Nigeria’s premier banking group, FBN Holdings (FBNH) Plc, has begun auditing of its operations in a process that will provide the general investing public with the verified state of the company’s financial statements and other related corporate information, including its shareholding structure.
External auditors are examining the financial statements of the holding group for the nine-month period ended September 30, 2021. While interim auditing is a routine exercise for many large corporates, FBNH’s latest audit comes in the wake of ongoing controversy over the shareholding structure of the holding group for Nigeria’s oldest banking group, FirstBank of Nigeria (FBN) and its former subsidiaries.
The board of the holding group indicated at the weekend that it expects the conclusion of the interim audit and approval process before the end of this month.
Traditionally, interim audit and approval process for financial institutions include the audit by external auditor, presentation of any audit query if any to the board and management, review of board and management’s responses, submission of final audit, board’s meeting and approval of final audit, submission of the approved final audit to the primary regulator, in the case of FBNH, Central Bank of Nigeria (CBN); approval process by the primary regulator, receipt of primary regulatory approval and submission or uploading of the primary regulator-approved final audited report to the Nigerian Exchange and Securities and Exchange Commission (SEC) for immediate onward release to the general investing public.
“Premised on the foregoing, the trading window for dealing in the company’s shares remains closed to all insiders and their connected persons until twenty-four hours after the release of the audited financial statements,” the board of FBNH stated.
Insiders, in general financial markets’ usage, include directors, middle to top management staff, professional parties and contractors with access to information and their connected firms, family members and concerned associates.
Section 315 of the Investments and Securities Act, No. 29, 2007 (ISA) describes an insider as any person who is or is connected with the company in one or more capacities, including as a director of the company or a related company.
Rule 400(3) of the Securities and Exchange Commission (SEC) Consolidated Rules, 2013 provides that an insider is an individual “who is connected with the company during the preceding six months in one of the following capacities,” including as a “director of the company or a related company,”
The Rulebook of The Exchange, 2015 (Issuers’ Rules) also provides that an insider is an individual who is connected with the company during the preceding six months in one of many capacities including as a director of the company or a related company.
Extant rules at the stock market allow a company that seeks to audit its interim quarterly period, a period of 60 days to submit such report. The deadline for the submission of the third quarter report of FBNH is thus November 29, 2021.
The audit is however expected to further highlight possible timeline for changes in the shareholding structure of the group.
FBNH had last week affirmed that Mr. Tunde Hassan-Odukale holds the single largest equity stake in the holding group, followed by Mr. Femi Otedola, as financial services regulators continue review of recent share acquisitions by Otedola.
FBNH stated that its current shareholders’ structure indicated that there were two shareholders with “material” or significant or substantial shareholdings of five per cent and above. These significant shareholders included Hassan-Odukale with a total shareholding of 5.36 per cent and Otedola with 5.07 per cent.
The affirmation was sequel to request for clarifications and additional information by NGX. The Nation had reported that Nigeria’s financial services regulators would be launching intensive regulatory assessment to review acquisition of a major stake in FBN Holdings by Otedola as well as recent transactions by directors of the of the company.
In a regulatory filing signed by FBNH’s company secretary, Mr. Seye Kosoko, the group noted that it had earlier on October 18, 2021 filed appropriate notification of the shareholdings of Hassan-Odukale as a director and insider of FBN with the NGX and other relevant regulators.
The group explained that while Hassan-Odukale holds 4.16 percent equity stake through direct and indirect shareholdings, the chairman of FBN also has 1.20 per cent equity stake ascribed to him in line with extant rules on significant shareholder’s influence in related companies.
According to the group, the first part of the shareholding classification of 4.16 percent are shares held directly and indirectly by Hassan-Odukale while the second part of the shareholding classification of 1.20 percent are shares ascribed to him due to his influence and having significant control.
The group stated that the “cumulative equity stake” of Hassan-Odukale is the summation of all his direct, indirect and ascribed shareholdings.
Contrary to insinuations in some quarters that an oil and gas and telecommunication business mogul also holds significant shareholder in the group, FBNH stated that there was no official record of any other significant shareholders beyond the duo of Hassan-Odukale and Otedola.
“We have not received notification from any other shareholder on the attainment of five per cent shareholdings. We assure the Exchange that we will make regulatory disclosure upon receipt of such notification from any shareholder.
“In line with applicable regulations, FBNHoldings will continue to notify the appropriate agencies and authorities whenever we receive any notice of significant shareholding by shareholders and the company’s registrars,” FBNH stated.
The group explained that the rationale behind including the 1.05 per cent of Leadway Pensure PFA’s holdings as part Hassan-Odukale’s shareholdings was because he has “an indirect interest in Leadway Holdings Limited that holds 69 per cent equity in Leadway Pensure PFA and as such exerts significant influence and control over Leadway Pensure. Consequently, the company ascribed these shareholdings to him.”
(Nation)
