The Central Bank of Nigeria (CBN) has queried First Bank of Nigeria’s Board of Directors over its abrupt removal of Managing Director and CEO y without regulatory approval.
This Day Live reported that the board of the tier-1 capital bank announced Gbenga Shobo as the new managing director and CEO on April 28.
In a statement, First Bank Chairman Ibukun Awosika said: “We are proud to announce Gbenga Shobo as our new MD/CEO. His appointment has proven the resilience of our succession-planning mechanisms and the value we place on our long-standing corporate governance practices, which underpins the institution’s enduring sustainability and the 127-year legacy.”
Given the bank’s position in the Nigerian economy, the CBN fears that the move could have dire implications for the bank and pose significant risks to the stability of the country’s financial system. Firstbank is one of Nigeria’s five tier-1 capital banks that are widely regarded as too big to go bankrupt and popularly known as FUGAZ.*
According to the report, the apex bank noted that the action was taken without due consultation with the regulatory authorities, especially considering that Adeduntan’s tenure in office had not yet come to a close.
Addressing Awosika in an official memo, the CBN demanded a comprehensive response from her to the banking regulator by close of business on April 29.
“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,” This Day Live reported CBN as stating.
First Bank Nigeria is a subsidiary of First Bank Holdings. Billionaire businessman Obafoluke Otudeko is its single majority stakeholder directly and indirectly through his controlling interest in Honeywell Flour Mills Nigeria Plc.
*FUGAZ: First Bank of Nigeria Plc (FBN), United Bank for Africa Plc (UBA), Guaranty Trust Bank (GTB), Access Bank Plc and Zenith Bank.