Board Of First Bank Is Rocked By Fresh Disputes That Could Jeopardise Recapitalisation

Shareholders of First Bank of Nigeria fear that the ongoing disputes within the board will undermine the bank’s efforts to fortify its capital base in response to the Central Bank of Nigeria’s recent order requiring all banks in the nation to recapitalize.
The current crisis at the bank is the result of shareholder protests against the bank’s internal governance and shareholding structure, which have prompted some of them to take their complaints to court. One such case is Olusegun Samuel Onagoruwa v. FBN Holdings Plc (Suit No. FHC/L/CP/1271/2022), which calls into question FBN’s Board of Directors’ ability to appoint new members to fill vacancies.
In his suit, Onagoruwa seeks “an order setting aside, nullifying, annulling and/or quashing the appointments and approvals of Mr. Olusola Adeeyo, Mr. Viswanathan Shankar, Mrs. Remilekun Adetola, Mr. Anil Dua, and Mrs. Fatima Ibrahim as Non-Executive Directors of First Bank of Nigeria Limited made on the 20th day of March, 2024, by FBN Holdings Plc during the pendency of this action and in defiance of the subsisting order of this Honourable Court made on the 15th day of M
The motion also seeks an order prohibiting the aforementioned non-executive directors from acting or taking any action as non-executive directors for the bank. The current court case follows four other cases pending in the Federal High Courts of Lagos and Abuja challenging FBN Limited’s internal governance, as well as existing court injunctions prohibiting the bank from holding the previous two Annual General Meetings, which it did.
According to one of the bank’s workers union leaders, “as the tenure of the imposed directors expires, the same illegitimate Management of FBN, whose legitimacy is being challenged, has gone further, during the pendency of the cases challenging their competence to lead the bank, to arbitrarily appoint additional five independent directors. It is unclear where they obtained their power.
“Some of the cases pending against the bank allege mismanagement and share manipulation, while the legality of the AGMs and the imposed board of directors is still being challenged.” The union leader expressed concern that the bank’s current spate of litigation and board disagreements could lead to its swift demise.
In response to the development, a shareholder, Mr. Olalekan Babalola, stated that “it is imperative for the authorities to find a solution to this lingering crisis as Nigeria cannot afford another major bank’s collapse at this critical time when President Bola Tinubu is working hard to revamp the nation’s crumbling economy.” This is because the current crisis will almost certainly impede the bank’s ability to meet the new Central Bank’s capitalisation threshold.”
He urged the immediate resolution of all court cases in the best interests of the bank’s depositors, shareholders, and other stakeholders, lest the oldest Nigerian bank suffer further damage.