The Legal Fight Of First Bank’s Ghost Resurface To Haunt AGM And Raise Funds.
This year’s annual shareholder meeting of First Bank Holdings, the parent company of Nigeria’s oldest bank, is being threatened for the second year in a row by an ongoing legal dispute with certain shareholders.
The 12th AGM of FBN Holdings was originally set for August 22, but a Lagos Federal High Court postponed it at the request of shareholder Tohir Folorunsho Ismaila, who is the most recent in a long line of shareholders obstructing the bank’s annual meeting.
The bank said on the NGX that the virtual meeting, which was scheduled to take place on September 3, has been rescheduled. The purpose of the meeting was to seek shareholder approval for a N350 billion capital raising through a rights issue, private placement, or public offering.
In April, the bank declared its intention to raise around N300 billion by issuing shares through a public offering, private placement, or rights issue on the Nigerian or global capital markets. Nigerian banks are scrambling to find money to comply with the Central Bank’s increased capital requirements.
Other major lenders, such as Zenith and Access, are nearing the finish line, while some banks, such as GTCO and Fidelity, have completed their capital raising efforts.
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.
A complex web of legal disputes has ensnared First Bank as shareholders contest the validity of a board that was chosen by the CBN rather than the shareholders.
The fixed amounts of N50 million for directors’ fees and N63.7 million for board chairman’s fee for the fiscal year ending December 31, 2024, are also expected to be approved by the AGM, which has been postponed until September 3.
Femi Otedola, a multibillionaire investor, was elected chairman of the AGM last year.
Femi Otedola, a multibillionaire investor, was elected chairman at the AGM last year.
Multiple court records discovered by BusinessDay link certain of First Bank’s disgruntled shareholders, who have caused a shadow to fall over the bank’s AGMs, to the start of the bank’s seemingly never-ending legal fights.
Olusegun Samuel Onagoruwa, Kujenya Olayiwola Yusuf, and Hakeem Lawal-Oluwa are among the shareholders who have filed lawsuits contesting the validity of the AGMs, citing breaches of court orders that forbade such gatherings.
Court proceedings are underway in a number of instances; some have been postponed while appeals are ongoing, and others are awaiting a decision.
The case of FBN Holdings (FBHN) v. Olusegun Samuel Onagoruwa The lines of battle in the long-running conflict between FBN Holdings and shareholder and accountant Olusegun Samuel Onagoruwa were established well in advance of the 10th Annual General Meeting (AGM) notification. Since 2022, Onagoruwa, the principal proprietor of Segun Onagoruwa & Co., has endeavored to stop the AGM in its tracks. He and his legal team have fiercely rejected FBNH’s persistent attempts to lift this judicial roadblock because they are armed with a court order suspending any AGM-related actions.
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.
