The proposed N350 billion private placement by FBN Holdings Plc has ignited a debate among shareholders, raising concerns about corporate governance and transparency. While some shareholders express apprehension about the capital-raising method, others defend the move, emphasizing the positive reforms undertaken by the current leadership. The crux of the disagreement lies in the perceived exclusivity of private placements versus the broader inclusivity of public offers or rights issues.
Matthew Akinlade, former president of the Noble Shareholders Solidarity Association, believes the dissenting shareholders are being manipulated by external forces. He acknowledges the significant improvements in FBN Holdings’ performance under Chairman Femi Otedola, particularly the substantial increase in dividend payouts. While supporting Otedola’s leadership, Akinlade advocates for a more inclusive capital-raising process, favoring public offers or rights issues that allow all shareholders to participate. He emphasizes the importance of transparency and equitable access to investment opportunities.
Bisi Bakare, National Coordinator of the Pragmatic Shareholders Association of Nigeria, supports the private placement, provided it adheres to legal and regulatory guidelines. He questions the need for controversy, asserting that if the funds are legitimate and the process is approved by relevant authorities like the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN), there should be no objections. Bakare focuses on the legality and legitimacy of the process rather than the specific method of capital raising.
Boniface Okezie, National Coordinator of the Progressive Shareholders Association of Nigeria, shares a similar stance, noting that the private placement aligns with the resolutions passed during the last Annual General Meeting. He underscores the board’s commitment to raising capital through the market and their adherence to the approved agenda. However, Okezie emphasizes the paramount importance of transparency and warns against potential abuse of corporate governance if the private placement unduly favors a select few individuals or groups. He calls for the CBN to scrutinize the process, ensuring fairness and compliance with corporate governance principles.
FBN Holdings, in a statement released through its company secretary, Adewale Arogundade, reassured stakeholders that the ongoing developments would not disrupt operations. The company stressed its commitment to maintaining uninterrupted services to customers across all its subsidiaries. Furthermore, it emphasized its efforts to protect the interests of its investors and shareholders, highlighting the improved performance and increased market capitalization. FBN Holdings affirmed its dedication to corporate governance, assuring stakeholders of the highest levels of transparency and accountability in its operations. The company also reiterated its commitment to surpassing regulatory capital requirements well ahead of the deadline.
Interestingly, FBN Holdings has also launched a rights issue, offering 5.983 billion ordinary shares at N25 per share to existing shareholders. This move aims to raise an additional N150 billion. While the rights issue offers a more inclusive opportunity for existing shareholders, it remains to be seen how this will interplay with the ongoing private placement and how it will address the concerns raised about transparency and corporate governance. The ultimate impact of both the private placement and the rights issue on the future of FBN Holdings remains a subject of ongoing discussion and scrutiny. The regulatory oversight of the CBN and SEC will play a crucial role in ensuring a fair and transparent process that safeguards the interests of all stakeholders.
