BREAKING: CBN sacks First Bank directors, reinstates Adeduntan as MD

CBN orders First Bank to recover loans from Honeywell flour mills

The governor of the Central Bank of Nigeria, Godwin Emefiele, has sacked the entire members of the board of First Bank Holding and First Bank Nigeria Ltd.

Emefiele, in his speech, cited insider abuse, insider credit and breakdown of corporate governance as the reason behind the apex bank’s move.

The CBN governor further went ahead to announce that Dr Sola Adeduntan had been reinstated as the Managing Director of the interim Board.

According to Nairametrics, the Godwin Emefiele led central bank pressured First Bank behind the scenes to reinstate Adeduntan against the wishes of the Board of Directors of the bank.

Deal of the day

According to earlier reports, the Central Bank of Nigeria had issued the Board of First Bank Ltd, one of Nigeria’s oldest banks a query for the removal of its CEO citing failure of the bank to obtain its approval.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to media reports that the Board of Directors has approved the removal of the current Managing Director of the bank, Dr Sola Adeduntan, and appointed a successor to replace him. 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.”

The CBN also claimed that the tenure of Mr Adedutan was yet to expire (bank MD’s have a maximum 10 years) and that they were also not aware of any misconduct of the former MD and as such there was no justification for his removal.

However, sources in First Bank informed newsmen that the bank has a policy of replacing its MD/CEO’s every 6 years and maintained it did not break any CBN rules. The bank replaced Dr Adeduntan with Gbenga Shobo (58 years in June) as the new MD/CEO in a press release. Shobo was before now the former Deputy Managing Director of the Bank.

As the banking sector regulator, the CBN approves appointments of Bank MD/CEOs but it is unprecedented for the CBN to interfere with matters of a bank like First Bank, the oldest in the country. However, the CBN has in the past removed MD/CEOs of banks and has gone as far as firing the entire board of banks. But such cases were often preceded by a crisis in the bank and followed by the nationalization of the bank. First Bank is neither in a crisis nor being nationalized.