A Corporate Heist
Oba Otudeko, the new majority shareholder of FirstBank and the founder of Honeywell, owes Eco Bank 13.5 billion naira in debt.
The money was actually given to Honeywell, a fast-moving consumer goods company that he founded, and Oba Otudeko personally guaranteed the loan.
The loan was disbursed in 2013, 10 years ago, and the original amount disbursed was 5.5 billion naira.
A disagreement ensued between Oba Otudeko and Eco Bank on the interest rate.
The matter dragged on until, at a point, the billionaire industrialist said he wouldn’t pay back any Kobo again, so Eco Bank should do their worst.
Having run out of options on how to recover their 5.5 billion as of that time, Eco Bank approached the Federal High Court in Lagos, praying for the court to grant their prayers and help them recover the money owed.
The matter dragged on for 10 years, all the way from the Federal High Court to the Supreme Court.
In January, the Supreme Court of Nigeria, in a landmark decision, ordered the liquidation of Honey Well and Oba Otudeko in order for Eco Bank to get their money back.
Another problem is that the money being contested is no longer 5.5 billion naira; Ecobank has now adjusted the debt they are owed to 13.5 billion naira from 5.5 billion naira, factoring in inflation and interest accrued.
The problem for Eco Beck is that there is no longer a company called Honeywell, which was the collateral in 2013 to liquidate.
It does not exist again.
Flour Mill of Nigeria bought the company from Oba Otudeko for a sum of 82 billion, so technically, the company does not belong to Oba Otudeko again; it belongs to Flour Mill of Nigeria.
More so, Oba Otudeko’s wealth is not easy to trace; he scattered his wealth using SPVs (special purpose vehicles) and proxies, so you can’t easily trace an asset or money that he owned.
Eco Bank has been in a state of confusion and quagmire since this year over how to recover the 15.5 billion naira Oba Otudeko owes them.
To show Eco Bank’s desperation to recover the money, Eco Bank dragged Flour Mill of Nigeria into Honeywell and Oba Otudeko’s liquidation process and case in court, which is going on at the moment.
Flour Mill’s crime is that they bought Honeywell from Oba Otudeko even when they were warned, so they must be liquidated too.
To be fair to Eco Bank, they warned Flour Mill not to buy Honeywell, but you know, Flour Mill has a coconut head, and they chose not to listen, so they deserve whatever is coming at them from the whole drama.
Eco Bank was in this state of urgency only for the news to break on Friday that the person owing them and who does not want to pay just consolidated his shares by buying First Bank shares worth 82 billion naira and is therefore the new major shareholder of First Bank.
Angered and miffed by the audacity of Oba Otudeko and the fact that he has money to pay back the loan but rather chose to go and buy First Bank Sheres, Eco Bank has written a letter to First Bank,advising FBN Holdings, the parent company of First Bank of Nigeria Limited, against approving or accepting the investment due to outstanding “humongous indebtedness” by the company and its founder, Dr. Oba Otudeko.
Ecobank argued that instead of taking steps to repay their indebtedness in line with the mandate of the Supreme Court, “it has come to our notice that Dr. Oba Otudeko (being the prime mover and alter ego of the debtor companies who personally guaranteed to repay the said debt) has taken steps to divert his assets and funds and those of the debtor companies.
“This he has done by using a company known as Barbican Capital Limited (a special purpose vehicle), which was recently and hurriedly incorporated after the judgment of the Supreme Court (specifically on the 9th day of March, 2023). We state that the said Dr. Oba Otudeko has via the said Barbican Capital Limited ‘allegedly’ purchased an aggregate of 4,770,269,843 (Four Billion, Seven Hundred and Seventy Million, Two Hundred and Sixty-Nine Thousand, Eight Hundred and Forty-Three) shares of FBN Holdings Plc.” Eco Bank said
But the problem is that the new Majority owners of First Bank, Barbican Capital Limited, do not have the name of Oba Otudeko as the owner or director of the company; rather, the company belongs to Oba Otudeko’s two older kids, who are the directors.
Oba Otudeko is not the same person as his first daughter and his first son, the two directors of the new majority owners of First Bank, so I wonder how Eco Bank hopes to solve this problem and what they want First Bank to do in this instance.
Interesting days ahead for the battle of the souls of Nigeria’s oldest bank, First Bank
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