Ecobank Urges FBN Holdings to reject Otudeko’s share acquisition over ‘N13bn debt’

Written by on July 11, 2023

Ecobank Nigeria Limited has urged First Bank Nigeria (FBN) Holdings to reject the acquisition of shares by Oba Otudeko, the former chairman of Ecobank, due to an alleged debt of N13.5 billion.

This development arises just a few days after Otudeko’s affiliated company, Barbican Capital Limited, acquired a 13 percent stake in FBN Holdings, consequently claiming the top position in the ownership hierarchy.

Oba Otudeko, who also serves as the founder and chairman of Honeywell Flour Mill, previously held the position of chairman at FBN until 2019.

In a letter dated July 7, 2023, addressed to FBN Holdings, Ecobank’s lawyer, Kunle Ogunba, accused Otudeko of diverting his assets and those of the Honeywell Group of companies through Barbican Capital Limited. The purpose of this alleged diversion was purportedly to hinder the enforcement of a judgment from the Supreme Court against Otudeko and the Honeywell companies, aiming to recover the undisputed debt owed to Ecobank.

“It is particularly noteworthy that Otudeko personally guaranteed the loan leading to the humongous indebtedness of the prior-mentioned companies,” the letter reads.

“Whereas, the prior-mentioned entities had initially disputed their indebtedness to our client and had consequently filed an action in court to that effect, the supreme court on the January 27, 2023, in appeal No. SC/CV/210/2021 delivered judgment affirming the indebtedness of the above persons to our client.

“It further commanded that they must pay all outstanding debts that have accrued under the loan contract between the parties; being the same debt personally guaranteed by Otudeko, which said indebtedness stood in the sum of N13,507,052,417.99  as at January 31, 2023, whilst interest continues to accrue on the due debts as legally sanctioned by the supreme court of Nigeria, the highest court in the land, aforesaid.

“This he has done by using a company known as Barbican Capital Limited (special purpose vehicle), which was recently and hurriedly incorporated after the judgement of the supreme court (specifically on March 9, 2023).

“We state that the said Otudeko has via the said Barbican Capital Limited ‘allegedly’ purchased an aggregate of N4,770,269,843  shares of FBN Holdings Plc.”

According to the bank, further investigation showed that the shares purchased by Otudeko were held in the names of “Peace Account GASL Nominee Limited, Bluenote Ltd., RAML/MEF9, RAML Account Management Services, Monarch Securities Ltd., Mansion House Limited., Alliance Estates Ltd., Edebvale Ltd., Metropolitan Trust Nig. Ltd, and Spring Water Limited”.

“Consequent upon the foregoing crystalised facts, it is beyond doubt that the actions taken by Otudeko is targeted at diverting his assets and that of the Honeywell Group of companies through Barbican Capital Limited, in order to frustrate the enforcement of the judgment of the supreme court against him and the Honeywell companies, towards recovering his/their undisputed indebtedness to our client,” the bank said. 

“We, therefore, demand that you respectfully stay/reject the approval/consent/registration/ratification (however described or in whatsoever manner) of shares bought by the said Barbican Capital Limited held via the afforested entities, as proceeding with such approval/registration will be tantamount to assisting in the diversion of funds/assets meant for the payment of the debt which has been affirmed by the supreme court.”

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