Please share
The Central Bank of Nigeria has picked holes in the removal of the erstwhile managing director of First Bank of Nigeria Limited, Adesola Kazeem Adeduntan and the hurried appointment of his replacement in the person of Gbenga Shobo.
The bank had announced Shobo as its managing director/chief executive officer effective from April 28, to take over form Adeduntan who was said to be retiring in accordance with the bank’s term limits for chief executives, having headed it since 2016.
Shobo until his appointment was the bank’s deputy managing director and held high level positions in the bank including group head (national corporates), executive vice president (retail south) and executive director (Lagos & West).
Criticizing the manner Adeduntan was removed, the apex bank said First bank did not follow due process in effecting a change of leadership, by consulting regulatory authorities, adding that the removal of Adeduntan was done about eight months before his tenure was to expire in December 31, 2021.
In a letter addressed to the chairman of the bank, dated April 28th, the Apex Bank considered the removal of the sitting managing director of the bank which has been under regulatory forbearance for about six years without a justifiable reason, as having dire consequences for the bank and also portending significant risks to the stability of Nigeria’s financial system.
It implored the chairman to explain why disciplinary action should not be meted out on the board for the hasty removal of Adeduntan without recourse to it and rushing to make a media announcement about a change of guard.
The CBN warn the chairman and by extension, the bank, to desist from making any further media announcement or comments on the matter, and gave the chairman until the end of work on Thursday, April 29th to respond to the issue via the Director of Banking Supervision.
Besides,in an earlier letter dated April 26, 2021 with serial No: BSD/GBB/CON/FBN/01/028 titled RE: AUDITED IFRS ACCOUNTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2020, and addressed to First Bank, the CBN expressed its concern that First Bank has not complied with regulatory directives to divest its interest in Honey Well Flour Mills despite several reminders.
The strongly-worded letter signed by Haruna B. Mustapha, Director of Banking Operations and copied to all Board members and Major Shareholders, wondered why after four years, the bank was yet to perfect its lien on the shares of Mr. Oba Otudeko in FBN Holdco which collaterized the restructured credit facilities for Honey Well Flour Mills contrary to the conditions precedent for the restructuring of the company’s credit facility.
Oba Otudeko is the Group Chairman of First Bank Holding Company.
“Given the bank’s failure to perfect the pledge and satisfy condition for regulatory approval, the restructuring has thus been invalidated and the credit facilities now payable immediately. Consequently, the company is required to fully repay its obligations to the bank within 48 hours failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank.
“Furthermore, the Bank notes the untenable delay in resolving the long standing divestment from Barti Airtel Nigeria Limited in line with extant regulations of CBN”
The CBN also instructed that it must divest from all non permissible entities such as Honey Well and Barti Airtel within 90 days.
Besides, First Bank was instructed to provide evidence of compliance in accordance with the timelines stated above to the Director of Banking Supervision.
Please share