But for the timely intervention of the Central Bank for Nigeria in the avoidable board squabbles at First Bank of Nigeria, the relative confidence and stability observed in the banking system in recent times would have been seriously shaken.
The royal rumble began with the news that the erstwhile Board of Directors of First Bank of Nigeria Limited, chaired by Mrs. Ibukun Awosika, had approved the appointment of Mr. Gbenga Shobo to succeed Mr. Adesola Adeduntan as the new Managing Director/Chief Executive of the bank.
Adeduntan was ousted after leading the bank since January 2016, but when still within the term limit of his tenure, which is due to expire in December 2021, he was shown the exit door.
The appointment of a new chief executive was immediately celebrated by the public and depositors, who thought the move was in tandem with good corporate governance of FBN. But little did anyone know the underbelly issues that led to the change, until the CBN, the apex regulatory institution in the financial industry, interpreted the change as a gang up against Adeduntan.
The apex bank, immediately issued the board a rather damning query over the unpopular leadership manoeuvres.
The content of the query apparently deflated the board’s ego and exposed the bank’s frailties.
The CBN had raised stern objections to the removal of Adeduntan, as his tenure ought to elapse in December 2021 – and not getting the requisite approval from the apex bank prior to the board change, further violated laid down rules.
In the CBN’s correspondence to the board, it argued that, given that FBN had been on a sort of life support in term of regulatory forbearances and other sorts of financial and regulatory support since 2016, it was particularly wrong for the former board to attempt any board changes without the knowledge of the regulatory body.
While the board was yet to offer explanation for its action, but rather perceived the inquisition by the CBN as unnecessarily meddling in its internal issues – the apex bank, understanding the consequences of the ensuing development on the financial system, as this could cause a run on FBN, decided to wield the big stick to save the situation.
The CBN removed all directors of FBN and those of its parent company, FBN Holdings Plc, with immediate effect, to stave off a boardroom crisis that had led to the retirement of Adeduntan.
The CBN Governor, Mr. Godwin Emefiele, at a press conference in Abuja, further announced the reinstatement of Adeduntan.
He said the apex bank took the actions in order to preserve the stability of the bank and protect minority shareholders and depositors.
He also announced the appointment of a former Minister of State for Finance, Mr. Remi Babalola, who replaced Mr. Oba Otudeko as Chairman of FBN Holdings.
Also in the sweeping changes, the CBN also appointed other new directors on the FBN Holdings’ board including Fatade Oluwole, Kofo Dosekun, Remi Lasaki, Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam and Peter Aliogo.
Mr. UK Eke retains his position as Managing Director of FBN Holdings.
First Bank Nigeria Limited now has as Chairman, Tunde Hassan-Odukale, who replaced Mrs. Ibukun Awosika.
Other board members are Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo and Adeduntan.
Gbenga Shobo, deputy managing director; and Remi Oni and Abdullahi Ibrahim, executive directors, are members of the reconstituted board.
The CBN had queried the erstwhile board of First Bank Nigeria Limited over the removal of Adeduntan, saying the action was without regulatory approval.
The query followed the earlier announcement of the appointment of Shobo as the new managing director/chief executive officer.
On whether Otudeko was given the opportunity to engage with the central bank before the decision to remove Adeduntan before the expiration of his tenure, Emefiele said, efforts he personally made in that regard were rebuffed. He added that the CBN had exhausted all measures to forestall the crisis after Hassan-Odukale called him to intervene in the matter.
He said the CBN would not “allow a shareholder who feels that he cannot subject himself to regulatory control and authority to remain as a director of the bank.”
He said there was no need for the initial changes at the bank, but all entreaties to Otudeko to save the situation fell on deaf ears.
Emefiele gave reasons why the CBN spared the executive directors, deputy managing directors and managing director of the bank from being removed in the shake-up.
He said having worked with them since 2016, the CBN perceived the board crisis to be more of a breakdown of governance and insider abuse by shareholders. The apex bank aims to insist on the recapitalisation of the bank and restore it not only to profitability, but also to its erstwhile leadership position in the industry.
In a recent development on the story, The Central Bank of Nigeria (CBN) approved the appointment of Alhaji Ahmad Abdullahi as non-executive Director of First Bank of Nigeria Holdings Plc and Chairman of the company to replace Mr Remi Balalola as the latter bowed out.
His resignation as Chairman of the company came against the backdrop of a contest by some significant shareholders for control of First Bank Holdings Plc.
The CBN described Babalola’s resignation as regrettable, especially given the fact that CBN’s regulatory interventions had made positive impact and increased attractiveness of the company to both local and foreign investors.
In line with its statutory mandate, the CBN remained committed to ensuring transparent governance practices at the bank and the continued independence of the chairman and other persons holding key governance positions.