In a development set to shake Nigeria’s financial sector, the Economic and Financial Crimes Commission (EFCC) has announced the arraignment of Chief Oba Otudeko, Chairman of Honeywell Group and former Chairman of FBN Holdings, alongside Stephen Olabisi Onasanya, former Managing Director of First Bank of Nigeria. The case, centered on allegations of a N12.3 billion fraud, is scheduled for Monday, January 20, 2025, at the Federal High Court in Lagos.
Details of the Allegations
According to the charges filed by EFCC counsel Bilikisu Buhari, the alleged fraud took place between 2013 and 2014, involving credit facilities purportedly applied for by V-TECH Dynamic Links Limited and Stallion Nigeria Limited. These facilities, amounting to N5.2 billion and N6.2 billion respectively, were allegedly secured under false pretenses. The EFCC further claims that the funds were diverted to entities connected to the defendants.
Additional allegations include money laundering, with Chief Otudeko and Mr. Onasanya accused of converting N1.5 billion and N500 million for the use of Honeywell Flour Mills Plc. The EFCC asserts that these funds are proceeds of unlawful activities. The charges also encompass forgery and the falsification of documents intended to mislead First Bank.
Corporate Governance Under Scrutiny
The case underscores persistent challenges in Nigeria’s corporate governance landscape. It highlights allegations of senior executives misusing their positions to authorize loans and other financial transactions for personal gain. Industry observers note that this development could have wide-ranging implications for corporate accountability in the banking sector.
The charges come in the wake of accusations made by Adesuwa Ezenwa, a former First Bank employee, who in August 2024 alleged that unsecured loans totaling N12 billion were granted to companies linked to Chief Otudeko. Ezenwa, dismissed from the bank in 2016, has claimed she was scapegoated for the actions of senior management and has since filed a wrongful termination lawsuit.
Legal Proceedings
The arraignment will take place before Justice Chukwujekwu Aneke under case number FHC/L/20C/2025. Both defendants are expected to appear in court to respond to the multiple charges against them, which include conspiracy, money laundering, and forgery.
Otudeko’s Departure as First Bank Chairman: A Controversial Exit
Chief Oba Otudeko’s tenure as Chairman of First Bank Holdings came to an abrupt and controversial end in 2021, following a dramatic intervention by the Central Bank of Nigeria (CBN). The apex bank accused Otudeko of exerting undue influence over the bank’s operations and breaching corporate governance norms. This intervention was sparked by a dispute over the board’s decision to reinstate Dr. Adesola Adeduntan as the Managing Director of First Bank, after an earlier decision to remove him.
The CBN described the actions of the board under Otudeko’s leadership as a violation of its regulatory directives, particularly regarding the bank’s financial stability and governance structure. In a sweeping move, the central bank dissolved the boards of First Bank of Nigeria Limited and FBN Holdings, effectively removing Otudeko from his position as Chairman. The regulator cited concerns over insider loans and the bank’s deteriorating risk profile, attributing these issues to governance lapses under Otudeko’s leadership.
At the center of the controversy was the Honeywell Group, Otudeko’s conglomerate, which reportedly owed First Bank a substantial sum in non-performing loans. The CBN criticized the board for failing to adequately address these loans, raising questions about conflicts of interest and the prioritization of personal interests over the bank’s financial health. The regulator’s actions were widely seen as a necessary step to restore confidence in First Bank and ensure compliance with corporate governance standards.
Otudeko’s removal marked a significant turning point for the bank, as the CBN sought to stabilize its operations and prevent a potential crisis. The episode also highlighted broader issues within Nigeria’s banking sector, particularly the need for stricter oversight and enforcement of governance rules.
While Otudeko maintained a low public profile after his removal, the fallout from his tenure at First Bank continues to be a point of discussion, especially as new allegations of financial misconduct come to light. His departure underscored the challenges of balancing personal business interests with fiduciary responsibilities in Nigeria’s banking industry.
The EFCC’s current case against him revives lingering questions about his legacy at First Bank and its impact on Nigeria’s financial sector.
Onasanya After First Bank Exit: Real Estate Ventures with The Address
After stepping down as Managing Director and CEO of First Bank of Nigeria in 2015, Stephen Olabisi Onasanya transitioned into real estate development. He founded The Address Homes, a luxury real estate development company that focuses on delivering premium residential properties to Nigeria’s affluent class. He is often referred to as “the biggest landlord in Banana Island”, Nigeria’s most exclusive neighbourhood. The EFCC may expose Onasanya’s business to suspicions of money laundering through real estate investment.
Industry Reactions
This case is likely to draw significant attention from regulators, investors, and industry stakeholders. It comes at a time when confidence in Nigeria’s banking sector is critical for the country’s economic stability. Analysts suggest that the outcome of the trial could set a precedent for handling corporate governance issues in Nigerian financial institutions.
For Chief Otudeko, a prominent figure in Nigeria’s corporate world, and Stephen Onasanya, who once led one of the country’s largest banks, the stakes could not be higher.