You are currently viewing The Game of Thrones at First Bank, by Ijeoma Nwogwugwu
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Billionaire businessman, Femi Otedola, must be excreting bricks. In recent weeks, the often-ebullient businessman has told anyone who cares to listen that he is about to emerge Chairman of FBN Holdings Plc (FBN Holdco) – one of Africa’s largest diversified financial services groups and parent of First Bank of Nigeria Limited, the country’s oldest lender. Otedola, from all indications, was recently nominated a Non-executive Director of FBN Holdco, subject to the approval of the Central Bank of Nigeria (CBN), as is always the case with all financial institutions regulated by the banking system regulator. His hope was that after his nomination is approved by the CBN, at the next annual general meeting of FBN Holdco slated for August 15, 2023, other shareholders/directors of the group will elect him chairman. It remains uncertain how Otedola intends to be elected chairman, given that the current Holdco chairman, Adamu Abdullahi, is an appointee of the Central Bank, albeit on an interim basis.

However, by letting more than a few people know of his heart’s desire to become the next chairman of FBN Holdco, Otedola inadvertently stirred up the hornet’s nest. Suddenly, Otedola finds himself in direct confrontation with the former Chairman of FBN Holdco and industry titan, Oba Otudeko, who two years ago was sacked from the group’s board by the now-suspended Governor of the CBN, Godwin Emefiele. The impending head-on collision was triggered last Thursday when Otudeko, in a move that left the capital market gasping at the magnitude of the transaction, acquired 4,770,269,843 shares of the company’s issued share capital of 35,895,292,791. The record trades valued at N87.8 billion were moved from 26 nominee and trustee accounts to Barbican Capital Limited, an affiliate of the Otudeko-owned Honeywell Group, translating to 13.3% of the share capital of FBN Holdco.

If we are to add the 13.3% to the previously disclosed interests held by Honeywell Group Limited’s affiliates, amounting to about 1.5%, this will bring Otudeko’s aggregate shareholding in the financial services group to about 15%, making him the undisputed single largest shareholder of the group. It further raises the question as to if there are other shares that are held by the nominee or trustee accounts that are yet to be declared by the Honeywell Group or its affiliates.

What was even more telling about the share acquisition was that the shares held by Barbican Capital may have been shielded from any claim against a company formerly owned by Otudeko, Honeywell Flour Mills Plc and two other sister companies, which have been in a protracted dispute with EcoBank Plc over a N5.5 billion loan. On January 27, 2023, the Supreme Court upheld an earlier judgment of the Court of Appeal against Honeywell Flour and the two companies in a dispute with Ecobank over the said loan. Since the Supreme Court ruling, lawyers acting on behalf of Ecobank have filed bankruptcy proceedings against Otudeko at a Federal High Court, Lagos. Barely two weeks ago, the same court granted leave to Ecobank to join Otudeko, Honeywell Group and Flour Mills of Nigeria Plc which acquired Honeywell Flour Plc in an N82 billion deal last year, as additional defendants to the counterclaim filed by the bank, seeking to recover monies based on the judgment delivered by the Supreme Court last January.

However, Barbican Capital, which was incorporated on March 9, 2023, listed two of Otudeko’s children, Foluke Oyeleye and Obafemi Adedamola Otudeko (Jr.) as having controlling interests in Barbican, rendering it difficult for Ecobank to go after the company and/or its assets. In any case, Honeywell’s lawyers may very well argue that the disputed Ecobank transaction with Honeywell Flour Mills and two other companies is an unrelated transaction to Barbican Capital’s acquisition of FBN Holdco shares.

But let’s dial back a bit. Prior to the Supreme Court judgment against Honeywell Flour and Barbican Capital’s 13.3% acquisition of FBN Holco, not much had been heard of Otudeko, save for the sale of Honeywell Group’s 71.69% stake in Honeywell Flour Mills and First Bank’s 5.06% stake also held in Honeywell Flour Mills. As many market analysts put it, he was in hibernation for over two years. Before his stewardship at the helm of the Holdco, he had sat on several other corporate boards, including that of First Bank of Nigeria Plc for 12 years and retired as its chairman in 2010. At the end of his stint, Otudeko was appointed pioneer chairman of FBN Holdco after First Bank and its subsidiaries adopted a holding company structure. He held sway at FBN Holdco until he was ousted by Emefiele in April 2021.

Emefiele was forced to remove him after Otudeko and the Chairman of First Bank at the time, Mrs Ibukun Awosika, refused to heed his directive that Mr Adesola Adeduntan be reinstated as Managing Director/CEO of First Bank. About three days before Otudeko and Awosika were sacked, FBN Holdco had held its annual general meeting in Lagos, during which Adeduntan was re-elected as a director of the holding company, a position reserved for the MD/CEO of the bank. But barely 24 hours after his re-election at the AGM, at a board meeting of First Bank, Adeduntan, with eight months left to the end of his tenure, was retired as MD/CEO of First Bank and his deputy, Gbenga Shobo, announced as his replacement.

Awosika with the backing of Otudeko was believed to have terminated Adedutan’s appointment because of a letter she received from the CBN stating that First Bank had not complied with regulatory directives to divest of its interest in Honeywell Flour Mills, despite several reminders by the Central Bank. The CBN also stated in the letter that it was giving the bank 48 hours to ensure Honeywell repays its obligation to it, failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank. It further instructed the bank to divest of its holdings in Bharti Airtel Nigeria Ltd and Honeywell Flour Mills within 90 days. These unsecured insider loans to the tune of N75 billion were all related to Otudeko. It is not understood why the 48 ultimatum was issued by the CBN, as sources within First Bank later revealed that the loans were performing and had been restructured with a repayment plan till 2026.


In addition to the letter from CBN, it was later revealed that the once convivial relationship that had existed between Adeduntan and Otudeko, who was instrumental to the former’s appoint as MD/CEO five years earlier, had gotten frosty over certain disagreements between the then Holdco chairman and bank MD. There were also mounting concerns among non-executive directors of the group over the liquidity backstop that First Bank had been providing since 2016 to Heritage Bank due to the latter’s liquidity constraints, impaired shareholders’ funds and high loan impairment. A liquidity backstop provides insurance, usually by way of cash, against liquidity risks and helps stabilise financial markets and institutions by mitigating runs.

Without going into further details why Heritage was in dire straits, it is understood that the backstop was sanctioned by the CBN. However, the position taken by some non-executive directors including Otudeko at the Holdco level that First Bank should reduce its credit exposure to Heritage Bank in the unlikely event of a default, did not sit down well with Central Bank officials. As of December 31, 2022, First Bank’s backstop to Heritage was put at N451 billion. If Heritage is unable to repay the amount, it will erode almost half of FBN Group’s reported shareholders’ funds of about N1 trillion in Q1 2023 and completely wipe out its retained earnings of N430 billion.

Yet, even as Otudeko and Awosika moved against Adeduntan, some shareholders/directors of the holding company and bank, led by Oye Hassan-Odukale, pleaded with Otudeko to rescind the retirement of the bank MD, arguing that it was not in the best interest of the bank and the financial services group. However, Otudeko was said to have remained adamant on the grounds that a company had a right to hire and fire its employee before the contracted date if it is done based on the contract terms. Otudeko, a bank source said, was also of the view that even if FBN Holdco was under forbearance, it had not been taken over by the CBN, its financial accounts, like other banks, were still signed by the Central Bank and by April 2021 was already on the mend, so its shareholders and directors still had a say on who to employ and fire.  

When Emefiele heard of the sacking, nonetheless, he tried repeatedly to reach out to Otudeko and Awosika to reverse their decision. However, the CBN governor was later to explain that they made themselves unavailable. Subsequently, an angry Emefiele, with the consent of former President Muhammadu Buhari, struck. On Friday, April 30, 2021, he sacked the Boards of Directors of FBN Holdings and First Bank and announced new directors to both boards. The CBN governor also reinstated Adeduntan and reversed Shobo’s promotion to the position of MD/CEO. Effectively, in one fell swoop, Emefiele ended Otudeko’s stint as a director of First Bank and the holding company for over two decades.    

Giving reasons for the decision, the CBN governor said Adeduntan’s removal was done without due consultations with the regulator, especially given the systemic importance of First Bank. Among other reasons, Emefiele added that the decision to sack both boards was premised on the fact that the bank had been under regulatory forbearance since 2016, arising from bad credit decisions, inadequate corporate governance, as well as a high non-performing loan (NPL) ratio and capital adequacy ratio that had breached acceptable prudential standards for a bank its size. Between 2016 and 2020, First Bank had recorded a total loan impairment of over N565 billion. As of the financial year ending December 31, 2022, total loan impairment charges had risen to N1.2 trillion – an amount considered by market analysts as a massive erosion of wealth. 

To be fair, whilst Otudeko as chairman cannot completely absolve himself of First Bank’s woes, questionable credit risk management pre-2016, and the insider loans he had taken from the bank which exceeded regulatory limits for shareholders and directors, anyone with a knowledge of the bank knows that much of the blame should be placed mainly on Bisi Onasanya, MD/CEO of First Bank between June 2009 and December 2015. At the end of Onasanya’s tenure, First Bank had been so badly mismanaged that a former executive director of the bank and later Minister of State for Finance, Remi Babalola, sent a stinker via WhatsApp to the departing chief executive and copied other directors, accusing him of mismanaging First Bank and concealing several infractions under his watch from the board. However, it must be added that a major non-performing loan of N99 billion, later sold to the Asset Management Corporation of Nigeria, was granted by First Bank when it was led by Sanusi Lamido Sanusi who later became CBN governor and Emir of Kano. But I digress.


With Otudeko’s ouster, this paved the way for Otedola, an unapologetic corporate raider, to swoop down on the shares of FBN Holdings, increasing his stake first to 5.07%, then to 7.57%, and to about 9% as of last Friday. With his emergence as the single largest shareholder in the Holdco by December 2021, Otedola was able to nominate proxies as directors to the boards of the Holdco, First Bank and one or two other subsidiaries of the group to represent his interest. Now, there is no certainty when he decided to stamp his imprimatur on his interest in the Holdco by emerging its chairman, but it is bemusing how Otedola, a self-styled prophet who claims he can see tomorrow and predict business and political outcomes, did not see Otudeko coming. Indeed, I may be right in thinking that Otudeko would not have come in from the cold if he did not have the tacit support of some higher ups in government and if he was not certain that Emefiele was no longer in the picture.  

But that is not to say that Otedola should ever be underestimated. By all measures, he hardly ever loses out in anything that he sets out to achieve. Unlike other business moguls of his standing, he has considerable time on his hands to plot and be very calculating in everything that he does, even when sending out something as seemingly flippant as recorded felicitations from his friends to all his WhatsApp contacts, a whole seven months after his 60th birthday. Anyone who wants to bet against Femi, should be ready to part with the shirt on his back. Nor should anyone be surprised if the share price of FBN Holdings continue to rise as he attempts to regain the bragging rights of single largest shareholder of the group. If he can help it, he’s not one to play second fiddle.


Already, with Otudeko’s disclosure indicating that he has the highest stake in FBN Holdco, Otedola has gone into overdrive to consolidate his control of the group, which he had taken for granted was just within his grasp. At the weekend, an online business news website claimed in an obviously planted story that some significant shareholders with a combined interest of 28% in the Holdco, intend to join forces to block Otudeko from regaining control of the company in whatever capacity. Furthermore, a news report in THISDAY on Sunday, quoted multiple sources as stating that some shareholders of FBN Holdco were slated to meet yesterday to decide on a quick resolution of all the issues thrown up by the slew of share acquisitions and Otudeko’s comeback bid.

But if all the parties were to set aside needless emotions and keep their egos in check, there is really no need to enter panic mode. For one, one of the reasons given by Emefiele for Otudeko’s removal from the board of the Holdco has been discharged, as the former chairman’s outstanding loans of N75 billion were repaid in full shortly after the completion of the sale of Honeywell Flour Mills to Flour Mills of Nigeria. This is a fact both First Bank and CBN are acutely aware of.

Lennox Mall

Two, it is doubtful if Otudeko, a seasoned boardroom player, is under any illusion that he can be reappointed a director of the Holdco or any of its subsidiaries. However, he is within his rights to have representation on the Holdco and on any of its subsidiaries and ensure that his proxies can speak for his investment in the group, just as is the case with other significant shareholders. When the CBN appointed new directors to FBN Holdco and First Bank after it sacked the previous boards in 2021, it appointed Remi Lasaki as a proxy for Mike Adenuga’s interest in the group, likewise Tunde Hassan-Odukale was appointed to represent Leadway Assurance and Leadway Pensure’s interest in the Holdco. It can only be assumed that Otudeko who remained a significant shareholder at the time was not allowed representation on any of the boards, either due to his insider loans or Emefiele’s anger over the manner Adeduntan was removed as chief executive.

Three, the reason(s) for the regulatory forbearance granted FBN Holdco no longer exists, as its NPL and capital adequacy ratios have met stipulated prudential requirements, so there is no clarity on why the Central Bank has not recalled its interim directors that are not representing shareholders’ interests but continue to sit on the boards of the group and First Bank. If the shareholders presently girding their loins for a high stakes game of thrones have any sense, that should be their foremost priority: how to recover FBN Holdco from the overreach of the CBN.


Another priority of theirs should be for the shareholders to come together and work in the interest of the financial services group, retail and institutional investors, as well as other stakeholders, rather than tearing each other apart and eroding confidence in the company that they all have a stake in. A public spectacle right now will only reinforce speculation that the group’s significant shareholders are more interested in their pecuniary interests and how they can use the holdco as a personal piggy bank, rather than an institution that creates value for them and the society at large.

Besides, there is nothing that cannot be resolved among a group of shareholders such as Otudeko, Adenuga, Otedola, Saheed Arisekola and the Odukales whose relationships, some familial, stretch back to 30 years and longer. Right now, their collective goal should be targeted at growing FBN Holdco which in recent years has been a laggard among its Tier 1 competitors. Of uppermost consideration, the shareholders should never lose sight of the fact that their banking subsidiary alone accounted for 82% of the group’s earnings in 2022. At a time when it appears to have turned the corner, it must not be derailed from its transformation journey to become truly the First!

  • Ms. Nwogwugwu, former Editor of THISDAY newspaper and former Managing Director Of Arise News Television, wrote in from Lagos

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