By: Ogine Victor
Barely 24 hours after the Executive Board of First Bank of Nigeria Plc appointed Mr. Gbenga Shobo as its new Managing Director/Chief Executive Officer, the Central Bank of Nigeria has faulted the legitimacy of the appointment, saying the tenure of the former is yet to expire.
This development was contained in a letter dated April 28, 2021, signed by the CBN Director, Banking Supervision, Mr. Haruna Mustafa, and addressed to the bank’s Chairman, Mrs. Ibukun Awosika.
In the letter obtained by NAN, Mr. Mustapha stated that the action taken by First Bank Executive Board did not follow due consultations with the regulatory authorities, especially given the systemic importance of the commercial bank.
A part of the letter reads:” “The CBN was not made aware of any report from the board indicting the managing director of any wrongdoing or misconduct; there appears to be no apparent justification for the precipitate removal.
“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 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 taking any further public/media comments on the matter. Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5 p.m. on April 29, 2021,” he said.
It would be recalled that on Wednesday, NAN reported that First Bank announced the appointment of Mr. Gbenga Shobo as the new Managing Director and Chief Executive Director.
Awosika said that the appointment was subject to all regulatory approvals.
The Central Bank of Nigeria has queried the Board of the First Bank of Nigeria Plc for removing Dr Adesola Adeduntan, the Managing Director/Chief Executive Officer, without regulatory approval.
Mustafa said that the action was taken without due consultations He noted that the tenure of Adeduntan has yet to expire.
Mustafa noted that the removal of a sitting MD/CEO of a systemically important bank was not good.
NAN reports that First Bank on Wednesday announced the appointment of Mr Gbenga Shobo as the new Managing Director and Chief Executive Director.
Awosika said that the appointment was subject to all regulatory approvals.
