Ghost of First Bank’s legal battles return to haunt AGM, capital raise

An unending legal battle with some shareholders is threatening for the second straight year to stifle an annual meeting of shareholders of First Bank Holdings, the parent company of Nigeria’s oldest bank.

A Lagos Federal High Court halted FBN Holdings’ 12th AGM, initially scheduled for August 22, at the request of shareholder Tohir Folorunsho Ismaila, the latest of a growing list of shareholders standing in the way of the bank’s crucial annual meeting.

The virtual meeting now postponed till September 3 according to a notice by the bank on the NGX, was supposed to be the place to get shareholders approval for a N350 billion capital raise in the form of a public offering, rights issue or private placement.

The bank had in April announced plans to raise some N300 billion through issuance of shares via a public offering, private placement or rights issue in the Nigerian or international capital markets. Nigerian banks are in a hunt for cash to meet new capital rules set by the Central Bank.

Some banks, from GTCO to Fidelity have concluded their capital raising plans, with other big lenders from Zenith to Access also approaching the finish line.

Securing approval for First Bank’s capital raise now faces another delay with the postponement of its AGM.

The postponement of the AGM is due to the recent high court ruling blocking the meeting.

A text message seeking comments from First Bank was not immediately responded to.

The bank’s annual general meeting last year also looked on shaky ground after a similar court ruling by Justice I. N. Oweibo in the case brought against the bank by three shareholders – Olojede Adewole Solomon, Adebayo Oluwafemi Abayomi and Ogundiran Emmanuel Adejare, blocked the meeting from happening.

The virtual meeting did go on, with First Bank insisting that it had not been served any court order stopping it from holding its 11th Annual General Meeting.

First Bank finds itself ensnared in a web of legal battles with shareholders questioning the legitimacy of a board appointed by the CBN rather than shareholders.

The AGM delayed till September 3 is also supposed to approve a fixed amount of N50 million each as directors’ fees for the financial year ending 31 December 2024 and N63.7 million as the fee for the board chairman.

Billionaire investor, Femi Otedola, was appointed chairman at a controversial AGM last year.

BusinessDay obtained multiple court documents that trace the beginning of First Bank’s seemingly unending legal battles to some of its disaffected shareholders that have cast a shadow on its AGMs.

Shareholders including Olusegun Samuel Onagoruwa, Kujenya Olayiwola Yusuf and Hakeem Lawal-Oluwa, have initiated lawsuits to challenge the legitimacy of the AGMs, citing violations of court orders that prohibited such meetings.

Several cases are in various stages of court proceedings, with some adjourned pending appeals and others awaiting judgement.

Olusegun Samuel Onagoruwa vs. FBN Holdings (FBHN) – In the simmering feud between Olusegun Samuel Onagoruwa, an accountant and shareholder, and FBN Holdings, the battle lines were drawn long before the ink could dry on the 10th Annual General Meeting (AGM) notice. Onagoruwa, the driving force behind his firm, Segun Onagoruwa & Co., has fought since 2022 to halt the AGM in its tracks. Armed with a court order suspending all AGM-related actions, he and his legal team have steadfastly resisted FBNH’s relentless attempts to lift this judicial blockade.

Despite the court’s clear mandate, FBNH convened the AGM in 2023, triggering contempt proceedings over its directors. The saga took a new turn in 2024 when Leadway Assurance entered the fray, seeking court approval to break the deadlock.

But Onagoruwa’s camp swiftly moved to counter this manoeuvre, filing objections that have further entangled the proceedings.

The case brought by Onagoruwa now stands at a crossroads, paused in anticipation of the appellate court’s verdict, while the Leadway case is set to resume on October 15, 2024.

Leadway Holdings Ltd vs. FBN Holdings Plc & Others – A Battle for Compliance

In another corner of the legal battlefield, Leadway Holdings Ltd took its grievances to the Federal High Court in Lagos, demanding that FBN Holdings Plc be compelled to hold its AGM. The catalyst for this dispute is a newly minted directive from the CBN which increases the minimum capital requirements for banks. Leadway argues that this AGM is not just a procedural formality but a necessity to align with the Central Bank’s mandate, effective from March 28, 2024.

The plot thickens as Hakeem Lawal-Oluwa, an unexpected defendant in the matter, raises a red flag. He contends that Leadway’s lawsuit is redundant, given the existence of similar cases already clogging the courts. The case, initiated on April 30, 2024, has seen a flurry of legal skirmishes. Lawal-Oluwa’s objections and counterclaims have been met with staunch rebuttals from Leadway, all culminating in a tense courtroom session on May 23, 2024.

Kujenya Olayiwola Yusuf vs. FBN Holdings Plc

Kujenya Olayiwola Yusuf, a minority shareholder in FBN Holdings Plc, finds himself pitted against First bank in a battle over the legitimacy of last year’s AGM. The meeting, scheduled for August 15, 2023, promised to discuss crucial resolutions, including a significant increase in the company’s share capital. But as the date approached, Yusuf learned of a Federal High Court order that had thrown a wrench into the works, prohibiting FBN Holdings from holding the AGM.

Undeterred by the court’s directive, the company pressed ahead, passing the resolutions and updating its records with the Corporate Affairs Commission (CAC)—actions that Yusuf argues were not just illegal but a direct affront to his rights as a shareholder.

His lawsuit aims to nullify all decisions made during the AGM, including the registration of the new share capital and the revised Memorandum and Articles of Association. The case, with the CAC also in the dock for its role in registering the contested documents, remains unresolved, with the next court date set for October 3, 2024.

Yetunde Olowoyeye vs. Securities and Exchange Commission

A Minority Shareholder’s Stand In yet another twist, Yetunde Olowoyeye, a minority shareholder, has taken on the might of FBN Holdings Plc, the Securities and Exchange Commission (SEC), and the Corporate Affairs Commission (CAC) in a bid to uphold the rule of law. Her case, filed under Suit No. FHC/ABJ/CS/1613/2023, also revolves around the controversial AGM of August 15, 2023, which Olowoyeye claims was held in blatant defiance of a court order issued just days earlier on August 9.

The resolutions passed during this AGM, Olowoyeye argues, are null and void, having been forged in the fires of judicial contempt. Her lawsuit seeks to block the implementation of these resolutions, asserting that they violate shareholder rights under the Companies and Allied Matters Act (CAMA) 2020. FBN Holdings Plc, in its defense, questions the court’s jurisdiction and the plaintiff’s standing, branding the lawsuit an abuse of process given that similar issues are already under appeal.

Hakeem Lawal-Oluwa vs. Securities and Exchange Commission & 3 Others Hakeem Lawal-Oluwa is also challenging the legitimacy of last year’s AGM in court. He argues, like the others, that the AGM was convened in direct contravention of a court order from August 9, 2023, which had temporarily blocked the meeting.

The defendants in this case—the Securities and Exchange Commission (SEC), FBN Holdings Plc, and two other related entities—find themselves accused of flouting judicial authority. Lawal-Oluwa seeks court orders to halt any actions that might undermine his interests or sidestep the previous court ruling. But the case, like so many others in this legal labyrinth, has been put on ice, pending the outcome of related appeals.

Lawal-Oluwa in a separate suit against the Securities and Exchange Commission (SEC), Nigerian Exchange Group PLC, and the Attorney General of the Federation, argued that the illegal AGM not only violated proper procedures but also jeopardised his rights as a shareholder by increasing share capital and waiving shareholders’ pre-emptive rights.

FBN Holdings’ Appeal Against Olojede Adewole Solomon and Others – A Fight to Overturn an Injunction

In a parallel legal skirmish, FBN Holdings PLC is battling to overturn the initial injunction that has cast a long shadow over its Annual General Meeting (AGM) last year. The injunction, granted on August 9, 2023, at the behest of Olojede Adewole Solomon, Adebayo Oluwafemi Abayomi, and Ogundiran Emmanuel Adejare, has become the focal point of FBN Holdings’ legal strategy.

The company argues that the trial judge erred in granting the injunction while similar relief was still pending in the substantive suit. FBN Holdings contends that the court lacked the jurisdiction to issue the order, citing procedural deficiencies. Furthermore, the company asserts that an AGM, as a statutory requirement under Nigerian law, cannot be restrained by an injunction.

Undeterred, FBN Holdings has appealed to the Court of Appeal, seeking not only to overturn the injunction but also to stay further proceedings in the case. The company argues that the injunction was born out of self-induced urgency rather than genuine necessity, and that the lower court’s decision was fundamentally flawed.

M.A. Banire & Associates vs. FBN Holdings PLC – A Call to Accountability

As the legal drama surrounding FBN Holdings reaches its crescendo, M.A. Banire & Associates, representing the petitioners Olojede Adewole Solomon and others, have issued a clarion call for accountability. The law firm has expressed grave concerns over FBN Holdings’ blatant disregard for the Federal High Court’s interim order of August 9, 2023, which prohibited the company from holding its AGM on August 15, 2023.

Despite the court’s clear directive, FBN Holdings proceeded with the meeting, approving a contentious increase in its share capital. The petitioners, through their solicitors, have urged the Corporate Affairs Commission (CAC) to retract the registration of the AGM’s resolutions, warning that failure to act in accordance with the law will prompt further legal action. The letter from M.A. Banire & Associates, signed by Muiz Banire, underscores the seriousness of the situation and the petitioners’ determination to see justice served, even if it means escalating the matter to higher judicial authorities.