First Bank Sued by Largest Shareholder Barbican Over Reduction in Shares

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Barbican Capital Ltd, the largest shareholder of First Bank Nigeria Holdings (FBNH), has filed a lawsuit against the bank in a Federal High Court in Lagos over a sudden reduction in its shareholding. The case, referenced as suit no. FHC/L/CS/1172/24, was filed by Barbican’s legal representative, Bode Olanipekun, SAN.

According to Barbican Capital, it has been steadily acquiring shares in FBNH over several years, culminating in a total of approximately 5.4 billion shares, which account for 15.1% of FBNH's overall shares listed on the Nigerian Stock Exchange (NSE). The investment firm asserts that these shares were properly documented by FBNH’s appointed registrars, Meristem Registrar and Probate Service Ltd, and reflected in the Central Securities Clearing System (CSCS).

Barbican further claimed that FBNH acknowledged its significant shareholding in its Unaudited Consolidated Financial Statement for the fiscal year ending December 31, 2023, which recorded Barbican’s stake as 13.61% of the bank’s total shares. The firm also noted that it received dividend payments for all 5.4 billion shares between November and December 2023 for the financial year ending December 31, 2022, further validating its ownership claim.

However, Barbican stated it was shocked when FBNH, in May 2024, published a notice titled "Substantial Interest in Shares," indicating that Barbican's shares had been slashed to 3.1 billion, representing just 8.6% of the bank’s total shares. The firm insists it has never sold any of its shares and criticized FBNH’s Unaudited Financial Statement for the quarter ending March 31, 2024, which also contradicted the CSCS statement of May 2024, showing that its shares had increased to the original 5.4 billion.

Barbican said it attempted to alert FBNH to what it describes as a deliberate alteration of its shareholding, but the bank allegedly tried to deflect responsibility by pointing to the Central Bank of Nigeria (CBN).

In its lawsuit, Barbican is seeking several legal remedies, including declarations that:

1. It remains a member of FBNH by virtue of its shareholding.

2. The number of shares recorded in FBNH’s member register accurately reflects its total shareholding of 5.4 billion shares as of July 1, 2024.

3. It is entitled to all membership benefits for the shares recorded in the CSCS.

4. Its shareholding cannot be altered, reduced, or misrepresented by FBNH in any way.

5. FBNH lacks the authority to incorrectly state or deal with Barbican’s shareholding in a manner inconsistent with the actual number of shares held.

Barbican is also seeking a perpetual injunction to prevent FBNH from further altering or misrepresenting its shareholding.

At the suit’s initial hearing on July 19, 2024, before Justice A.O Faji, FBNH’s attorney, Buchi Obulue, moved an application to include the Central Bank of Nigeria (CBN) as a party in the lawsuit. The court granted this application, with no objection from Barbican’s lawyer. The case has been adjourned to October 2, 2024, for the hearing of the originating summons.