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Confusion as CBN reinstates Adeduntan as First Bank MD, dissolves board


Motolani Oseni And Philip Clement

Central Bank of Nigeria (CBN) has reinstated Sola Adeduntan as the Managing Director and Chief Executive Officer of First Bank of Nigeria Limited.

Governor of the CBN, Godwin Emefiele, who made this announcement at a press briefing on Thursday, also ordered the immediate removal of all directors of FBN Limited and FBN Holdings Plc.

He, however, announced the constitution of an interim board for the tier-1 lender.

Remi Babalola is the interim chairman of FBN Holdings Plc while other members are Peter Aliugo, Fatade Oluwole, Kofo Dosekun, Remi Lasaki, Alimi Abdulrasaq, Ahmed Modibo and Khalifa Iman.

The apex bank, however, directed U.K. Eke to remain as the Group Chief Executive Officer of FBN Holdings Plc.

Tunde Hassan-Odukale is the new chairman of First Bank Limited while other members are Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Dodo, Sola Adeduntan (managing director), Remi Oni, Gbenga Sobo and Abdullahi Ibrahim.

A financial expert, Prof. Uche Uwaleke supported the decision to dissolve the board of directors.

Uwaleke told The Daily Times that that he supported the CBN wielding the big stick on any bank that flouts the rules.

According to Uwaleke, BOFIA 2020 gives the CBN powers to replace Boards of Banks.

For instance, Section 12 (e) of the BOFIA 2020, provides that the CBN Governor has powers to even revoke the licence of a bank If it conducts its business in an unsound manner and its directors engage in unsafe practices.

“A banking system regulator should be seen to take the issue of corporate governance very seriously.

“In this particular matter, my take is that the apex bank is in order in view of the fact that it gave the Board of First Bank the opportunity to defend itself.

“It behoves the CBN now to communicate the reasons for its action to members of the public and provide reassurance of banking system stability,” he added.

On Wednesday, the CBN had queried the board over the removal of Adeduntan allegedly without due consultation with regulatory authorities.

“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 letter signed by Haruna Mustafa, CBN’s director of banking supervision, read.

“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.”

However, some observers said aspects of the CBN’s query to the former board indicted the reinstated MD/CEO, thus creating confusion.

The Board of FBN Limited had approved the appointment of Mr. Gbenga Shobo, currently Deputy Managing Director, as its new Managing Director/Chief Executive Officer-designate.

The lender after its board meeting on Wednesday explained that the decision was subject to all regulatory approvals.

Gbenga was to succeed Adesola Adeduntan, who will be leaving the bank in accordance with its tenures limit for its chief executives, after successfully leading it since January 2016.

Finance and economy experts are disgusted with efforts by the CBN’s interference in the FBN succession process.

CBN has been enmeshed in many controversies in the country bordering on alleged financial misgovernance. But CBN, in a letter to FBN, claimed adequate consultations were not made before the changes and that Adedutan’s tenure was supposed to end in December this year.

One concerned analyst asked: “Should the CBN Governor be playing God? This is about how the plan to influence First Bank failed.

“First Bank followed its corporate governance framework in its change of leadership and appointment of new EDs.

“CBN should allow Nigeria’s oldest bank’s transition to go smoothly.”

Another observer remarked: “Why is the CBN going after First Bank now? Is CBN pushing another agenda?

“Should the CBN be meddling in an internal process? What is CBNs reason for and interest in a prolonged stay at the end of a tenure?

“It’s only because the attempt to insist on a third term was rebuffed. The tenure ends this year. Best practice is six months to the end. Succession is announced and you go on leave.

“In this Covid year, after the AGM, the bank decides to go with it, six weeks earlier. How can that be a big deal?

“CBN’s letters simply sought to undermine the bank’s corporate governance when it should be applauding it.

“And bringing up the transactional issues at this time is in utter bad faith and inimical from a regulator that is supposed to be unbiased but is upset at a failed arm-twist.

CBN had earlier issued some letters on pending transactions, thus dabbling into the process whereas the practice is appointment by the board before seeking ratification from the regulatory agency, like in the recent cases of Fidelity Bank, Zenith Bank, Union Bank etc.

“So what’s special about this one,” the analyst asked.

However, announcing Shobo’s appointment, Mrs Ibukun Awosika, the former chairman, explained: ” We are proud to announce Gbenga Shobo as our new MD/CEO.

His appointment has to prove the resilience of our succession planning mechanism and the value we placed on our long-standing cooperation, governance practice, which underpinned the institution enduring sustainability and 127-year legacy.

“Gbenga has had a successful career in the bank and elsewhere, culminating in his appointment as Deputy Managing Director (DMD) in 2016.

Prior to his appointment as DMD, he was the Executive Director overseeing the retail banking/Public sector Businesses in the Lagos and West Directorate and was hitherto the Executive Director overseeing the retail business in the South Directorate.

“As part of his responsibility for retail banking, he has been instrumental in developing and growing the bank agency baking business, which today, is the market leader in agency banking leveraging partnership and best in class technology and bringing service to millions of unbanked and underbanked customers in Nigeria, and across various countries where we operate through our African subsidiaries.

“The Board is confident that Gbenga has the experience and 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 markets, delivering value to our stakeholders.”

Also appointed was Abdullahi Ibrahim as Deputy Managing Director. Mr. Ini Ebong, Mr Segun Alebiosu, Mr Seyo Oyefeso and Mrs Bashirat Odunewu were also appointed as Executive Directors. These decisions are subject to all regulatory approvals, she stated.

Awosika added: “I would like to thank Sola for his dedication and effort during his helm at the bank, and before as CFO.

The Board and I are grateful for his leadership of the bank over the last five and a half years and believe that the strong foundation created during his term will provide an excellent basis for our continued success. We wish him well in his future endeavours outside the First Bank.”

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Ihesiulo Grace

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