Dr Sola Adeduntan
By Our Reporter
The imbroglio between the Central Bank of Nigeria and the First Bank of Nigeria Limited started shortly after the latter relieved Dr Sola Adeduntan of his position as the managing director of the bank and appointed Gbenga Shobo to replace him. This did not go down well with the apex bank culminating in the issuance of a query to the commercial bank.
According to the CBN, the Board of Directors of First Bank of Nigeria Limited appointed Gbenga Shobo as its Managing Director/Chief Executive Officer “without due consultation with the regulatory authorities, especially given the systemic importance” of the bank.
The appointment of a new CEO, Shobo, to replace the former CEO, Dr Sola Adeduntan, had been disclosed by the bank in a statement made by the bank’s Chairman, Ibukun Awosika.
The query letter from the Central Bank to First Bank, signed by CBN Director of Banking Supervision, Haruna Mustafa, revealed that the appointment of Shobo was done without the approval of the apex bank.
Mustafa wrote, “The attention of the Central Bank of Nigeria (CBN) has been drawn to media reports that the Board of Directors has approved the removal of the current Managing Director of the bank, Dr. Sola Adeduntan, and appointed a successor to replace him. The CBN notes with concern that the action was taen without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.
“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.
“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 expiry of his second tenure which is due on December 31, 2021. The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for 5 to 6 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.”
However, sources within the bank alleged that the CBN was meddling in its internal affairs as the removal of the MD is in line with its succession plans and also does not exceed CBN’s maximum of 10 years.
The CBN wielded the slege hammer by saking all the directors of First Bank of Nigeria (FBN) Limited and First Bank of Nigeria (FBN) Holdings Plc.
The sacking was announced by the CBN Governor Mr. Godwin Emefiele, at a press briefing on Thursday over the purported removal of the bank’s Managing Director, Mr Adesola Adeduntan and appointment of Mr. Gbenga Shobo by the board on Wednesday.
Emefiele, while addressing journalists, said the decision was taken to protect the financial system, following the crisis that greeted the purported changes at FBN. Adeduntan was however reinstated by the apex bank.
