Shareholders Push for Otedola’s Removal Amid Corporate Governance Concerns at FBN Holdings

Shareholders Push for Otedola’s Removal Amid Corporate Governance Concerns at FBN Holdings

The demand for an Extraordinary General Meeting (EGM) by some shareholders of FBN Holdings Plc to remove its board chairman, Femi Otedola, has sparked fresh debates over the enforcement of the Central Bank of Nigeria (CBN) corporate governance guidelines.

Since Otedola assumed the chairmanship of FBN Holdings, the company and its subsidiary, First Bank of Nigeria Limited, have faced significant internal conflicts. Shareholders have expressed concerns over the company’s management, alleging missteps and favouritism under Otedola’s leadership.

The shareholders’ push for an EGM is based on Section 215 (1) of the Companies and Allied Matters Act (CAMA), which permits the board or shareholders to call for an EGM to address pressing issues, including board leadership.

The agenda of the proposed meeting includes the removal of Otedola and non-executive director Julius Omodayo-Owotuga.

A group of shareholders alleges that:

• Otedola’s tenure has been marked by instability and internal strife.
• His emergence as chairman was influenced by former CBN Governor Godwin Emefiele, who facilitated his acquisition of significant shares.
• Otedola had a role in the abrupt resignation of former First Bank CEO Adesola Adeduntan, the exit of ex-chairman Tunde Hassan-Odukale, and the removal of executive director Tosin Adewuyi.
• He favoured the appointment of Olusegun Alebiosu as CEO, allegedly to consolidate control.
• Otedola secured a $50 million loan from Afreximbank to dominate the bank’s N360 billion private placement, an action some shareholders have opposed.

In a statement signed by the company secretary, Adewale Arogundade, FBN Holdings asserted that the calls for Otedola’s removal do not affect its operations. The group reiterated its commitment to corporate governance and assured stakeholders of uninterrupted services.

The statement noted the ongoing collation of returns from its recent rights issue, which closed on December 30, 2024, and highlighted the company’s improving market performance. However, a check revealed a dip in the company’s share price by -1.27% to close at N31.50 on Thursday.

Patrick Ajudua, National President of New Dimension Shareholders, urged the CBN to enforce strict compliance with corporate governance rules to prevent potential collapse. He advocated for an amicable resolution to protect shareholder investments and the bank’s stability.

While FBN Holdings faced a slight decline, the Nigerian stock market overall showed positive performance on Thursday, with investors gaining N792.73 billion, raising the market capitalisation to N64.35 trillion.

The unfolding drama at FBN Holdings highlights critical questions about corporate governance and shareholder activism in Nigeria’s financial sector. The CBN’s role in ensuring adherence to governance rules will be pivotal in resolving the ongoing crisis and maintaining investor confidence in the bank.