There is an uneasy calm in First Bank, Nigeria’s oldest financial institution, over an alleged bid by the chairman of the holding company, Femi Otedola to launch a N350 billion private placement.
The development is generating unease in the bank, with shareholders kicking against the plan, while calling for an emergency general meeting, Weekend Trust can report.
The call for an emergency general meeting is being seen as a plot to remove the chairman, whose leadership style some shareholders appear to be uncomfortable with.
Some of the shareholders are said to be displeased with recent changes in the management and the easing out of some senior staff believed to be non-cooperative.
However, the latest was the alleged clandestine move to launch a private placement as against the ongoing rights issue.
The parent company of the bank, FBN Holdings Co, is in the process of raising N150 billion through a rights issue as part of the ongoing recapitalisation directed by the Central Bank of Nigeria (CBN).
While the rights issue is yet to be concluded amidst pending allotment of shares, shareholders said they were shocked to hear of a move to launch a private placement.
Weekend Trust reports that while a private placement targets specific investors through an offer of security or shares, the rights issue offers existing shareholders the privilege to buy additional shares.
According to the shareholders, the move to launch a private placement was intended to confer advantage on the chairman against existing shareholders.
On Thursday, Norsworthy Investment Limited, one of the shareholders of the bank linked to Gabriel Ogbechie, in a letter to the company secretary of First Bank, Adewale Arogundade, expressed “grave concern” over the move to launch a private placement.
While there has not been any official communication from either the bank or Otedola himself, some shareholders are calling on the regulator, the Central Bank of Nigeria (CBN) to speak up on the raging boardroom crisis in Nigeria’s oldest financial institution.
Speaking with Weekend Trust, an activist, Adeleke Adebayo, said there was the need for the regulator to speak up, saying that recent actions by the current leadership of the bank “showed flagrant abuse of the corporate governance process.”(Daily Trust)
