Shareholders under the auspice of Trusted Shareholders Association of Nigeria (TSAN) have alleged that the former chairman of the institution instigated a court order that stopped FBN Holdings from holding its Annual General Meeting (AGM) scheduled to hold on August 15, 2023.
Speaking to journalists, the Chairman of TSAN, Muktar Muktar, alleged that Otudeko is behind the plot to stop FBN Holdings from conducting its AGM, urging Otudeko to refrain from ‘biting the fingers that fed him.’
A Federal High Court in Lagos issued an ex parte order restraining FBN Holdings from holding its AGM pending the hearing and determination of the substantive matter filed before the court by three aggrieved shareholders of the bank.
Muktar, who had led minority shareholders to protest the move to stop the AGM, also advised Otudeko not to forget that First Bank contributed significantly to the growth of his business empire and should not take actions that would destroy the wealth of many Nigerians who are investors in FBN Holdings.
According to Muktar, in his 30 years of experience in the capital market, he has not seen where someone will approach a court to stop a statutory meeting from holding.
“AGM is a meeting authorised and recognised by the laws of the Nigeria. So it is absurd for a group of individuals to go to court asking to stop an AGM. I can give you several instances when, in the past, such matters were brought before the courts and judges dismissed them because you cannot stop a law from working.
“We are very sure that it is Oba Otudeko. He is the one behind this move to stop the AGM. Otudeko’s business activities enjoyed significant funding from First Bank of Nigeria. He was a director and rose to the position of a Chairman in the past. Only recently he bought into the bank and he is probably afraid that if the resolution to raise fresh capital is passed at the AGM, his holdings would be diluted. He is having these fears due to the coming of certain investors who have boosted confidence in the bank.
“But to us, most shareholders, these fears are unfounded. I don’t see any reason why any individual should be afraid of resolutions that will enhance the performance of the bank by bringing more money to the bank. As you know, the fabric of banking business is capital. Any bank that does not have enough capital to give out loans, finance businesses will not do well in the face of the strong competition.
“First Bank is bank that has systemic value in the Nigerian economy and we should not play with it at all. That was why the Central Bank of Nigeria (CBN) intervened in the bank over a year ago when the regulator noticed some anomalies and you can see that the intervention has yielded good fruits,” he said.
\Now that the recovery in the bank is being consolidated upon, no one should thwart those efforts,” Muktar said.
The TSAN boss advised the regulators to intervene and stop the move, which he said is capable of plunging the nation’s banking sector and capital market into serious crisis.
He said: “The regulators should come up strongly and make it clear that no court can stop the statutory meeting of companies and passage of resolutions in such meetings. Secondly, I will ask the management of FBN Holdings to go ahead with their meeting. If I am the MD of FBN Holdings, I will go ahead and conduct my meeting because in Nigeria people can abuse processes and I am very sure that some underhand dealings in all of these. And my advice to shareholders is that they should always consider the implications of any step they are taking. They should seek knowledge to understand the laws and procedures and statutes of the capital market. It is very clear that conducting an AGM is a statutory meeting backed by law and nobody can stop the law from working.
I don’t know why should individuals who have benefitted from bank try to stop its progress. It is normal for directors to come in and go out. There is nothing political there. Once they complete their tenure, they go and others come. Why should some directors come through the back door and try to block others from coming by going to court to stop a statutory meeting that is meant for the progress of the bank and Nigeria’s economy at large. Things like these should not be happening in the capital market because they don’t give investors confidence and I believe regulators should stand up and stop this move that is capable of throwing First Bank into more trouble and by implications, the entire financial system and nation’s economy,” he said.
Speaking in the same, the National Coordinator of Independent Shareholders Association of Nigeria (ISAN), Mr. Moses Igbrude, said: “A court order stopping FBN Holdings from hold its statutory AGM is bad because we are not aware of any operational issues or infringement within the company. But if it is as a result of major shareholder contenders, my appeal to them is to sheathe their swords and work for the unity of the bank by putting their resources and expertise in the service of the bank.”
In her reaction to the development, Mrs. Bisi Bakare of Pragmatic Shareholders Association of Nigeria(PSAN), said: “The court order is not a good move to us as an investor/shareholders. My advice to whoever that is behind it or those that are planning should stop it because First Bank is more important than any individual. If anything happens to First Bank is the whole Nigeria that will be affected. What is going to happen to their employees and other stakeholders. The former director that is creating problem in FBN should not allow small bank to acquire it.”
In the opinion of the Chairman of Ibadan Zone Shareholders Association, Mr. Eric Akinduro, going to court to stop AGM now is not the best for the company and investors.
“The investors of FBN Holdings had over the years suffered a lot and we would not tolerate anything that will further endanger our investments. Looking at the company where it is today, we are not happy but we believe things are getting better particularly when you consider the second quarter result. So, the best thing is for the company to move forward. The idea of going to court should not arise now. The proposed agenda for the AGM is a good step to move the bank forward. If there is any interest somewhere this could be resolved in line with good corporate governance rather than jeopardising our investments. Many of our members in the past know how much we are getting on dividend yearly from FBN but today is a shadow if itself. We are not happy when our investment value is deteriorating,” Akinduro said.