Shareholders Accuse Otudeko of Using Court to Stop FBN Holdings’ AGM

*Mukhtar pleads with former chairman to consider interest of minority shareholders

Shareholders under the aegis of Trusted Shareholders Association of Nigeria (TSAN) have restated their allegation that Chief Oba Otudeko is the mastermind behind the court order barring FBN Holdings Plc from holding its statutory Annual General Meeting (AGM) scheduled for August 15, 2023.

A Federal High Court in Lagos had 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.

But speaking to journalists, Chairman of TSAN, Alhaji Mukhtar Mukhtar, alleged that Otudeko was behind the plot to stop FBN Holdings from conducting its AGM. Mukhtar urged the former chairman of the parent company, FirstBank, to refrain from biting the fingers that fed him.

“With what is going on now, I mean by the court order stopping the AGM, it is the minority shareholders that will suffer,” Mukhtar said. He added, “They are the ones who depend on dividend pay-out to pay rent and plan other things. Many are retired and eagerly look forward to the bank’s AGM. It is the earning from their investments. But now the court is saying you cannot hold the AGM, which approves the dividend payment. What will happen to those shareholders? So, Otudeko should be considerate on this?”

Mukhtar, who had led minority shareholders to protest the move to stop the AGM, also warned Otudeko not to forget that First Bank contributed significantly to the growth of his business empire. He said Otudeko should not, out of self-interest, take actions that would destroy the wealth of many Nigerians, who are investors in FBN Holdings.

Mukhtar said in his 30 years’ experience in the capital market, he had not seen where someone would approach a court to stop a statutory meeting from holding.
According to him, “AGM is a meeting authorised and recognised by the laws of Nigeria. So it is absurd for a group of individuals to go to court asking to stop an AGM and worst still, for any court to grant such an order.

“I can’t understand what the judiciary is turning into. I have never seen where a judge stops a statutory meeting from holding. 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.

“An AGM is a lawful meeting and no judge, who is progressive in mind and wants to uphold the protection of the law, should stop an AGM.”
Insisting that Otudeko was the one behind the move to stop the AGM, Mukhtar stated, “We are very sure that it is Oba Otudeko. He is the one behind this move to stop the AGM. Someone who has benefited immensely from this bank is now trying to destroy it. Otudeko’s business activities enjoyed significant funding from First Bank of Nigeria. He was a director and rose to the position of 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. This is selfish and very bad for you to destroy an institution that has built your business empire.

“And he is having these fears due to the coming of certain investors, who have boosted confidence in the bank.”

Mukhtar said further, “Secondly, he is afraid that if new directors come in, his bad record may be uncovered. 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 a 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.
“Now that the recovery in the bank is being consolidated upon, no one should thwart those efforts.”

The TSAN boss advised the regulators to intervene and stop the current move to scuttle the bank, which he said was capable of plunging the country’s banking sector and capital market into a serious crisis.

Mukhtar 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 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 individuals, who have benefitted from the bank, are 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 this 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 implication, the entire financial system and nation’s economy.”

Similarly, National Coordinator of Independent Shareholders Association of Nigeria (ISAN), Mr. Moses Igbrude, said, “A court order stopping FBN Holdings from holding 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 sheath 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, Mrs. Bisi Bakare of Pragmatic Shareholders Association of Nigeria (PSAN), said, “The court order is not a good move to us as investors and shareholders. My advice to whoever 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, it 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 problems in FBN should not allow a small bank to acquire it.”

In the opinion of Chairman of Ibadan Zone Shareholders Association, Mr. Eric Akinduro, going to court to stop the AGM was not the best for the company and investors.

Akinduro said, “The investors of FBN Holdings had over the years suffered a lot and we would not tolerate anything that would 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 were getting as dividends yearly from FBN, but today is a shadow of itself. We are not happy when our investment value is deteriorating.”