The Central Bank of Nigeria has explained why it on Thursday fired all the directors of First Bank of Nigeria Limited and First Bank of Nigeria Holdings Plc and appointed new persons to fill the positions.
CBN Governor, Godwin Emefiele, announced the removal of the First Bank directors at a press briefing in Abuja saying the decision was taken by the management of CBN, the apex regulator of Nigeria’s financial sector, following the query which the CBN had earlier issued the Board of First Bank for removing Adesola Adeduntan as the Managing Director/Chief Executive Officer, without regulatory approval.
Emefiele said, “Following further review of the situation and in order to preserve the stability of the bank so as to protect minority shareholders and depositors, the management of the CBN, in line with powers conferred on it by the Banks and Other Financial Institutions Act 2020, has approved and hereby directs as follows:
“The immediate removal of all the directors of First Bank of Nigeria Limited and First Bank of Nigeria Holdings Plc.”
After removing the directors, the CBN governor announced the appointment of new persons as directors in FBN Ltd and FBN Holdings Plc.
For the newly appointed directors of holding company, Emefiele named them to include Remi Babalola, as chairman and UK Eke as managing director.
Other directors are
Dr Fatade Oluwole, Kofo Dosekun, Remi Lasaki, Dr. Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam, and Peter Aliogo.
Emefiele named the chairman as Tunde Hassan-Odukale, while Adesola Adeduntan was reinstated as managing director.
Other directors of the bank include Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, and Ishaya Elijah B. Dodo.
Gbenga Shobo was named Deputy Managing Director; Remi Oni, executive director; and Abdullahi Ibrahim, executive director.
Emefiele explained that the CBN begged the board members of First Bank severally not to remove Adeduntan but the pleas were ignored.
He said, “This decision came to us as a surprise. This bank has been under regulatory forbearance intervention since 2016.
“The truth is that even before we issued the query yesterday to chairman of the board, copied to all the directors and major shareholders, the initial attempt to remove the Managing Director, Dr. Adesola Adeduntan, was leaked to me by an interested party in the course of the board meeting.”
Emefiele added, “When I heard about this, I had course, first to call the chairman of the holding company, Mr. Oba Otudeko. He picked my call, I reminded him about the regulatory intervention and forbearance regime in the bank.
“And that, the decision to make such sweeping changes would require prior approval of the CBN. I pleaded with him to step down the decision and that we could hold a meeting to discuss the issues.
“Given that the current managing director was running on a tenure that is expected to expire on December 31, 2021 and as far as we are concerned, there was no need for such changes.”
The CBN boss stressed that given the apex bank’s regulatory intervention and forbearance regime, it felt that if there was any misconduct on the part of Adeduntan, he should have been queried adding that the CBN should have been informed and the apex bank should have been a party to such an action to punish Adeduntan.
“We were not informed of any misconduct, neither were we informed of any query,” the CBN helmsman stated.
“We suspect, I like to use the word suspect, that it was because he had stood his grounds on certain decisions that are not in favour of major shareholders of the bank, that they felt and thought he should be removed,” Emefiele said.
He added, “This is against what we stand for. This is a bank where depositors fund is almost 10 times shareholders fund. Our interest is to protect depositors and minority shareholders who have no voice in this business.
“We granted of the regulatory forbearances to enable the bank work out its non-performing loans through provision for write-off of at least N150bn from its earning for four consecutive years.
“We would not sit idle and allow this to continue. I spoke to Oba Otudeko; he refused to grant my entreaties. I had course to call two of his major shareholders to call him to ask the board not to take such decision without the approval of the CBN.
“He refused to pick the calls of the these shareholders who are co-owners of the bank. I called him a second time and heard on another phone one of the shareholders on another line listening to me and begging Dr. Otudeko that he should nor take that decision.
“He insisted on taking that decision. We hung up the phone. I sent that shareholder back to the office of Oba Otudeko to appeal to him to please suspend the decision to remove the MD. He refused to see the shareholder.”
“So we didn’t have any choice but to take this decision,” Emefiele stated.
He added, “As we speak, the chairman of the bank, Ibukun Awosika, was queried. We are yet to receive any response. In any case, I would imagine that that response is no longer necessary.”
On why the bank decided to spare the MDs, Emefiele said, “We felt that because we’ve worked with them from 2016 till now, what we saw was more of a breakdown of governance and insider abuse by shareholders and we felt that we needed to stamp our authority to reappoint them and give them a chance to continue to remain executive directors, deputy managing director and managing director of this bank.”
“However, the CBN considers itself a key stakeholder in management changes involving FBN due to the forbearances and close monitoring by the bank over the last five years aimed at stemming the slide in the going concern status of the bank,” he stated.
He noted that it was therefore surprising for the CBN to learn through media reports that the board of directors of FBN, a systemically important bank under regulatory forbearance regime, had effected sweeping changes in executive management without engagement and/or prior notice to the regulatory authorities.
He said, “The action by the board of FBN sends a negative signal to the market on the stability of leadership on the board and management and it is in the light of the foregoing that the CBN queried the board of directors on the unfortunate developments at the bank.”
“By our last assessment, FBN has over 31 million customers, with deposit base of N4.2tn, shareholders funds of N618bn and NIBSS instant payment processing capacity of 22 per cent of the industry,” Emefiele said.
He added, “To us at the CBN, not only is it imperative to protect the minority shareholders that have no voice to air their views, also important, is the protection of the over 31 million customers of the bank who see FBN as a safe haven for their hard-earned savings.”
Emefiele said the CBN stepped in to stabilise the bank in its quest to maintain financial stability, especially given FBN’s systemic importance.