The Boards of Directors of First Bank of Nigeria Limited and FBN Holdings Plc were suspended by the Central Bank of Nigeria (CBN) yesterday. The apex bank also reappointed 14 of the 21 directors who were sacked to the two institutions’ new boards.
Mr Adesola Adeduntan, the Managing Director/Chief Executive of First Bank of Nigeria, was also reinstated by the CBN. The former board of directors of the bank had previously fired Adeduntan as its managing director. The CBN Governor, Mr Godwin Emefiele, announced the decision to sack the directors at a press conference in Abuja, saying the apex bank had to suspend the directors for attempting to remove Adeduntan as MD without consulting the regulatory authorities.
In a statement announcing Adeduntan’s reinstatement as MD, Emefiele claimed that the CBN was pleased with the MD’s work and that those seeking to oust him were those who were uncomfortable with his insistence on adherence to regulations.
“We kept him because we’ve partnered with them since 2016,” he said. We saw a total collapse in governance and insider bullying by shareholders, and we felt we needed to stamp our authority before allowing them to proceed as MD.” “The media has been awash with commentaries on the alleged management changes at First Bank of Nigeria Ltd, FBN, and other financial institutions,” Emefiele said.
“The media has been awash with commentaries on the alleged management changes at First Bank of Nigeria Ltd, FBN, and the relevant regulatory inquiry by the Central Bank of Nigeria to the Board of First Bank of Nigeria Limited.”
As a result, it has become imperative for me to address the public in order to dispel any myths. Normally, the board of directors has the power to make management team changes, subject to CBN approval. Due to the Bank’s forbearances and close monitoring over the last five years aimed at stemming the flow of money, the CBN considers itself a key stakeholder in management changes involving FBN.
“It was therefore shocking to the CBN to learn from media reports that the Board of Directors of FBN, a systemically significant bank operating under regulatory forbearance, had made sweeping changes in executive management without engaging the regulatory authorities and/or providing prior notice.
“The FBN Board’s conduct sends a negative signal to the market about the stability of the board’s and management’s leadership, and it is in view of the above that the CBN questioned the Board of Directors about the bank’s unfortunate developments. As you might be aware, FBN is one of Nigeria’s systemically significant banks due to its historical importance, balance sheet, and liquidity.
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