Central Bank sacks board of directors of FBN Holdings, reinstates Dr. Sola Adeduntan

The Governor of the Central Bank of Nigeria, Godwin Emefiele has announced the sack of the entire board of directors of FBN Holdings Plc and its subsidiary First Bank of Nigeria Ltd. The announcement was made via a television broadcast in the early evening of Thursday, April 29.

Godwin Emefiele cited insider abuse, insider credit and breakdown of corporate governance as the reason behind the sacking of the board of FBN Holdings, Nigeria’s largest bank.

The CBN governor further announced the reinstatement of Dr Sola Adeduntan as the Managing Director of the interim Board after he was removed by the now sacked board of First Bank Plc.

According to the Governor, “First Bank of Nigeria is one of Nigeria’s systemically important banks given its historical significance, balance sheet size, large customer base and high level of interconnectedness with other financial service providers.”

Following the sacking of the board, the CBN appointed the following people as directors of the holding company, FBNH, Dr. Fatade Abiodun Oluwole, Kofo Dosekun, Remi Lasaki, Dr Alimi Abdulrasaq, Ahmed Modibbo, Khalifa Imam, Sir Peter Aliogo, and UK Eke (Managing Director) as Directors of FBN Holdings Plc. Remi Babalola was appointed as Chairman.

For First Bank Ltd, Tokunbo Martins, Uche Nwokedi, Adekunle Sonola, Isioma Ogodazi, Ebenezer Olufowose, Ishaya Elijah B. Dodo were appointed directors while Tunde Hassan-Odukale was appointed Chairman.

The CBN also confirmed the reinstatement of Sola Adeduntan as Managing Director; Gbenga Shobo as Deputy Managing Director; and Remi Oni and Abdullahi Ibrahim as Executive Directors of First Bank of Nigeria Limited.

Gbenga Shobo was just yesterday announced as MD/CEO of First Bank setting the stage for the CBN intervention; while Remi Oni would soon proceed on terminal leave having been appointed Chairman of PENCOM.

In the press briefing, Mr Emefiele stated that the apex bank had been keeping close tabs on First Bank over the past 5 years having discovered that the bank was in “grave financial condition with its Capital Adequacy Ratio (CAR) and Non-Performing Loans ratio (NPL) substantially breaching acceptable prudential standards.”

According to Emefiele, “The insiders who took loans in the bank, with controlling influence on the board of directors, failed to adhere to the terms for the restructuring of their credit facilities which contributed to the poor financial state of the bank. The CBN’s recent target examination as at December 31, 2020 revealed that insider loans were materially non-compliant with restructure terms (e.g. non perfection of lien on shares/collateral arrangements) for over 3 years despite several regulatory reminders. The bank has not also divested its non-permissible holdings in non-financial entities in line with regulatory directives.”

Emefiele also reassured First Bank of Nigeria depositors, creditors and other stakeholders of the bank of its commitment to ensure the stability of the financial system insisting that it acted to protect 31 million customers, minority shareholders of First Bank of Nigeria Ltd.

Credit: Nairametrics