The Central Bank of Nigeria (CBN) has picked holes in the replacement of Dr. Adesola Adedutan as Managing Director of First Bank of Nigeria (FBN) . CBN said the action was taken without due consultation with the regulatory authorities and asked the Chairman of FBN to explain before the close of work on Thursday why disciplinary action should not be taken against her.
The CBN’s reaction came on Wednesday shortly after the Chairman of FBN, Mrs Ibukun Awosika, announced the appointment of Mr Gbenga Shobo, the bank’s Deputy Managing Director (DMD), as the Managing Director/Chief Executive Officer designate.
Awosika added that Shobo succeeds Dr Sola Adeduntan, who would be leaving the bank in accordance with its term limit for chief executives, after successfully leading the institution since January 2016.
“These decisions will take effect from today, April 28, 2021. 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 DMD.
“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 FirstBank as the preeminent bank in our chosen market, delivering value to our stakeholders,” Awosika said.
Awosika said the bank also appointed Mr Abdullahi Ibrahim as DMD, while Mr Ini Ebong, Mr Segun Alebiosu, Mr Seyi Oyefeso and Mrs Bashirat Odunewu were also appointed as executive directors.
CBN in a letter signed by the Director of Banking Supervision, Haruna B. Mustafa , however said “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. 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 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 letter added that “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”.
The banking regular thereafter directed that ” In the 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”.
It also asked FBN to “In the meantime desist forthwith from making any further public/media comments on the matter”.
The apex bank instructed that a comprehensive response on the matters raised be placed before the Director, Banking Supervision Department on or before 5 pm on Thursday, April 29, 2021.