FBN Holdings, Nigeria’s oldest financial institution, led by billionaire Femi Otedola, is embroiled in a complex legal battle. One of its largest shareholders, Barbican Capital Limited, owned by Oba Otudeko, has taken the bank to court to protect its rights over a substantial shareholding.
The lawsuit was triggered by a notification received by Barbican Capital, indicating that FBN Holdings sought to reduce the investment company’s shareholding in the bank by 40%.
Initially, Barbican Capital’s stake in FBN Holdings was recorded as 5.39 billion shares. However, this was reduced to 3.1 billion shares in the bank’s December 2023 audited accounts, which were released in May 2024.
This reduction sparked confusion, particularly because the bank had reported Barbican’s shareholding as 4.8 billion shares in its December 2023 unaudited accounts published in February 2024.
The bank’s audit attributed the 3.1 billion shares to those “verified” by the Central Bank of Nigeria (CBN), raising further questions about discrepancies in shareholding records.
Barbican’s response
In response, Barbican Capital filed a lawsuit at the Federal High Court in Lagos. The company wants its ownership of 5.39 billion shares, equivalent to 15.01% of FBN Holdings’ total shares affirmed.
In its filing, Barbican Capital presented a statement from the Central Securities Clearing System (CSCS) as evidence, confirming the company’s ownership of the disputed shares as of May 23, 2024.
The CSCS, Nigeria’s Central Securities Depository (CSD), licensed to carry out the depository, clearing, and settlement of all transactions in the Nigerian Capital Market, is regarded as the definitive source for verifying share ownership. Therefore, the CSCS’s statement added significant weight to Barbican’s claims.
According to court documents, Barbican’s shares increased from the 13.61% reported by FBN Holdings in December 2023 to 15.01% after the consolidation of shares from Honeywell into Barbican’s portfolio.
Moreover, the court papers disclose that FBN Holdings paid dividends to Barbican Capital for all 5.39 billion shares between November and December 2023, further validating Barbican’s ownership.
Despite this, FBN Holdings has since instructed Meristem Registrars & Probate Services Ltd, which handles dividend payments to shareholders, to freeze payments to Barbican for the shares in question.
Legal remedies sought by Barbican Capital
In its lawsuit, Barbican Capital is seeking several legal remedies, including a declaration that the number of shares recorded in FBN Holdings’ register matches the number held by Barbican, as reflected in the CSCS records.
Barbican is also requesting the court to affirm its right to all benefits of membership, including dividends, for all shares recorded as owned by it.
The investment firm argues that no entity or third party has contested its ownership of the shares and insists that it has not divested any of its shares.
The company is asking the court to issue a perpetual injunction preventing FBN Holdings from altering, reducing, or misrepresenting Barbican’s shareholding in the bank.
In an affidavit, Otu Hughes, the Chief Investment Officer of Barbican, reiterated that as of July 1, 2024, Barbican held 5.39 billion fully paid shares in FBN Holdings. He urged the court to intervene, expressing concern over potential damage to Barbican’s stake in FBN Holdings.
“The applicant is apprehensive that if this Honourable Court does not restrain the defendant in the manner sought by the applicant, the rest of the suit might be damaged/destroyed,” Hughes stated.
It is worth noting that if Barbican’s claims are ratified and Otudeko’s 15.01% shareholding is confirmed, it would make the businessman FBN’s largest shareholder, potentially knocking Otedola off the top spot he only recently secured.
