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

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

The development is coming a few days after Otudeko’s affiliate, Barbican Capital Limited, acquired 13 percent stake to gain top spot in the ownership ladder at FBN Holdings.

Otudeko, who is the founder and chairman of Honeywell Flour Mill, was the chairman of FBN until 2019.

In a letter addressed to FBN Holdings, dated July 7, 2023, Kunle Ogunba, lawyer of Ecobank, accused Otudeko of “diverting his assets and that of the Honeywell Group of companies through the said 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”.

“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.”