The Central Bank of Nigeria (CBN) has issued guidelines for the protection of the rights of Shareholders of Banks in Nigeria.
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A section of the Corporate Governance Guidelines for Commercial Banks, Merchant, Non-Interest and Payment Service Banks and Financial Holding Companies in Nigeria laid our ways the apex banks seeks to protect the rights of Shareholders.
According to the guidelines seen by Investogist, no individual, group of individuals, their proxies or corporate entities shall own controlling interest in more than one bank.
The apex bank went further to outline that it’s (CBN’s) prior approval and No Objection shall be sought and obtained before any acquisition of shares of a bank (including through the capital market), that would result in equity holding of five per cent (5%) and above, by any investor.
A recent ownership tussle at FBN Holdings Plc (NGX: FBNH), the parent company of First Bank of Nigeria, had seen Barbican Capital Limited, a company affiliated to Otudeko, a former Chairman of FBN Holdings acquire 13.3% equity stake in the company, making him the single largest shareholder of the bank.
The CBN guideline went further to state that where the CBN has an objection on any acquisition, notice of the objection shall be communicated to the bank, and the bank shall notify such investor(s) within forty-eight (48) hours.
The guideline also said that Government’s direct and indirect equity holding in a bank shall not
be more than ten per cent (10%), which shall be divested to private investors within a maximum period of five years from the date of investment.
The Central Bank allowed for a two years window for existing investments above five years from the effective date of the guideline to comply with the provisions. The effective date of the guidelines is August 1, 2023.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
