Shareholders of First Bank, Nigeria’s oldest financial institution have continued to kick over ongoing plans by the chairman, Femi Otedola, to launch a N350 billion private placement following the conclusion of the rights offer.
The Scrutiny gathered that some shareholders of the bank believe that while the private placement targets specific investors through an offer of security or shares, it is a ploy by Otedola and his cronies to consolidate their grips on the bank.
The development is coming after the parent company of the bank, First HoldCo PLC, just concluded raising N150 billion through a rights issue as part of the ongoing recapitalisation directed by the Central Bank of Nigeria (CBN).
Kicking against the private placement, some of the aggrieved shareholders informed our correspondent that following the conclusion of the rights offer, if there is need to raise additional capital, it should be done by way of rights issue to give all existing shareholders fair and equitable chance to participate and not through a private placement “which will only benefit some selected few”.
They argued that since inception, FirstBank is a “national financial institution” which cannot be hijacked by any individual.
When contacted, Tunde Lawanson, Head, Marketing and Corporate Communications of First Hold Co Plc declined comment on the issue. According to him, nothing has been decided yet.
“There is no comment whatsoever on it. Nothing has been decided on the issue, so there is nothing to say yet”.
When asked by the planned emergency meeting being canvassed by some shareholders, Lawanson said he wasn’t aware of it.
Also speaking with TheScrutiny, Omordion Ambrose, the Chief Research Officer of Investdata Limited said the private placement is in order as it is another legal way for the bank to generate money to meet the N500 billion capital base directed by the CBN.
“For me, it shows that the regulators are giving them the room to do so because they need to recapitalise to meet their N500 billion capital base as requested by CBN . If as at now, after the rights issue or public offer, they didn’t meet the target of N500 billion, there is another legal way they can raise funds. If they think the private placement will give them the needed money, then it is in order”.
“It is in order. The only issue there is that the ‘big boys’ can use that avenue to buy more shares which will then give them the power to control the bank” he said.
