Barbican Capital sues First Bank over incorrect shareholding statement.

Barbican Capital Seeks to Enforce Rights Over Its 5.38 Billion (15.01%) Shares in FBN Holdings

The ongoing legal complexities surrounding Nigeria’s oldest financial institution, FBN Holdings, have intensified with the largest single shareholder, Barbican Capital Limited, filing a lawsuit to protect its rights over the shares it holds in the bank. This legal action follows a notification received by Barbican Capital indicating that FBN Holdings aimed to reduce its total shareholding in the bank, which stands at 5,386,397,202 shares (15.01%), by 40 percent.

The confusion was sparked by FBN Holdings in its December 2023 audited accounts, released in May, where it inexplicably reduced Barbican’s shareholding in the bank to 3.1 billion shares (8.67% of the lender’s total shares), down from the previously reported 4.8 billion shares (13.61%) in the December 2023 unaudited accounts published in February. A note attached to the audited accounts curiously mentioned that the 3.1 billion shares represent the total “verified” by the Central Bank of Nigeria.

In response, Barbican Capital has taken legal action, attaching a statement from the Central Securities Clearing System (CSCS) as evidence of its total share ownership. The CSCS, widely recognized as the authoritative source for verifying share ownership in the capital market, confirmed that as of May 23, 2024, Barbican owned 5,386,397,202 shares (15.01%). This number reflects an increase from the 4.8 billion shares (13.61%) reported in December 2023, following the consolidation of 1.5% of affiliated shares from Honeywell into Barbican.

Court documents reveal that FBN Holdings’ HoldCo paid dividends to Barbican Capital for all its 5,386,397,202 shares between November and December 2023 for the full year 2022, affirming Barbican’s ownership of the shares. This makes the bank’s recent actions even more perplexing.

Compounding the issue, FBN Holdings has now instructed Meristem Registrars & Probate Services Ltd, the registrars responsible for paying dividends to shareholders, to freeze dividend payments to Barbican Capital on the shares in question. This prompted Barbican’s decision to file a lawsuit against the bank.

Barbican Capital is now seeking the court’s intervention to safeguard its rights, asserting that the CSCS records clearly assign the 5,386,397,202 shares (15.01%) to its name. The company notes that no entity or third party has made any adverse claim to the ownership of these shares, nor has Barbican given notice to the defendant (First Bank) of any transfer of its shares to a third party in accordance with any law or the articles of association of the defendant.

In the originating summons filed at the Federal High Court in Lagos by Bode Olanikpekun, SAN, on July 3, 2024, Barbican Capital seeks several legal remedies, including a declaration that the number of shares reflected in the defendant’s register of members and records corresponds to the shares held by Barbican in the defendant company. Among other requests, Barbican is asking the court to affirm that its shareholding in the defendant stands at 5,386,397,202 shares as of July 1, 2024, as recorded in the CSCS’s dematerialized records.

Barbican Capital further contends that it is entitled to all the benefits of membership in the defendant company for all shares recorded under its ownership in the CSCS records. The company seeks a declaration that all the shares it holds in the defendant are its personal property, with all associated rights and privileges.

Additionally, Barbican is asking for a declaration that its shareholding cannot be altered, diminished, or misrepresented in any way that conflicts with its rightful ownership. The company is also seeking an order of perpetual injunction to prevent the defendant, its officers, agents, or anyone acting on its behalf, from continuing to alter, misstate, dissipate, or reduce Barbican’s shareholding.

In an affidavit submitted to the court, Otu Hughes, the Chief Investment Officer of Barbican, stated that the company holds 5,386,397,202 shares in the defendant as of July 1, 2024. He highlighted that FBN Holdings had acknowledged in its unaudited consolidated statement for the year ending December 31, 2023, that Barbican owned 4,886,062,743 shares, representing 13.61% of the defendant’s total shareholding.

Despite paying dividends to Barbican for these shares between November and December 2023, the defendant has consistently reported Barbican’s shareholding as only 3,110,400,619 shares in its December 2023 and March 2024 statements, a discrepancy that Barbican has repeatedly contested.

Barbican expressed concern that if the court does not intervene, the remainder of its suit may be jeopardized. The company emphasized that it has provided clear evidence of its shareholding and the defendant’s actions, which have effectively reduced or misrepresented its ownership, constituting a violation of relevant laws, including the Nigerian Constitution and the Companies and Allied Matters Act (CAMA). Barbican is urging the court to grant the reliefs sought in the originating summons.

Source: businessday