A group of shareholders of the First Bank of Nigeria (FBN) have cried out over issues that need the attention of the regulators of the country’s financial sector in order to safeguard the future of the Bank.
The main issues causing disharmony in the bank are power tussle to control the bank by diverse interests and cases of alleged fraud for which two accused persons who are on the run to escape investigation and justice. They are a former Chairman of the bank’s Holding Company and one of its staff.
While the Economic and Financial Crimes Commission (EFCC) has filed a Court case against the former Chairman and three others over ₦30 billion improper loans, the FBN management has reported the matter of its staff who allegedly diverted ₦40 billion by applying his digital skills dubiously to the Nigerian Police for investigation.
The group of shareholders who said they control ten per cent of the bank’s total shares, some points above 9.14 per cent owned by the Chairman of the FBN Holding Company, Mr. Femi Odetola. They alleged that Odetola was exercising an overbearing Influence on the bank. They see this as detrimental to their interests.
Top on the aggrieved shareholders concerns was that the Chairman “has turned the bank into a personal enterprise, appointing loyalists to key positions and allegedly pushing for a private placement of ₦360 billion shares.”
They presumed, perhaps rightly, that private placement instead of a rights issue or public offer, could be a ploy to deepen the concentration of shares in his favour, thus giving him near-absolute control on the affairs of Nigeria’s oldest financial institution.
The concerned shareholders want the Securities and Exchange Commission (SEC) the Central Bank of Nigeria (CBN) and perhaps the Nigeria Deposit Insurance Corporation (NDIC) to step up their oversight responsibility and intervene to end the alleged corporate breaches and undue influence in the management of the bank by the Chairman.
The shareholders recourse to appealing to the Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation (NDIC) and the Security and Exchange Commisdion (SEC) to intervene is because the trio are bounded by their mandates to closely scrutinise activities in all types of banking institutions in Nigeria. This is to ensure that such institutions operate within the rules and regulations that safeguard the vital financial services sector.
They also invoked Section 214 (1) of the Companies and Allied Matters Act (CAMA) 2020 which legally supported their call for holding an Extraordinary Annual General Meeting to discuss possible changes of leadership in the huge financial services Holding Company.
Section 214 (1) states that, “Subject to the provisions of this Act, an extraordinary general meeting of a company may be called by (a) the directors; or (b) any member or members holding not less than 10% of the paid-up share capital of the company.”
To this end, the CBN, SEC and NDIC ought to be actively involved in amicably settling the apparent board room tussle, pursuing the case of the staff of the Bank who allegedly diverted ₦40 billion from the Bank; and the alleged ₦30 billion fraudulent loans of its former Chairman, Oba Otudeko and three others to their logical conclusions.
The Nigerian public would like to know what the CBN, SEC and NDIC are doing regarding the three issues. The awareness of what the regulators are doing on the three matters will shore up and strengthen the confidence of investors and the general public that they are up to their vital roles of keeping the financial services sector safe, vibrant and trustworthy.
The CBN, SEC and NDIC should resolve the Boardroom tussle then dig beyond the ₦30 billion and ₦40 billion alleged fraudulent cases as there could be more serious cases of fraud which may put the future of the FBN at risk.
Salisu Na’inna was Director of Information in the Federal Ministry of Finance.