Ecobank Nigeria Limited has demanded the rejection of the recent acquisition of FBN Holdings shares by an entity associated with Oba Otudeko, the former chairman of the banking group. The demand is based on an alleged unsettled debt of N13.5 billion.
In a letter addressed to FBN Holdings, Kunle Ogunba, the lawyer representing Ecobank, accused Otudeko of diverting assets belonging to the Honeywell Group of Companies through Barbican Capital Limited. The purpose of this alleged diversion was to frustrate the enforcement of a judgment by the Supreme Court against Otudeko and the Honeywell companies. The judgment is related to their undisputed indebtedness to Ecobank. The acquisition of FBN Holdings shares by Otudeko’s entity comes after he acquired a 13.3 percent stake in FBNH through Barbican Capital, an affiliate of the Honeywell Group, in a deal worth N87.8 billion.
The letter from Ecobank’s lawyer, dated July 7, 2023, stated, “We, therefore, demand that you respectfully reject the approval/consent/registration/ratification of the shares bought by the said Barbican Capital Limited held via the aforementioned 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.”
Ecobank’s lawyer further demanded that FBN Holdings provide details of the status of the transaction within seven days. The lawyer emphasized that FBN Holdings, as a responsible corporate entity, should not take any action that may encourage the subversion or violation of the Supreme Court’s judgment, which mandates the Honeywell companies to pay their outstanding indebtedness to Ecobank.
In January, the Supreme Court upheld a judgment by the Court of Appeal against Honeywell Flour Mills Plc and two other firms involved in a dispute with Ecobank over an unsettled debt of N5.5 billion. The Supreme Court ruled that the appellants had the right to institute the suit and that the trial court had jurisdiction to hear the case. The companies had sued Ecobank in 2015, seeking a declaration that they had no further debt obligation to the bank after paying N3.5 billion towards the outstanding debt.
Ecobank argued that a repayment agreement had been reached with the three firms in 2013, and the debt repayment period had lapsed. The bank rejected the companies’ request to pay the balance over a one-and-a-half-year period in equal installments.
Ecobank Nigeria’s call for the rejection of the FBN Holdings shares acquisition is aimed at ensuring that the alleged unsettled debt is resolved and that the Supreme Court’s judgment is enforced. The outcome of this dispute will have implications for the involved parties and the broader financial sector.
