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Ecobank asks FBN Holdings to reject Otudeko’s shares purchase

ECOBANK Nigeria Limited has written FBN Holdings Plc, the parent company of First Bank of Nigeria Limited, to stay action on 4.77 billion shares purchased by the Chairman of Honeywell Group, Dr. Oba Otudeko.

The Nigerian subsidiary of Ecobank Transnational Incorporated told FBN Holdings it will amount to helping the billionaire in diverting funds if FBN Holdings ratifies large shares acquired by the Otudeko.

Recalled that on Sunday, FBH Holdings told the Nigerian Exchange and the investing public that Honeywell Group Plc acquired a total of 4,770,269,843 units through its affiliate, Barbican Capital Limited.

Prior to the announcement, MarketForces Africa reported that the financial services group saw its market valuation surge after an unusual volume traded that passed through the local exchange.

The purchase brought the stake held by Honeywell Group to 13.3 per cent. The disclosure had raised questions about Otudeko’s next move two years after the board he headed was dissolved by the Central Bank of Nigeria (CBN) over alleged insider abuses.

Amid concern over his recently launched aggressive share accumulation, Ecobank, through a letter written by its legal counsel, ‘Kunle Ogunba & Associates and dated July 7, 2023, accused the businessman of seeking to divert the money meant to offset over N13.5 billion owed the lender.

The debts, which courts of competent jurisdiction have ruled over in favour of the bank, according to the letter, were “personally guaranteed” by the investor. The debts, which are principles and interests, were said to be owed by different companies, in which Otudeko has an interest.

“Please be informed that our client has instituted several lawsuits against Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell flour Mills Plc, and Dr. Oba Otudeko at the Federal High Court, Lagos, in view of recouping the humongous indebtedness of the highlighted entities to our client.

“It is particularly noteworthy that Dr. Oba Otudeko personally guaranteed the loan leading to the humongous indebtedness of the prior-mentioned companies. Whereas, the prior-mentioned entities had initially disputed their indebtedness to our client and had consequently filed an action in court to that effect.

“The Supreme Court on the 27th day of January 2023 in Appeal No. SC/CV/210/2021 delivered judgment affirming the indebtedness of the above persons to our client and further commanded that they must pay all the outstanding debts…” the letter addressed to the Managing Director/CEO of FBN Holdings, Nnamdi Okonkwo stated.

In the letter, Ecobank said current total debts were valued at N13.5 billion as of January 31, 2023, whilst interest continues to accrue on the due debts as legally sanctioned by the Supreme Court of Nigeria.

“Instead of taking urgent steps to repay their indebtedness in line with the mandate of the Supreme Court, it has come to our notice that Dr. Oba Otudeko (being the prime mover and alter ego of the debtor companies who personally guaranteed to repay the said debt) has taken active steps to divert his assets/funds and those of the debtor companies.

“This, he has done, by using a company known as Barbican Capital Limited, a special purpose vehicle, which was recently and hurriedly incorporated on 9th March, 2023 after the judgment of the Supreme Court.

“It is beyond doubt that the actions being taken by Dr. Oba Otudeko are targeted at diverting his assets and that of the Honeywell Group of Companies through the said Barbican Capital Limited, in order to frustrate the enforcement of the judgment of the Supreme Court against him and the Honeywell companies, towards recovering his/their undisputed indebtedness to our client,” Ecobank noted.

It urged FBN to “respectfully stay/reject the approval/consent/registration/ratification” of the shares bought by the said Barbican Capital and held via different entities as proceeding with such approval/registration “will be tantamount to assisting in the diversion of funds/assets meant for the payment of the debts.

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