Ecobank Urges First Bank to Reject Oba Otudeko's 4.7bn Shares Acquisition
- Ecobank Nigeria Limited has called on FBN Holdings to disapprove Oba Otudeko's massive share purchase in First Bank Nigeria Limited
- Oba Otudeko, who recently made a 4.7 billion shares acquisition in First Bank worth N87.8 billion, is being accused by Ecobank of legal infringement
- The bank claims that Otudeko has an obligation to repay an outstanding debt owed it per the directive of the Supreme Court
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Ecobank Nigeria Limited has issued a written communication to FBN Holdings Plc, the parent company of First Bank of Nigeria Limited, requesting a temporary suspension of proceedings concerning the acquisition of 4.77 billion shares by Dr Oba Otudeko, Chairman of Honeywell Group.
It is worth noting that last Thursday, Honeywell Group, led by Oba Otudeko, made a substantial purchase of 4,770,269,843 company shares through a cross-deal, amounting to N87.8 billion.
Source: UGC
This transaction stands out as the largest volume of First Bank shares traded in a single day since 2012 when the stock exchange began publishing data.
Acquired at N19 per unit, the shares contribute to Otudeko's overall ownership, reaching 14% of the bank's total market value.
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Ecobank accuses Otudeko of diverting assets
As per the disclosed letter, the legal dispute between Otudeko and the bank revolves around the objective of recovering the outstanding debts owed by Otudeko and his business entities.
In a correspondence dated July 7, the legal counsel for the bank, Kunle Ogunba & Associates, expressed concerns regarding the indebtedness of the business magnate and his affiliated entities.
According to the letter signed by Oludare Amusan, the Principal Partner of the law firm, the bank highlighted that the total amount owed by the magnate through his affiliated entities was N13.5 billion.
To address this issue, the bank has initiated several lawsuits against Honey Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell Flour Mills Plc, and Oba Otudeko at the Federal High Court in Lagos.
The bank's legal representatives claim that instead of promptly fulfilling their obligation to repay the outstanding debt by the directive of the supreme court, Otudeko, a successful businessman, has undertaken actions to redirect his assets/funds through the utilisation of a company named Barbican Capital Limited, functioning as a specific-purpose vehicle.
Ecobank warns FBN Holdings of Supreme Court's judgment against Otudeko
The law firm asserted that there is undeniable evidence supporting the claim that Otudeko's actions are specifically intended to redirect the assets of himself and the Honeywell Group of Companies through Barbican Capital Limited.
These actions appear to obstruct the execution of the Supreme Court's judgment against Otudeko and the Honeywell companies, which aims to recover the acknowledged debt owed to Ecobank.
The letter added that:
We, therefore, demand that you respectfully stay/reject the 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.
Furthermore, the letter requested that comprehensive information regarding the above transaction is furnished within the next seven days.
It emphasised that, as a responsible corporate entity, FBN Holdings should refrain from engaging in any activities that could endorse the infringement of a supreme court verdict.
Oba Otudeko takes over First Bank from Otedola
In related news, Legit.ng reported that Oba Otudeko's Honeywell Group officially informed the Securities and Exchange Commission (SEC) about its recent acquisition of nearly five billion shares in First Bank of Nigeria.
The notification was also conveyed to FBN Holdings through a subsidiary of Honeywell Group, Barbican Capital Limited.
A statement published on Honeywell's website confirmed that Barbican Capital Limited, a sister company, has acquired 4,770,269,843 shares of FBN.
While there have been speculations, multiple sources identified Honeywell Group as the purchaser of the 4.7 billion shares of First Bank of Nigeria Holdings, which took place in a cross-deal on Thursday, July 6, 2023.
Source: Legit.ng
