FBN: Shareholders back Otedola’s reforms, term EGM unnecessary

The ongoing debate among some shareholders of FBN Holdings Plc over the proposed N350bn private placement has raised questions about corporate governance and transparency.

However, some shareholders have defended the ongoing reforms under the leadership of the Chairman of FBN Holdings, Femi Otedola, dismissing calls for an extraordinary general meeting as unnecessary.

Speaking to our correspondent on Thursday, Matthew Akinlade, the immediate past president of the Noble Shareholders Solidarity Association, described some Ashareholders’ protests as driven by external interests.

He argued that the moves made by Otedola were in the best interest of the bank. “For me, I believe some of these shareholders protesting are being used, and, unfortunately, people are willing to be manipulated. Otedola has been driving positive changes within FBN Holdings, and this is a bank that, in the past, paid peanuts as dividends. Now, with the bank’s improved performance, the situation is different,” Akinlade stated.

While Akinlade fully supported Otedola’s leadership, he questioned the preferred method of capital raising, calling for an inclusive process.

“Private placement should not be the first option. A public offer or rights issue would be more equitable, giving every shareholder an opportunity to invest. While I understand the need for raising funds, the board must ensure that the process is inclusive and transparent,” Akinlade argued.

The National Coordinator of the Pragmatic Shareholders Association of Nigeria, Bisi Bakare, also weighed in, defending the private placement as long as it adhered to legal and regulatory guidelines.

“When I look at this issue of private placement, I do not see why there is such a fuss. If you have your money and the process is legal, then why not? The key question should be whether the source of funds is legitimate. If the Securities and Exchange Commission and Central Bank of Nigeria approve it, then there’s no issue,” Bakare said.

Additionally, Boniface Okezie, the National Coordinator of the Progressive Shareholders Association of Nigeria, echoed similar sentiments but raised concerns regarding transparency and the potential abuse of corporate governance.

“If the private placement was part of the agenda approved during the last Annual General Meeting, then there is nothing fundamentally wrong. The board promised to raise capital through the market, and they are simply following through,” Okezie stated.

However, Okezie stressed the need for transparency, warning against the risk of the private placement being directed towards a select few.

“If this private placement is targeted at one individual or a small group, it could lead to an abuse of corporate governance, which would raise red flags with the Central Bank of Nigeria. Corporate governance is critical, and the CBN, as the regulator, must verify the process and ensure everything is above board,” he added.

Okezie noted that the private placement was aligned with the resolutions passed during the last AGM.

Okezie urged the Central Bank of Nigeria to provide clarity on the issue to maintain transparency and reassure stakeholders.

“If the private placement was indeed part of the AGM resolutions, there’s no justification for this controversy. The CBN, as the regulator, must clarify the situation for transparency and stakeholder confidence,” he concluded.

In a statement filed by the company secretary, Adewale Arogundade, on the Nigeria Exchange Limited on Thursday, FBN Holdings assured stakeholders the ongoing developments would not impact its operations. The company emphasised that all businesses under its umbrella continue to provide uninterrupted services to customers.

The company also reassured investors, shareholders, and the public that it is taking measures to protect the interests of FBN Holdings and its subsidiaries. According to the statement, the group’s performance has continued to improve, resulting in a higher market capitalization. FBN Holdings is also on track to surpass the regulatory minimum capital requirements well before the deadline.

Arogundade added that the company remains committed to corporate governance, assuring that management and its subsidiaries are operating with the highest levels of transparency and accountability.

The PUNCH reported that FBN Holdings Plc has opened a rights issue, offering 5.983 billion ordinary shares at 50k each to existing shareholders at N25 per share, in a bid to raise additional capital totalling N150 billion.