CBN questions First Bank over removal of Adetutan as CEO

Nigeria’s Central Bank, CBN has queried First Bank Ltd’s board over the removal of the current CEO without due consideration and presentation to the banking regulator, which clearly goes against the rules guiding banks and other financial institutions and against the new BOFIA Act, 2020.

The Board of Directors of First Bank of Nigeria Limited had Wednesday released a statement through the Chairman Dr Ibukun Awosika, relieving Dr Adesola Adedutan of his position as Managing Director/Chief Executive Officer and appointed Mr Gbenga Shobo in his stead which clearly goes against the rule that banks under forbearance and liquidity support cannot remove CEO without due compliance.

The CBN has noted with concern that the action was taken without due consultation with the regulatory authorities and stated that themove has “dire implications for the bank and also portends significant risks to the stability of the financial system.”.

Speaking on the recusant undertone this may have for First Bank, a reliable source told 774ngr news “First things first, First Bank abruptly terminated the contract of their MD. Under extant regulations (BOFIA), banks inform the CBN on appointments of their new MD, boards, etc. You can see it in dailies. They seek approval from CBN before it is publicly announced. For example Fidelity has sought the approval of the CBN before Segun was replaced.”

“For First Bank, it appears that Otudeko and Sola Adedotun had fallen out, so they did not inform CBN. CBN just saw it in the news like everyone else, hence the CBN asking FBN to explain why they took that action. Another thing from the CBN’s point of view is that FBN has been through a lot. They have existing issues that CBN has provided a lot of support for. So the least FBN could have done is to have inform CBN on its desire to change its management.

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Mr George Asonumaka, an investment banker said, “CBN approves who is appointed MD down to GM. They are the regulator. You can’t bring quacks or inexperienced persons to run a deposit money bank. It only gives approval not saying they can determine who you appoint but they have their criteria so whomever you must appoint will have to satisfy that.”

“Also when you want to fire you have to give them cogent reason why you have to fire the person. This is because they are after job security and management stability. Remember you are banking money of the general public. You can’t be acting like a power drunk emperor”.

The query, which was dated April 28, 2021, was signed by CBN Director on Banking Supervision, Haruna Mustafa and addressed to the bank’s Chairman, Mrs. Ibukun Awosika. First Bank is required to send back a comprehensive report detailing why disciplinary action should not be carried out against the bank, on or before 5p.m. on April 29, 2021 to the apex bank.

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