The Central Bank of Nigeria (CBN) has queried First Bank of Nigeria Plc over the replacement of the former Managing Director and Chief Executive Officer of the bank, Adeola Adeduntan with Gbenga Shobo.
The apex bank in a letter addressed to the Chairman of First Bank, Ibukun Awosika, said regulatory approval was not sought and Adeduntan had not completed his tenure before the bank appointed a new CEO.
The letter signed by the Director of Banking Supervision for CBN, Haruna B. Mustafa, stated that the apex bank was not aware of any misconduct that would have warranted the removal of Adeduntan.
First Bank had on Wednesday named Gbenga Shobo as the new Managing Director and Chief Executive Officer with effect from April 28, 2021.
The letter read in part, “The CBN notes with concern that the action was taken without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.
“Given that the tenure of Dr. Adeduntan is yet to expire and the CBN was not made aware of any report from the Board indicting the Managing Director of any wrong-doing 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.
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“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.”
The financial regulator stated that the removal of a sitting MD/CEO of a systemically important bank without prior consultation has dire implications for the bank and the financial system.
The letter read, “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 5 pm on April 29, 2021.”
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