Receiver Manager Urges First Bank of Nigeria Holdings to Reject Oba Otudeko’s Share Acquisition Amidst Ongoing Debt Controversy.
In a recent development, the Receiver Manager acting on behalf of Ecobank Nigeria Limited, Kunle Ogunba and Associates, has formally requested that First Bank of Nigeria (FBN) Holdings decline the acquisition of its shares by Oba Otudeko.
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The move comes in light of allegations that Otudeko owes Ecobank a substantial sum of N13.5 billion as of January 31, 2023, following a ruling by the Supreme Court that confirmed his indebtedness to the financial institution.
Last week, it was reported that Otudeko had acquired 4.77 billion shares of FBN Holdings, amounting to N106.37 billion as of Monday. However, Kunle Ogunba and Associates, in a letter dated July 7, 2023, urged FBN Holdings not to acknowledge Otudeko’s share acquisition to prevent any potential diversion of funds intended for settling the outstanding debt.
The letter disclosed that the debt is distributed among various companies associated with Otudeko, including Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, and Honeywell Flour Mills PLC, the latter of which has been sold to Flour Mills. The Receiver Manager highlighted that the Supreme Court’s ruling on January 27, 2023, validated Ecobank’s claims against Otudeko and his affiliated entities.
Although Otudeko has denied being indebted to Ecobank and has appealed the court’s decision, the debt ruling remains in effect. The letter stated, “Please be informed that our client instituted several lawsuits against Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell Flour Mills PIC, and Dr. Oba Otudeko at the Federal High Court, Lagos, in view of recouping the humongous indebtedness of the highlighted entities to our client.
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It is particularly noteworthy that Dr. Oba Otudeko personally guaranteed the loan leading to the humongous indebtedness of the prior-mentioned companies.”
Furthermore, the letter explained that despite initial disputes over the indebtedness, the Supreme Court affirmed the financial liability of the mentioned entities to Ecobank on January 27. The court also ordered them to repay the outstanding debts resulting from the loan contract, which were personally guaranteed by Otudeko. The total debt amounts to N13,507,052,417.99 as of January 31, 2023, with additional interest accruing as per the Supreme Court’s ruling.
Ecobank has explicitly demanded that FBN Holdings refrain from transferring the shares to Otudeko or accepting his acquisition through Barbican Capital Limited, amidst the ongoing controversy surrounding the outstanding debt.
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The letter reads: “We therefore demand that you respectfully stay/reject/approval/consent/registration/ ratification {howsoever described or in whatsoever manner} of the 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, same being a flagrant violation of the extant judgment of the Supreme and which has effectively determined the outstanding indebtedness between the Honeywell Group and our client, Ecobank Nigeria Limited.”
As of the time of filing this report, FBN Holdings, Ecobank and Kunle Ogunba & Associates were yet to respond to Ripples Nigeria’s enquiry.
