21st November, 2021
Billionaire businessman Femi Otedola is now confirmed as the largest shareholder in FBN Holdings Plc, ousting board chairman Tunde Odukale.
The pendulum of majority shareholding swung to Otedola on Saturday, following the game-changing intervention of National Pension Commission (PENCOM).
PENCOM stated that Odukale could not directly or indirectly claim the 861.8 million shares or 2.41% shares owned by Leadway Pensure.
The equity belongs to the Retirement Savings Account (RSA) holders and “not any related party to the pension fund administrator,” Pencom stated.
PenCom said the clarification was essential due to “several publications in the media alleging breach of its Regulation on investment of pension fund assets by Leadway Pensure Ltd, a licensed Pension Fund Administrator (PFA), in the equities of FBN Holdings Plc.”
The clarification by Pencom slashed the shareholding of Odukale from 1.92 billion units to 1,061,712,022 units.
This gives Odukale 2.95% of the total FBNH shares of 35.8 billion.
Otedola in contrast has 5.07% ownership in the bank.
His holding consists 10,000,000 (0.03%) units of shares as direct shareholdings and 1,818,551,625 (5.04%) units of shares as indirect shareholdings through Calvados Global Services Limited.
After it became known that Otedola had acquired the largest shareholding in the bank, FBNH initially denied it.
Then it acknowledged it, only to make a volte face in a letter to the Nigerian Exchange, claiming Odukale, its current board chairman, had majority stake.
It said then that Odukale’s majority shareholding aggregated the shares being held indirectly by him.
These are in entities listed as Leadway Assurance Company Ltd, ZPC/Leadway Assurance Prem & Inv Coll Acct, Haskal Holdings Ltd, Leadway Capital & Trust Ltd, LAC Investments Ltd, Leadway Properties and Investments Ltd, Leadway Holdings (Holdco), OHO Investment
and Leadway Pensure PFA.
The inclusion of the latter raised eyebrows and provoked a query from the Exchange.
The explanation by the FBNH did not appear to have been satisfactory enough, hence the game-changing statement by PENCOM.
ASSETS IN THE EQUITIES OF FBN HOLDING PLC BY LEADWAY PENSURE LTD
The Commission’s attention has been drawn to several publications in the media alleging breach of its Regulation on investment of pension fund assets by Leadway Pensure Ltd, a licensed Pension Fund Administrator (PFA), in the equities of FBN Holdings Plc. The Commission categorically states that the allegations are NOT correct and must have been made based on the lack of understanding of the Investment Regulation issued by the Commission.
For the avoidance of doubt, the Commission wishes to clarify as follows:
1. The equity investments in FBN Holdings made by Leadway Pensure Ltd on behalf of the pension funds under its management are in the name of the pension fund and belong to the RSA holders.
2. Therefore, the equity investments in FBN Holdings Plc as stated in (1) above, cannot be appropriated or classified as shareholdings of any related party to the PFA.
3. Leadway Pensure Ltd is not in breach of the Investment Regulation by investing pension funds in the equities of FBN Holding Plc. 4. Records which can be confirmed from the Securities and Exchange Commission show that the equity investments in FBN Holdings Plc are in the name of the Pension Fund on behalf of the RSA holders.
5. For further clarification please note that:
a. Pension fund assets are managed by licensed PFAs and held in custody by Pension Fund Custodians (PFCs) on behalf of Retirement Savings Account holders and other beneficiaries of the Contributory Pension scheme (CPS), in line with the provisions of the Pension Reform Act 2014 (PRA 2014).
b. Section 69 (b) of PRA 2014 stipulates that the PFA and PFC shall take reasonable care that the management or custody of the pension funds is carried out in the best interest of the retirement savings account holders. Therefore, all investments made by licensed PFAs in eligible securities and corporate entities are “ring-fenced” and belong to the RSA holders and other pension beneficiaries. Accordingly, these pension assets cannot be appropriated directly or indirectly to any individual or related party of the PFA.
c. The provisions of Section 6.1(iii) of the Investment Regulation dealing with conflict of interest, stipulate that:
“The PFA or any of its agents are prohibited from investing Pension Fund Assets in the shares or any other securities, issued through public or private placement arrangements, by related party/person of any shareholder of the PFA”. Related persons/party as defined in Section 1.10 of the Investment Regulation “includes natural persons related by blood, adoption or marriage; legal entities one of which has control or significant influence over the other, or both of which are controlled by some other person or entity; a corporate entity where any of the aforementioned holds 5% or more beneficial interest; and any other relationship that can be reasonably construed as related persons or parties”.
6. In view of the foregoing, the Commission reiterates that there was no breach of its Investment Regulation whatsoever and invites the general public to be guided accordingly. 7. The Commission restates its commitment to fulfilling its regulatory and supervisory functions as well as ensuring the safety of pension assets and the soundness of the Pension Industry.
What is Next?
FBNH is now expected to inform the Exchange about the latest situation and then invite Otedola to head the table.