Ecobank is urging First Bank Holdings to reject the acquisition of 4.7 billion shares by a former Chairman of the bank, Dr. Oba Otudeko.

The bank allegedly raised an alarm in a letter written by its Legal Counsel, Kunle Ogunba & Associates, in which it stated that the business magnate, through his affiliated entities, owed the bank N13.5bn.

The letter said the bank had instituted several lawsuits against Honey Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell flour Mills Plc and Dr. Oba Otudeko at the Federal High Court, Lagos.

The said letter is allegedly in connection with the legal tussle between Otudeko and the bank was in view of recouping the debts owed by the highlighted business entities.

It is alleged that Otudeko personally guaranteed the loan leading to the indebtedness of the prior-mentioned companies.

The letter is said to have read in part, “Whereas, the prior-mentioned entities had initially disputed their indebtedness to our client and had consequently filed an action in court to that effect, the Supreme Court on the 27th day of January, 2023 in Appeal No. SC/CV/210/2021 delivered Judgment (Certified true copy of which is herein attached) affirming the indebtedness of the above persons to our client and further commanded that they must pay all the outstanding debts that have accrued under the loan contract between the parties; the same debt personally guaranteed by Dr. Oba Otudeko, which said indebted stood in the sum of N13, 507, 052, 417.99.”

The bank, through its lawyers, alleged that instead of taking urgent steps to repay their indebtedness in line with the mandate of the supreme court, it had come to its notice that Otudeko, who had personally guaranteed to pay the said debt, had taken steps to divert his assets/funds using a company known as Barbican Capital Limited as a special purpose vehicle.

“We state that the said Dr. Oba Otudeko has via the said Barbican Capital Limited allegedly purchased  4,770, 269, 843, (Four billion, Seven hundred and seventy million, two hundred and sixty-nine thousand, eight hundred and forty-three) shares of FBN Holdings Plc.”

The letter is said to have alleged that the bank had been informed that the said shares were purchased via 19 business entities and were currently being held by 10 different companies.

Based on the above facts, the law firm is said to be alleging that it was beyond doubt that the actions being taken by Otudeko were targeted as diverting his assets and that of the Honeywell Group of Companies through the said Barbican Capital Limited, in order to frustrate the enforcement of the judgment of the Supreme Court against him and the Honeywell companies, towards recovering his/their undisputed indebtedness to Ecobank.

“We therefore demand that you respectfully stay/reject the approval/consent/registration/ratification howsoever described or in whatsoever manner of the shares bought by the said Barbican Capital Limited held via the afforested 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, same being a flagrant violation of the extant judgment of the Supreme and which has effectively determined the outstanding indebtedness between the Honeywell Group and our client, Ecobank Nigeria Limited,” the letter said.

The appeal by the lender follows an earlier report that Oba Otudeko’s Honeywell Group had bought the largest shares of First Bank of Nigeria Holdings Plc in a cross deal worth N87.8bn.

The shares which Otudeko bought at N19 per unit were the largest volume of First Bank shares traded in a single day since 2012 when the stock exchange started publishing data.

Otudeko, who was chairman of First Bank until 2019, was believed to be making a swift comeback to become the single largest shareholder of the bank.

Billionaire Femi Otedola became the bank’s single largest shareholder in 2021 after a tussle with Hassan Odukale who was also vying for control of the bank after a leadership gap emerged from Otudeko’s exit.