Ecobank warns FBN Holdings not to accept Otudeko’s share purchase over N13.5bn indebtedness

In a new twist to the jostle for control of FBN Holdings, Kunle Ogunba and Associates, the receiver manager acting on behalf of Ecobank Nigeria Limited, has written a letter to FBN Holdings PLC, urging the company not to recognize shares transferred to Barbican Capital Limited.

The letter, dated July 7, 2023, comes in the wake of a Supreme Court judgment obtained by Ecobank against Honeywell Group Limited regarding outstanding loans owed to the bank.

The letter, authored by Kunle Ogunba and Associates, provides notification to the MD/CEO of FBN Holdings about the Supreme Court judgment that Ecobank secured against Honeywell Group Limited.

They claimed the judgment conclusively determined the indebtedness of the group to Ecobank and issued a directive for the repayment of the outstanding loans, including accrued interest.

The receiver manager also claimed Honeywell Group Limited, along with Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell Flour Mills PLC, and Dr. Oba Otudeko, Chairman of Honeywell Group, had initially disputed their indebtedness to Ecobank.

It, however, pointed to a Supreme Court ruling on January 27, 2023, which it claimed affirmed the debt and ordered the defendants to settle the outstanding amount, which stood at N13.5 billion as of January 31, 2023.

Excerpts of the letter

“Please be informed that our client instituted several lawsuits against Honeywell Group Limited, Siloam Global Services Limited, Anchorage Leisures Limited, Honeywell flour Mills PIc, and Dr. Oba Otudeko at the Federal High Court, Lagos, in view of recouping the humongous indebtedness of the highlighted entities to our client. It is particularly noteworthy that Dr. Oba Otudeko personally guaranteed the loan leading to the humongous indebtedness of the prior-mentioned companies.

“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 of January 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; being the same debt personally guaranteed by Dr. Oba O t u d e k o, which said indebtedness stood in the sum of N13,507,052,417.99 (Thirteen Billion, Five Hundred and Seven Million, Fifty -Two Thousand, Four Hundred and Seventeen Naira, Ninety-Nine Kobo) as at the 31st day of January 2023 whilst interest continues to accrue on the due debts as legally sanctioned by the Supreme Court of Nigeria, the highest court in the land, aforesaid!”

The letter expressed concerns over alleged efforts by Dr. Oba Otudeko, the guarantor of the debt “to divert assets and funds” belonging to the debtor companies.

It stated that Barbican Capital Limited, a company reportedly “incorporated on March 9, 2023, after the Supreme Court judgment”, was involved in the acquisition of 4,770,269,843 shares in FBN Holdings PLC.

It further stated that to prevent the ‘potential diversion of funds’ designated for debt repayment, Kunle Ogunba and Associates, on behalf of Ecobank’s Receiver Manager, requested FBN Holdings not to recognize the shares acquired by Barbican Capital Limited and its associated entities.

“We therefore demand that you respectfully stay/reject/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 added.

The letter also included a list of 19 companies which it claimed was where the shares from Barbican Capital were purchased from.

“The said shares purchased by Dr. Oba Otudeko albeit Honeywell Group Ltd. via Barbican Capital Limited are being held in the names of ten underlisted entities which it also listed in the letter,” it said.

Additionally, the letter demanded that FBN Holdings provide detailed information regarding the transaction’s status within a seven-day timeframe (which will lapse on the 14th of July based on the date of the letter).

“We also hereby demand that you avail us details of the status of the said transaction within the ensuing 7 {Seven}days}, noting that as a responsible Corporate entity, you are not expected to take any action which may be tantamount and/or construed to encouraging the subversion and/or violation of the extant judgment of the Supreme Court which undisputed mandated the Honeywell companies to pay their outstanding indebtedness {same debt personally guaranteed by the alter ego of the Honeywell Companies {Dr. Oba Otudeko} to Ecobank Nigeria Limited,” it said.

It is unclear if FBN Holdings will accede to this request as the bank has already notified the public via a letter to the NGX of a 13.3% acquisition of the shares as declared by Barbican Capital Ltd.