April 25, 2024

By Kelechukwu Mgboji InvestAdvocate

Lagos (INVESTADVOCATE)-FBN Holdings faces a prolonged delay in convening an Extraordinary General Meeting (EGM) statutorily necessary to secure shareholder assent for capital raising, following a ruling by a Federal High Court in Lagos mandating parties to the suit to maintain the status-quo.

In July 2022, the court restrained FBN Holdings, the parent entity of First Bank, from conducting any Annual General Meetings (AGM) pending the resolution of a lawsuit filed by shareholder Olusegun Onagoruwa in 2021.

On April 17, legal representatives of Onagoruwa petitioned the court to halt FBN Holdings’ Extraordinary General Meeting scheduled for April 30, 2024.
Subsequently, the company annulled the April 30 gathering, originally intended for shareholders to deliberate on a proposal to raise ₦300 billion ($231 million).

Justice Akintayo Aluko, on Wednesday, upheld the 2022 ruling barring the bank from holding its AGM.

FBN Holdings now confronts a pressing time constraint to amass fresh capital, contingent upon shareholders’ consent at an extraordinary general meeting, prior to the Central Bank’s deadline of April 2026.

This is particularly significant given the protracted nature of legal proceedings in Nigeria, where court cases can endure for up to two decades.

Nigeria’s leading banks are mandated to raise $2.6 billion within 24 months subsequent to the Central Bank’s issuance of new minimum capital requirements.

The regulatory framework precludes banks from utilising accrued earnings or indebtedness to fulfil the enhanced capital prerequisites.

Following the cancellation of the April 30 assembly, Adesola Adeduntan, CEO of First Bank, tendered his resignation citing a pursuit of alternative endeavours, eight months before the expiration of his tenure. Adeduntan had steered the institution for a record nine years. Olusegun Alebiosu has been appointed as the interim CEO, pending the Central Bank’s ratification.