Updated: CBN sacks First bank directors, reinstates Adeduntan

The Central Bank of Nigeria (CBN) Thursday sacked the board of First Bank and its subsidiary, First Bank Holdings over the removal of the Managing Director/Chief Executive of the bank, Dr. Adesola Adeduntan.

According to the apex bank, the boards’ action has negative implications for the country’s financial market. 

For First Bank, the Chairman is Tunde Hassan-Odukale,  Managing Director is Sola Adeduntan, while Gbenga Shobo is Deputy Managing Director.

Remi Oni and Abdullahi Ibrahim are Executive Director.

Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo are part of the management and board. 

For the FBNHoldco, the Chairman is Remi Babalola, while UK Eke is the Managing Director.

The board also has Dr. Fatade Abiodun Oluwole, Kofo Dosekun, Remi Lasaki, Dr Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam, Sir Peter Aliogo,

In a statement in Abuja the CBN Governor, Godwin Emefiele, said it was important to put the records straight concerning its opposition of the action of the FBN board. 

He said: “The action by the board of FBN sends a negative signal to the market on the stability of leadership on the board and management and it is in light of the foregoing that the CBN queried the board of directors on the unfortunate developments at the bank.”

On Wednesday the Board of Directors of First Bank of Nigeria Limited revealed it had appointed Gbenga Shobo as its MD/CEO via a statement by the bank’s Chairman, Ibukun Awosika.

However, in a letter from the CBN to First Bank, the apex bank noted with concern that the action was taken without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.

The CBN also claimed that the tenure of Mr. Adedutan was yet to expire (bank MD’s have a maximum 10 years) and that they were also not aware of any misconduct of the former MD and as such there was no justification for his removal.

“Given that the tenure of Dr. Adeduntan is yet to expire and the CBN was not made aware of any report from the Board indicting the Managing Director of any wrong-doing or misconduct, there appears to be no apparent justification for the precipitate removal,” the CBN said.

In his clear the air statement, Emefiele said with the strategic importance of the bank in the sector given its historical significance, balance sheet size, large customer base and high level of interconnectedness with other financial service providers, amongst others, it was necessary for   it to act. 

“By our last assessment, FBN has over 31m customers, with deposit base of N4.2trn, shareholders funds of N618bn  and NIBSS instant  payment (NIP) processing capacity of 22% of the industry.  To us at the CBN, not only is it imperative to protect the minority shareholders, that have no voice to air their views, also important, is the protection of the over 31m customers of the bank who see FBN as a safe haven for their hard-earned savings,” Emefiele said. 

However, sources within the bank say First Bank has a maximum of 6 years tenure for its MDs in line with its succession plans. They also claimed the CBN is meddling in its internal affairs as the removal of the MD is in line with its succession plans and also does not exceed CBNs maximum of 10 years.

Another source who did not want to be mentioned as they were not authorized lamented that “Adeduntan’s term formally ends in June this year after 2 terms of 3 years each. Leaving early is in line with the bank’s succession planning.

When he was appointed 6 years ago and a DMD role was created, the erstwhile FirstBank Managing Director knew the DMD would succeed him and this is what has happened. This is corporate governance at its best.”

However, the apex bank in the leaked letter also suggested that it had provided First Bank with “regulatory forbearance” which can be interpreted as a bailout subliminally indicating that it has a say in the operations of the bank.

To preserve the stability of the bank, the Apex Bank approved the immediate removal of the all directors of FBN Ltd and FBN Holdings Plc

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