The Central Bank of Nigeria (CBN) has queried the Board of the First Bank of Nigeria Plc for removing Dr Adesola Adeduntan as the Managing Director/Chief Executive Officer, without regulatory approval.
The query is contained in a letter dated April 28, 2021 signed by the CBN Director, Banking Supervision, Haruna Mustafa. The letter was addressed to the bank’s chairperson, Ibukun Awosika.
Mustafa said that the action was taken without due consultations with the regulatory authorities, especially given the systemic importance of the commercial bank. He noted that the tenure of Adeduntan has yet to expire.
The letter reads in part: “The CBN was not made aware of any report from the board indicting the managing director of any wrongdoing or misconduct; there appears to be no apparent justification for the precipitate removal.
“We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank, which has enhanced its asset quality, capital adequacy and liquidity ratios amongst other prudential indicators.
“It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiration of his second tenure which is due on Dec. 31, 2021.”
Mustafa further stated that the removal of a sitting MD/CEO of a systemically important bank was not good. He stated:
“The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for five to six years without prior consultation and justifiable basis has dire implications for the bank and also portends significant risks to the stability of the financial system.
“In light of the foregoing, you are required to explain why disciplinary action should not be taken against the board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.
“In the meantime, you are directed to desist forthwith from making any further public/media comments on the matter. Your comprehensive response on the foregoing should reach the Director, Banking Supervision Department, on or before 5p.m. on April 29, 2021.”