First Bank Faces Boardroom Turmoil Amidst Recapitalization Threat

Ikeja, Lagos State– The board of First Bank of Nigeria is embroiled in a new wave of disputes, raising concerns among shareholders about its potential impact on the bank’s efforts to bolster its capital base in accordance with the recent directive from the Central Bank of Nigeria for all banks operating in the country to recapitalize.

The turmoil within the bank’s governance structure has been triggered by protests from shareholders, contesting the bank’s internal governance and shareholding framework.

These grievances have escalated to legal battles, exemplified by the case of Olusegun Samuel Onagoruwa v. FBN Holdings Plc (Suit No. FHC/L/CP/1271/2022). Onagoruwa’s lawsuit challenges the authority of the Board of Directors to appoint new members amidst ongoing legal disputes.

Onagoruwa in his suit is seeking “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 July, 2022.”

The motion also seeks an order restraining the above-named non-executive directors from acting or taking any steps as non-executive directors of the bank. The current court case follows similar four other cases pending at the Federal High Court in Lagos and Abuja challenging the internal governance of FBN Limited, in addition to existing court injunctions restraining the bank from holding the last two Annual General Meetings which the bank went ahead to hold.

According to one of the workers union leaders in the bank, “as the tenure of the imposed directors is expiring, 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 further five independent directors. Where they derived the power from remains a mystery.

“Mismanagement and manipulation of shares are also being alleged in some of the cases pending against the bank while the legality of the AGMs and the imposed board of directors remain a challenge.” The union leader expressed the fear that the spate of litigations and board squabbles currently rocking the bank may bring a quick collapse of the over 100-year- old bank.

Also speaking on the development, a shareholder, Mr. Olalekan Babalola, said “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 definitely impede the bank from getting the new Central Bank’s capitilisation threshold.”

He called for urgent resolution of all court cases in the overall interest of depositors, shareholders and other stakeholders of the bank before further damage is done to the oldest Nigerian bank.