Battle Over Control as NGX queries First Bank Holdings over Hassan-Odukale and Femi Otedola claim to shareholding

 

Hassan and Otedola

The Holding  company of Nigeria’s oldest bank has been embroiled in a tussle for control after billionaire Femi Otedola acquired 5.07 per cent of its shares.

 

 

FBN Holdings Plc responded to a query by the Nigerian Exchange Limited (NGX), seeking clarification on the claim by Tunde Hassan-Odukale, the chairman of its flagship unit FirstBank, and his related parties to a 5.36 per cent stake in the holdco, a document published by the bourse on Wednesday showed.

 

 

The NGX authority had on Tuesday written the group, demanding explanations on why the shareholdings of Mr Hassan-Odukale and his related parties were in two parts of 4.16 per cent and 1.20 per cent respectively.

It also requested FBN Holdings to clarify the rationale behind factoring in an equity stake of 1.05 per cent belonging to Leadway Pensure PFA in the 1.20 per cent.

 

Mr Otedola has notified the exchange of his holding regulation demands when an individual or a company acquires at least 5 per cent of a company’s shares and said he is making plans to notify regulators including the Securities and Exchange Commission and the Central Bank of Nigeria.

 

A notification from FBN Holdings to the registrar general of CAC,  depicts the consolidated shares of Mr Hassan-Odukale and his related parties at “5.36 per cent”, with Leadway Pensure PFA contributing 1.05 per cent of that lump figure.

It remains unclear how the shares of a pension fund administrator, which is often managed for investment from a pool of employees’ contributed fund, could be reckoned as part of a single person’s investment.

“Formed by a consortium of three (3) major financial service companies, Leadway Pensure is one of the most capitalized PFA’s in Nigeria with an authorized share capital of N2.0 billion,” the About section of the website of Leadway Pensure said on Tuesday.

  

Our shareholder’s fund is in excess of N7.0 billion, unimpaired by losses. Since inception we have positioned ourselves as one of Nigeria’s foremost Pension Fund Administrators,” it further states.

A spokesperson of FBN Holdings did not respond to calls seeking comment.

The NGX also asked the financial services group to explain what it meant by “cumulative equity stake” and the use of that phrase in relation to Leadway Pensure PFA’s holdings in its earlier notification to the exchange.

Shares are only known to be held directly or indirectly, with the term “cumulative equity stake” not known in stock market parlance.

 

In its reaction, FBN Holdings affirmed the 4.16 per cent interest are held directly or indirectly by Mr Hassan-Odukale, identifying the 1.20 per cent as shares ascribed to the holdco’s chair by virtue of his influence and having significant control.

“Tunde Hassan-Odukale has an indirect interest in Leadway Holdings Limited that holds 69% equity in Leadway Pensure PFA and as such exerts significant influence and control over Leadway Pensure. Consequently, the Company ascribed these shareholding to him,” it said in the letter signed by Company Secretary Seye Kosoko.

FBN Holdings invoked Section 88(1) CAMA 2020 which defines a person with significant control as any person:

“(a) directly or indirectly holding at least 5% of the shares or interest in a company or limited liability partnership;

 

(b) directly or indirectly holding at least 5% of the voting rights in a company or limited liability partnership;

(c) directly or indirectly holding the right to appoint or remove a majority of the directors or partners in a company or limited liability partnership;

(d) otherwise having the right to exercise or actually exercising significant influence or control over a company or limited liability partnership; or

(e) having the right to exercise, or actually exercising significant influence or control over the activities of a trust or firm whether or not it is a legal entity but would itself satisfy any of the first four conditions if it were an individual.”

“It was to the extent of the foregoing that we included the 1.05% of Leadway Pensure PFA’s holdings as part of the indirect holding of Mr. Tunde Hassan-Odukale, for full disclosure and transparency, in line with the provisions of the extant rules and regulations.”

FN Holdings described “cumulative equity stake” as “the summation of all the direct, indirect and ascribed shareholding of Mr. Tunde Hassan-Odukale.”