The proposed N350bn private placement by FBN Holdings Plc has sparked debates among shareholders, raising concerns about corporate governance and transparency.
The situation has called into question the leadership of the Chairman of FBN Holdings, Femi Otedola.
Speaking on the issue, Matthew Akinlade, the immediate past president of the Noble Shareholders Solidarity Association, defended Otedola’s leadership, describing some of the protests as influenced by external interests.
“For me, I believe some of these shareholders protesting are being used, and, unfortunately, people are willing to be manipulated. Otedola has been driving positive changes within FBN Holdings, and this is a bank that, in the past, paid peanuts as dividends. Now, with the bank’s improved performance, the situation is different,” Akinlade said.
However, Akinlade also called for a more inclusive capital-raising process. “Private placement should not be the first option. A public offer or rights issue would be more equitable, giving every shareholder an opportunity to invest. While I understand the need for raising funds, the board must ensure that the process is inclusive and transparent,” he added.
Bisi Bakare, the National Coordinator of the Pragmatic Shareholders Association of Nigeria, supported the private placement, emphasising its legality.
“When I look at this issue of private placement, I do not see why there is such a fuss. If you have your money and the process is legal, then why not? The key question should be whether the source of funds is legitimate. If the Securities and Exchange Commission and Central Bank of Nigeria approve it, then there’s no issue,” she said.
Similarly, Boniface Okezie, the National Coordinator of the Progressive Shareholders Association of Nigeria, acknowledged the board’s efforts but raised concerns about potential abuse of corporate governance.
“If the private placement was part of the agenda approved during the last Annual General Meeting, then there is nothing fundamentally wrong. The board promised to raise capital through the market, and they are simply following through,” Okezie stated.
“If this private placement is targeted at one individual or a small group, it could lead to an abuse of corporate governance, which would raise red flags with the Central Bank of Nigeria. Corporate governance is critical, and the CBN as the regulator, must verify the process and ensure everything is above board,” he said.
In response to the controversy, FBN Holdings Plc has reassured stakeholders that the private placement aligns with the resolutions passed during its last AGM.
In a statement filed with the Nigeria Exchange Limited, the company emphasized its commitment to transparency and corporate governance.
The statement, signed by company secretary Adewale Arogundade, affirmed that the ongoing developments would not disrupt operations.
“All businesses under FBN Holdings continue to provide uninterrupted services to customers,” the company noted.
FBN Holdings is on track to surpass regulatory minimum capital requirements ahead of the deadline, positioning itself for long-term growth and stability.
Despite the concerns raised, the company’s leadership has assured investors of its dedication to safeguarding their interests while pursuing strategic initiatives.
The unfolding developments underline the balancing act between maintaining corporate governance and achieving the capital needs necessary for sustained growth in Nigeria’s competitive banking sector.
