The Importance of CBN in the Latest FBNH Acquisition By Barbican Capital Limited

Barbican Capital Limited has made it official about its acquisition of a major interest in FBN Holdings. The total transaction weighs about 4.77 billion ordinary shares or 13.3% of FBN Holdings' total 35.9 billion issued shares.

Barbican Capital Limited was founded in March 2023 and it’s owned and controlled by Oba Otudeko's children, whose names are Oyeleye Foluke and Otudeko Obafemi Adedamola.

Upon the authorization from the central bank on this transaction Barbican will become the largest single stakeholder in FBN Holdings. And this means that other stockholders' stakes have not grown beyond what was indicated in the 2022 audited financial statement.

Top shareholders in FBN Holdings are  Femi Otedola who purchased 5.57% of the bank's shares as of March 2023, while Tunde Hassan-Odukale owned 4.42%. According to sources, both shareholders may have grown their position in the bank holding company.

However, the recent purchase of FBN Holdings shares by Mr. Oba Otudeko, the former bank chairman, has caused unrest amongst prominent shareholders of FBN Holdings, which is known to be Nigeria's oldest bank.

Due to Otudeko's emergence as the bank's top shareholder, a meeting was carried out on Sunday to arrange for a response on the transaction.

This meeting talked about the importance of managing changing dynamics and defending their interests inside the bank.

It was also stated that Ecobank Nigeria Limited has urged that the transaction be rejected, further complicating the matter. Ecobank's claim is based on an alleged N13.5 billion debt owed by Otudeko.

This demand intensifies the power struggle by raising worries about the financial responsibilities and potential liabilities involved with the purchase.

The reaction of regulatory agencies such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), and the Nigerian Exchange (NGX) is critical in assessing the legitimacy and approval of FBN Holdings' recent acquisition of shares.

The Central Bank of Nigeria is expected to conduct a thorough examination of the material purchase by its "fit and proper" regulations.

These standards ensure that the persons and businesses engaged in the acquisition fulfill the requisite integrity, competency, and financial soundness criteria.

Furthermore, under its guidelines on "lifting the veil of beneficial owners," the CBN has the right to track the origins of funds for the transaction.

Regardless of the registered owners or businesses involved, this examination would reveal the genuine beneficial owner of the shares.

This examination fosters openness and guarantees that the purchase complies with regulatory obligations.

Furthermore, Rule 4.1 of the Guidelines for Licencing and Regulation of Financial Holding Companies in Nigeria states that when 5% of a holding company's shares are acquired in the secondary market, the holding company must seek approval from the CBN within seven days of the acquisition.

This rule emphasizes the significance of regulatory supervision and notice for large share purchases.

The engagement of regulatory agencies like the CBN, SEC, and NGX would aid to protect stakeholders' interests and maintain the financial system's integrity.

Their evaluation and judgment on the purchase will have a substantial influence on the transaction's legitimacy and acceptance or rejection in the best interests of stakeholders, which include not only stakeholders but potential investors and depositors of the bank.

With over 31 million clients and deposits totaling N7.6 trillion, the bank's stability and soundness are critical.