Alleged N5.4bn Shares: Court Fixes October 21 for Hearing of Pending Applications

•Ecobank hints on asking Judge to recuse himself

Wale Igbintade

A Federal High Court, sitting in Lagos yesterday,  fixed October 21 for hearing of all pending applications in a suit filed by an investment firm, Barbican Capital Ltd, against FBN Holdings Plc over alleged alteration of its 5.4 billion shares.

Justice Faji adjourned the suit following an application by counsel to Ecobank Plc, Mr. Kunle Ogunba, seeking to be joined in the suit.

At the proceedings yesterday, Bode Olanipekun appeared for the plaintiff; Mr. Babajide Koku  appeared for the FBN Holdings Plc (1st Defendant/Counter-Claimant); H. O. Afolabi appeared for the Central Bank of Nigeria (CBN), while Mr. Kunle  Ogunba appeared for Ecobank Nigeria Limited (party sought to be joined).

 Addressing the court, counsel to the CBN, H. O. Afolabi, stated that at the last adjourned date, the apex bank was joined as party to the suit.

He further hinted that he has an application for extension of time to regularise their processes. The other parties were not opposed to the said application.

In his submissions, counsel to Ecobank Plc, Ogunba drew court’s attention to his client’s application for joinder.  However, the court was of the view that it wants the present parties to the suit to regularise their processes before hearing the said application.

Consequentially, the 2nd Defendant’s counsel moved his application to regularise his process, which was granted by the court.

Thereafter, Ogunba introduced his application for joinder, noting that the said process has been served on the Plaintiff.

He also informed the court that he has a motion for leave to file a further Affidavit in support of his application for joinder and in strict rebuttal to the Plaintiff’s Counter-Affidavit.

Parties were not opposed to the application; hence, same was moved in terms by Ogunba. The court granted the application as prayed.

Thereafter, Ogunba stated that he intends to file an application for the court to recuse itself from hearing the matter.

Ecobank is alleging that the monies used by Barbican Capital Limited to purchase the FBN Holding shares were allegedly diverted from the sale of  Honeywell Flour Mills shares to Flour Mills of Nigeria Plc, a move which (according to Ecobank) was taken to prevent paying their debts to Ecobank, notwithstanding the judgment of the Supreme Court affirming the said debt in favour of Ecobank.

But, the plaintiff’s counsel, Bode Olanipekun submitted that whereas the party seeking to join served its Further Affidavit on 30th September, 2024 (last working day of September), contending that the issue of recusal was not raised in the application.

The court hinted that it expects the Plaintiff’s counsel to address the court on the issue of recusal, adding that the court would not proceed with the matter until the issue of recusal has been addressed and settled.

Accordingly, Justice Faji adjourned the suit till October 21 for hearing of all pending applications.

The Plaintiff (Barbican Capital Limited) an affiliate company of Honeywell Group Limited had in suit no. FHC/L/CS/ 1172/24, claimed that over the years and at different times, it cumulatively acquired about 5,386,397,202 shares representing 15.1 per cent of FBNH overall share listed on the Nigerian Stock Exchange, NSE.

In the originating summons, Barbican Capital is seeking several reliefs including, “a declaration that the number of shares contained/entered in the defendants register of members/records of members relating to the plaintiff (Barbican), is representative of the number of shares held by the plaintiff in the defendant.

“A declaration that the plaintiff’s shareholding in the defendant stands at 5,386,397,202 (as of 1st July 2024) reflected in the dematerialized records of the Central Securities Clearing System Plc, (CSCS).”

However, FBN Holdings Plc in a  written address in response to the Motion on Notice filed by its counsel, Babajide Koku SAN informed the court that the  plaintiff deliberately concealed the fact of an on-going verification exercise by the Central Bank of Nigeria (CBN) of its alleged significant shareholdings.

The Bank stated that the primary purpose of instituting the suit was to circumvent the verification exercise and the decision taken by the CBN against the Plaintiff.

It stated that on the 7th of July 2023, the Plaintiff in accordance with the regulatory laws and policies notified the defendant (FBN Holdings Plc)

that it had acquired units of shares and therefore held a shareholding amounting to about 4,770.269,843 units of shares. This shareholding was about 13.3% of the Defendant’s shareholding.

It stated that by the CBN’s Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria (issued pursuant to the Central Bank Act of 2007 and Banking and Other Financial Institutions Act 2004), Financial Holding, Companies (including the Defendant) required prior approval to be sought from the apex bank before the purchase of a FHC’s shareholding of five per cent and above. Or, in the event that the share units are purchased on the secondary market, to notify the CBN within 7 days from the date of the purchase to obtain a ‘No Objection’ or approval from the CBN.

The bank added that pursuant to the CBN Guidelines, the FBN Holdings Plc vide a letter dated 10th of July 2023, notified the CBN of the purported new shareholding of the Plaintiff which exceeded the minimum threshold of 5 percent shareholding and therein sought the CBN’s approval.

The CBN responded to the defendant’s letter and requested the plaintiff to produce documents for the verification process of the shareholding.

Sequel to the receipt of the CBN’s letter, the defendant forwarded the same to the plaintiff and recommended that the plaintiff should provide the requested documents relevant to the verification process, but the plaintiff failed, refused and neglected to provide all the requested documents.

Consequently, the CBN vide a letter dated 29th of Jan 2024 informed the defendant that it was only able to verify only 3,110,400.619 units of shares out of the plaintiff’s then 4,770,269,843 billion shareholding due to insufficient documents.

The defendant added that it communicated the verification status to the plaintiff, however the plaintiff failed, refused and or neglected to provide the relevant documents to the CBN till date.