The Central Bank of Nigeria (CBN) and FBN Holdings Plc have asked a Federal High Court in Lagos to dismiss a lawsuit brought by investment firm Barbican Capital Ltd.
The suit pertains an alleged alteration of 5.39 billion units of shares in FBN Holdings, a significant stake in one of Nigeria’s leading financial institutions.
Barbican Capital, an affiliate of Honeywell Group Limited, claims that over the years, it has cumulatively acquired 15.1% of FBN Holdings’ shares.
These acquisitions, the firm asserts, were properly recorded by FBN Holdings’ appointed registrars, Meristem Registrar and Probate Service Ltd, and acknowledged by the Central Securities Clearing System (CSCS). However, the legitimacy of this shareholding is now under scrutiny.
In court filings, FBN Holdings, represented by Senior Advocate of Nigeria (SAN) Babajide Koku, argues that Barbican Capital deliberately concealed an ongoing verification exercise by the CBN.
According to the bank, the lawsuit is an attempt to bypass regulatory scrutiny.
“The primary purpose of instituting this suit was to circumvent the verification exercise and the decision taken by the CBN against Barbican Capital Limited,” FBN Holdings stated.
“Rather than regularize its status with the CBN by providing relevant documents to the CBN necessary for the verification of its unverified shareholding, the plaintiff has instituted this suit in a bid to activate machinery of justice to compel the defendant to defy its regulator, due process, regulatory laws and policies by mandating it to recognise all of the plaintiff’s purported shareholding obtained without CBN’s approval which as at the time of filing the suit stood to the tune of about 5,397,409,262 billion units. They added
Nigerian banking regulations require any acquisition of a 5% or greater stake in a financial holding company to receive prior approval from the CBN.
FBN Holdings informed the CBN in July 2023 that Barbican Capital had acquired a 13.3% shareholding in the bank, triggering a verification process by the regulator.
CBN requested Barbican Capital to provide documentation to validate its shareholding. However, the firm ‘could only’ produce evidence for 3.11 billion shares, representing 8.67% of FBN Holdings’ total shares, leaving 2.34 billion shares unverified.
In January 2024, the CBN notified FBN Holdings that it could not verify the full extent of Barbican Capital’s claimed shares due to insufficient documentation.
As a result, the bank revised Barbican Capital’s shareholding in its financial statements to reflect only the verified portion, in compliance with regulatory requirements.
Details of the second quarter 2023 financial statement of FBN Holdings reveal Barbican holds 8.67% of the company while Femi Otedola holds 11.87% directly and indirectly, thus the majority shareholder. The shareholding is verified by the CBN.