CBN kicks against appointment of new FBN’s MD/CEO, Shobo

The appointment of Gbenga Shobo as the new Managing Director/Chief Executive Officer (CEO) of First Bank of Nigeria has met a brick wall with the Central Bank of Nigeria, who said the appointment was done without due process.

On Wednesday the Board of Directors of First Bank of Nigeria Limited revealed it had appointed Shobo as its MD/CEO via a statement by the bank’s Chairman, Ibukun Awosika.

However, in a letter from the CBN to First Bank, the apex noted with concern that the action was taken without due consultation with the regulatory authorities, especially given the systemic importance of First Bank Ltd.

The CBN also claimed that the tenure of Mr. Adedutan was yet to expire (bank MD’s have a maximum 10 years) and that they were also not aware of any misconduct of the former MD and as such there was no justification for his removal.

“Given that the tenure of Dr. Adeduntan is yet to expire and 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.”

However, sources within the bank said First Bank has a maximum of 6 years tenure for its MDs in line with its succession plans. They also claimed the CBN is meddling in its internal affairs as the removal of the MD is in line with its succession plans and also does not exceed CBNs maximum of 10 years.

Another source who did not want to be mentioned as they were not authorized to do so lamented that “Adeduntan’s term formally ends in June this year after 2 terms of 3 years each. Leaving early is in line with the bank’s succession planning.

When he was appointed 6 years ago and a DMD role was created, the erstwhile FirstBank Managing Director knew the DMD would succeed him and this is what has happened. This is corporate governance at its best.”

However, the apex bank in the leaked letter also suggested that it had provided First Bank with “regulatory forbearance” which can be interpreted as a bailout subliminally indicating that it has a say in the operations of the bank.

Sources within the bank also allude without proof that the involvement of the central bank in this matter may also be due to First Bank’s support of Flutterwave which may have angered CBN.

It is unclear how this matter will end but stemming from experience, we will not be surprised if this matter ends in court in a few days. The Central Bank has often controversially delved into board-related issues such as appointments and even firing of all or some Board members for what it perceives as severe infractions.