First Bank: CBN Rejects Succession’ Coup’ Against Adeduntan

By Fola James

The Central Bank of Nigeria, CBN has rejected the appointment of Gbenga Shobo as the Managing Director designate of First Bank when the tenure of the incumbent, Adesola Adeduntan has yet to expire. The first generation bank announced the replacement of Adeduntan on Wednesday.

The bank also appointed Abdullahi Ibrahim as the Deputy Managing  Director apart from other directors who have now been appointed to work with new management, expected to assumed office anytime from now.

But in a letter addressed to the bank’s Chairman, Mrs Ibukun Awosika, dated April 28, 2021 signed by the CBN Director, Banking Supervision, Haruna Mustafa, and obtained by the News Agency of Nigeria, NAN. The CBN said the appointment was carried out without regulatory approval.

Mustafa said that the action was taken without due consultations with the regulatory authorities, especially given the systemic importance of the commercial bank.

The apex bank said in the letter that “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.

“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 making any further public/media comments on the matter. Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5p.m. on April 29, 2021,” the Godwin Emefiele-led regulator said.

Awosika  had while announcing the appointment of Shobo said the action was subject to all regulatory approvals, noting that the tenure of Adeduntan has expired, having been appointed into the position in 2016.

“We are proud to announce Gbenga Shobo as our new Managing Director/Chief Executive Officer.His appointment has proven our 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 the managing director. 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 First Bank as the preeminent bank in our chosen market, delivering value to our stakeholders,” Awosika said.