Even though the Central Bank of Nigeria, CBN has since reinstated Adeduntan, feelers are to the effect that the last may not have been heard on the matter.
The CBN, on Thursday, wielded the big stick by sacking the entire board of the deposit money bank. Those affected in the shake-up included Chairman of First Bank, Chief (Mrs) Ibukun Awosika and the Chairman of First Bank Holding, Oba Otudeko.
The apex bank governor named Remi Babalola as the interim chairman of the Holding company, other members include, Peter Aliugo, Fatade Oluwole, Kofo Dosekun, Remi Lasaki, Alimi Abdulrasaq, Ahmed Modibo, Khalifa Iman.
According to Emefiele, Tunde Hassan Odukale will now serve as the new chairman of First Bank Limited, other members are Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Dodo, Sola Adeduntan as managing director, Remi Oni, Gbenga Sobo.
Trouble started after the Awosika-led board removed Adeduntan as managing director/ chief executive officer of First bank Nigeria Ltd and replaced him with Gbenga Shobo. The CBN later intervened, insisting that the removal was done without its approval as a regulator. Apart from that, the apex bank stated that it was premature to remove Adeduntan, eight months into his retirement from the bank. The chief executive was supposed to step down from the bank by December 2021, having been appointed in 2016.
“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.”
Sources in the apex bank told the magazine that the intervention was necessary to stop the illegality of the sacked board. “As the regulator, the CBN has the power to sack the board of any bank whenever any infraction is discovered. What the Governor did was to exercise his power under the CBN Act.,’ a source said.
But the magazine was told by insiders in First Bank that the crisis that consumed the Awosika-led board has started for sometimes, and may not be unconnected with plans by some top guns in the bank to write off over N75 billion owed by Oba Otudeko.
“The issue has polarized the management of the bank to anti and pro Otudeko elements, but the latter seemed to have upper hand in the matter and they are the ones that moved for the removal of Adeduntan,” a source said.
Another source also informed the magazine that the businessman who is the Chairman of Flower Mills Nigeria Plc has also been plotting a succession plan that would ensure that one of his children emerged as the chief executive of the bank but “this has been hampered by the CBN regulation which prescribes that a successor must be the most senior executive director from the bank. In this sense Shobo who is the Deputy Managing Director, DMD was asked to step in by the board. ”
According to the source, all efforts were made by “some persons to ensure that the N75 billion were written off as non performing loans or restructured to give the debtor a breeder, even as pressure mounted from the CBN on the management to determine the position of the loan.”
In a letter dated April 26, 2021 and addressed to Awosika, in response to FBN International Financial Reporting Standards accounts for the financial year that ended 2020, apex bank raised concerns that the issue concerning the loan was yet to be resolved.
CBN said “We further noted that after 4 years the bank is yet to perfect its lien on the shares of Mr. Oba Otudeko in FBN Holdco which collateralized the restructured credit facilities for Honeywell Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.”
The apex bank, therefore, directed the management of the bank to ensure within 48 hours that the loan facility was paid immediately. The directive from the CBN expired on Wednesday, April 28, the same day the board announced replacement for Adeduntan as chief executive.
This is not the first time the CBN had sacked the management of banks in the country, the regulator had even gone as far as removing the entire boards. Recall that former CBN Governor Lamido Sanusi fired some MDs and board members of banks in 2009 while trying to clean up the corruption mess created by the management of those banks.
The banks included Afribank PLC, Finbank PLC, Intercontinental Bank Plc, Oceanic Bank Plc and Union Bank Plc. These banks were either sold to new buyers or nationalized in some instances.
