The Central Bank of Nigeria (CBN) and FBN Holdings Plc have asked a Federal High Court sitting in Lagos to dismiss a suit filed by an investment firm, Barbican Capital Ltd, over the alleged alteration of its alleged 5,386,397,202 units of shares in the bank.
The plaintiff (Barbican Capital Limited), an affiliate company of Honeywell Group Limited, in suit No. FHC/L/CS/ 1172/24, had claimed that over the years and at different times, it cumulatively acquired about 5,386,397,202 shares representing 15.1 per cent of FBNH overall share listed on the Nigerian Stock Exchange (NSE).
It stated that its shares purchases and dates of issue, were adequately captured by FBNH appointed Registrars – Meristem Registrar and Probate Service Ltd – and further acknowledged in the Central Securities Clearing System (CSCS), which contained its value of shares with the bank.
However, FBN Holdings Plc, in a written address in response to the Motion on Notice filed by its counsel, Babajide Koku, a Senior Advocate of Nigeria (SAN), informed the court that the plaintiff deliberately concealed the fact of an ongoing verification by the Central Bank of Nigeria (CBN) of its alleged significant shareholdings, court records show.
The bank stated that the primary purpose of instituting the suit was to circumvent the verification and the decision taken by the CBN against Barbican Capital Limited (Plaintiff).
It stated that on 7th of July, 2023, the plaintiff, in accordance with the regulatory laws and policies, notified the defendant (FBN Holdings Plc) that it had acquired units of shares and therefore held a shareholding amounting to about 4,770.269,843 units of shares.
The shareholding was about 13.3 per cent of the defendant’s shareholding.
It stated that by the Central Bank of Nigeria (CBN) guidelines for Licencing and Regulation of Financial Holding Companies in Nigeria (issued pursuant to the Central Bank Act of 2007 and Banking and Other Financial Institutions Act 2004), Financial Holding, Companies (including the Defendant) required prior approval to be sought from CBN before the purchase of a FHC’s shareholding of five per cent and above; or if the share units are purchased on the secondary market, to notify the CBN within seven days from the date of the purchase to obtain a ‘No Objection’ or approval from the CBN.
It stated that pursuant to the CBN guidelines, FBN Holdings Plc vide a letter dated 10th of July, 2023, notified the CBN of the purported new shareholding of the plaintiff which exceeded the minimum threshold of five per cent shareholding and therein sought the CBN’s approval.
The CBN responded to the defendant’s letter and requested the plaintiff to produce documents for the verification process of the shareholding.
Sequel to the receipt of the CBN’s letter, the defendant forwarded the same to Barbican Capital Ltd and recommended that the plaintiff (Barbican Capital Ltd) should provide the requested documents relevant to the verification process, but the plaintiff failed, refused and neglected in providing all the requested documents.
Consequently, the CBN, vide a letter dated 29th of January, 2024, informed the defendant that it was only able to verify only 3,110,400.619 units of shares out of the plaintiff’s then 4,770,269,843 billion shareholdings due to insufficient documents.
The defendant added that it communicated the verification status to the Barbican Capital Ltd., however, the plaintiff failed, refused and or neglected to provide the relevant documents to the CBN to date.
Meanwhile, before the CBN letter of 29th of January, 2024, the defendant had published its unaudited financial statement for the year ended 2023, in December 2023. Therein, it captured the plaintiff’s shareholding to be 4,886,062,743 in accordance with data gathered from its members’ register.
The letter reads: “Further to the verification by the CBN, (the defendant’s Regulator), the defendant has published its Audited Financial Statements for the year end 2023 and its Unaudited Financial Statements for Q1 2024.
“As a regulated entity, the Defendant revised the stated Plaintiff’s shareholding to be in accordance with the verified shareholding by CBN.
“Rather than regularise 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.”
Also, the CBN, in a 60-paragraph depose to by Orjiakor Nwabueze, a Deputy Director, Banking Supervision Department of the apex bank, stated that for the verification, the plaintiff through its parent company submitted a claim of 5,450,999,924 shares of the defendant’s shares and wanted its consent/approval for the shareholding.
He stated that the CBN (3rd party) in the exercise of its powers as regulatory and supervisory authority and before granting the consent/approval required needed to satisfy itself that plaintiff and the group are indeed owners of the shares put forward.
He added that the CBN demanded from the plaintiff and its group evidence of the purchase of shares being claimed by the plaintiff with a view to verifying the shares and satisfying itself that the shares were actually purchased or that they belong to the Plaintiff and its Honeywell Group Ltd.
