shares so far this year at the cost of N633.14 million.
His most recent acquisition came on May 25 when he purchased 11.83 million shares in the Nigerian stock market, valued at N103.16 million.
Elumelu’s total shares held in UBA have increased to 2.45 billion as of May 25, bringing his total investments in the commercial bank to N22.85 billion.
The investment banker previously held 2.38 billion shares at the end of December 2022, according to the financial statement of UBA. This was worth N18.09 billion at the time.
Why has Elumelu been acquiring UBA shares?
Elumelu has been acquiring shares in UBA to tighten his control over the commercial bank since Femi Otedola, a billionaire (in naira) and owner of Geregu Power, revealed that the UBA chairman took over his investments in the lender.
Prior to the revelation, Otedola had tried to overtake Elumelu as the majority shareholder of Transnational Corporation (Transcorp) Plc in April 2023.
Otedola accused Elumelu of betraying his friendship by taking over his shares in UBA when he was bankrupt in 2008 and also reportedly acquired Otedola’s shares in Transcorp in a deceitful manner.
“In 2005, while Tony was the Managing Director of Standard Trust Bank he approached me to get funds to acquire UBA. I enthusiastically gave him $20 million, which was N2 billion at that time to buy the necessary shares in UBA for the acquisition.
“After a short period of time, the share price moved up and I decided it was a good moment to sell and get out of the bank. However, Tony appealed to me to hold on to the shares as he was convinced that there were future prospects – so I kept the shares.
“I became Chairman of Transcorp Hotel in 2007 with a shareholding of 5% and unknowingly Tony gradually started buying shares quietly.
“By the following year in 2008, I went bankrupt in Nigeria. Tony proceeded to take my shares in UBA to service the interest on my loans and he also took over my shares in Africa Finance Corporation, where I was the largest shareholder,” Otedola said.
Elumelu is yet to publicly address the allegations from Otedola, instead, he has been increasing his stake in UBA, which has been described as a move to prevent the reoccurrence of the powerplay between him and Otedola in April for the control of Transcorp.
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