The Central Bank of Nigeria has issued the Board of First Bank Ltd, certainly one of Nigeria’s oldest banks a question for the removing of its CEO.
The letter was addressed to the bank’s chairperson, Ibukun Awosika.
On Wednesday the Board of Directors of First Bank of Nigeria Limited revealed it had appointed Gbenga Shobo as its Managing Director/Chief Executive Officer (CEO). The appointment was disclosed in a press release made by the financial institution’s Chairman, Ibukun Awosika.
However, in an obvious leak, a letter from the central financial institution to First Bank revealed a question from the previous to the latter expressing concern that the appointment of Shobo was executed with out the approval of the apex financial institution.
“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 taken without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.”
Also Read: First Bank Appoints Shobo As New MD/CEO
“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 Dec. 31, 2021,” he added.
The CBN additionally claimed that the tenure of Mr. Adedutan was but to run out (financial institution MD’s have a most 10 years) and that they had been additionally not conscious of any misconduct of the previous MD and as such there was no justification for his removing.
“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 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 making any further public/media comments on the matter. Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5p.m. on April 29, 2021,” he said.
