Board Of First Bank To Face CBN Penalty Over Unauthorised Removal Of CEO

Mr Godwin Emefiele, Governor Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN) led by Mr Godwin Emefiele as Governor is angry with the Board of First Bank of Nigeria Plc over the removal of Dr. Adesola Adeduntan, the Managing Director/Chief Executive Officer from his role without seeking for approval from the CBN.

The CBN query to First Bank Board is contained in a letter dated April 28. 2021, and signed by the apex bank Director, Banking Supervision, Haruna Mustafa. The letter, which was addressed to the bank’s Chairman, Ibukun Awosika wants the board to explain why it should not be sanction by the CBN.

The letter said the action was taken without due consultations with the regulatory authorities, especially given the systemic importance of First Bank in the Nigerian financial system and noted that the tenure of Adeduntan is yet to expire.

“The CBN was not made aware of any report from the board indicting the Managing Director of any wrongdoing or misconduct; there appears to be no apparent justification for the precipitate removal. We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank, which has enhanced its asset quality, capital adequacy, and liquidity ratios amongst other prudential indicators.

“It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiration of his second tenure, which is due on December 31, 2021,” the letter said, adding that the removal of a sitting MD/CEO of a systemically important bank was not good for the image of the financial sector in the country.

Oba Otudeko (left) and Mrs Ibukun Awosika were both on the First Bank Board that was sacked by the CBN on Thursday April 29, 2021

“The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for five to six years without prior consultation and justifiable basis has dire implications for the bank, and also portends significant risks to the stability of the financial system. In light of the foregoing, you are required to explain why disciplinary action should not be taken against the board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.

“In the meantime, you are directed to desist forthwith from taking any further public/media comments on the matter. Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5 p.m. on April 29, 2021,” he said.

According to reports, First Bank on Wednesday, April 28, announced the appointment of Gbenga Shobo as the new Managing Director and Chief Executive Director. Awosika said that the appointment was subject to all regulatory approvals. She said that Shobo succeeds Adeduntan who would be leaving the bank in accordance with the bank’s term limit for its chief executive after successfully leading the bank since January 2016. The decision will take effect from today, April 28, 2021,” Awosika said.

“We are proud to announce Gbenga Shobo as our new Managing Director/Chief Executive Officer. His appointment has proven the resilience of our succession planning mechanisms and the value we place on our long-standing corporate governance practices, which underpin the institution’s enduring sustainability and 127-year legacy. Shobo has had a successful career in the bank and elsewhere culminating in his appointment as the deputy managing director in 2016 prior to his appointment as the managing director.

“The board is confident that Shobo has the experience and the understanding of the bank and the know-how to lead the bank through this next phase of growth, which is focused on positioning First Bank as the preeminent bank in our chosen market, delivering value to our stakeholders,” she added.

Awosika said that the bank also appointed Abdullahi Ibrahim as the Deputy Managing Director. According to her, Ini Ebong, Segun Alebiosu, Seyi Oyefeso, and Bashirat Odunewu were also appointed as executive directors. She noted that these decisions were subject to all regulatory approvals.

However, all these appointments were reversed by the CBN who latter sacked the entire Board of First Bank on April 29, 2021, a development the CBN Governor himself confirmed.

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