Ecobank Vs Otudeko: Why We Have Not Acted – CBN

The Central  Bank of Nigeria (CBN) despite maintaining silence on the latest ownership battle of  FBN Holdings,  is keenly monitoring  development over the raging  acquisition tussle.

With about 31 million customers and deposits of over N7.6 trillion, analysts have said the response of regulatory bodies is crucial in determining the validity and acceptance of the recent acquisition of FBN Holdings shares.

This follows the latest move by Ecobank which is pursuing the takeover of shares recently acquired by Oba Otudeko in FBN Holdings due to his indebtedness to the bank.

Oba Otudeko and his affiliated companies owe Ecobank over N13.5 billion.

In 2017, Ecobank Nigeria Limited filed several lawsuits against Otudeko and his companies, including Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, and Honeywell Flour Mills, at the Federal High Court in Lagos.

These legal actions aimed to recover the companies’ debts to the bank which  Otudeko personally guaranteed.

Despite Otudeko and his companies disputing their debts, the Supreme Court affirmed their indebtedness in January of this year.

A letter from Ecobank’s legal representative to the CEO of FBN Holdings, accuses Oba Otudeko of intentionally diverting his and his debtor companies’ assets to evade debt payment, in defiance of the Supreme Court’s directive.

In the letter, Kunle Ogunba and Associates, Ecobank’s counsel, claim that instead of repaying the debts, Otudeko took actions to divert his assets and funds through a newly created special purpose vehicle named Barbican Capital Limited.

Ecobank’s lawyers have urged FBN Holdings to reject acknowledging the shares as belonging to Otudeko, as doing so would violate the Supreme Court’s judgment.

Additionally, the letter demanded that FBN Holdings provide detailed information regarding the transaction’s status within a seven-day timeframe (which will lapse on the 14th of July based on the date of the letter).

“We also hereby demand that you avail us details of the status of the said transaction within the ensuing 7 days, noting that as a responsible Corporate entity, you are not expected to take any action which may be tantamount and/or construed to encouraging the subversion and/or violation of the extant judgment of the Supreme Court which undisputed mandated the Honeywell companies to pay their outstanding indebtedness (same debt personally guaranteed by the alter ego of the Honeywell Companies (Dr. Oba Otudeko) to Ecobank Nigeria Limited.”

It is unclear if FBN Holdings will accede to this request as the bank has already notified the public via a letter to the NGX of a 13.3% acquisition of the shares as declared by Barbican Capital Ltd.

Effort to get their response was not successful as calls to the First Bank corporate communication head was not answered.

However, a senior management source who is not authorized to speak on the issue told press that the Central Bank is watching proceedings and will make its intervention at the appropriate time.

The source said: “ Right now, Ecobank has moved to enforce a Supreme Court judgment in respect of the matter and we cannot be seen to interfere with that process.

“Anybody can go to the exchange and acquire whatever amount of shares they like. The bank is therefore obliged to approach the apex bank with the details of the transaction for approval.

“The CBN will then examine issues around a proper and fit transaction, ensure there is no regulatory infringement, and also look at the source of funds. So without prejudice to what is going on, the CBN is yet to play this role as far as that transaction is concerned.”