[dropcap]T[/dropcap]he legal dispute surrounding Nigeria’s oldest financial institution, FBN Holdings, has intensified as Barbican Capital Limited, the bank’s largest single shareholder, initiates legal proceedings to safeguard its ownership rights.
The lawsuit comes in response to FBN Holdings’ controversial decision to reduce Barbican’s substantial shareholding from 5.39 billion shares to 3.1 billion shares.
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Barbican Capital decided to take the matter to court after receiving a notification indicating that FBN Holdings intended to reduce its total shareholding by 40 percent.
This move has raised serious concerns, particularly after FBN Holdings’ December 2023 audited accounts, released in May, significantly altered Barbican’s reported shareholding.
In the audited accounts, FBN Holdings stated that Barbican Capital’s shares had been reduced from 4.8 billion shares, or 13.61 percent of the bank’s total, to 3.1 billion shares, or 8.67 percent.
A note in the audited accounts claimed that the 3.1 billion shares represented the amount verified by the Central Bank of Nigeria, sparking further confusion and prompting Barbican’s legal action.
In its lawsuit, Barbican Capital presented a statement from the Central Securities Clearing System (CSCS), the central securities depository for the Nigerian capital market, as evidence of its full shareholding.
According to this statement, Barbican held 5.39 billion shares (15.01%) as of May 2024, increasing from 4.8 billion shares (13.61%) in December 2023. This increase resulted from the recent consolidation of Honeywell’s affiliated shares into Barbican.
The lawsuit also highlights that FBN Holdings paid dividends to Barbican Capital for the full 5.39 billion shares between November and December 2023, further validating Barbican’s ownership of these shares.
Despite this, FBN Holdings has since directed its registrars, Meristem Registrars & Probate Services Ltd, to freeze dividend payments to Barbican, prompting the latter’s legal action to protect its rights.
Barbican Capital is seeking several declarations from the Federal High Court in Lagos, including confirmation that its shareholding stands at 5.39 billion shares and that this cannot be altered or reduced.
The company is also asking for an injunction to prevent FBN Holdings from diminishing its shareholding and to uphold its rights as a shareholder.
The legal battle exposed the complexities and high stakes involved in the ownership of shares in Nigeria’s financial sector, particularly in a longstanding institution like FBN Holdings.
Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.
