Why Emefiele fired Ibukun Awosika, Otudeko, First Bank board

It is no longer news that 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.

The CBN appointed replacements for those sacked. It named Mr. Remi Babalola as replacement for Otudeko (FBN Holdings Chairman) and Tunde Hassan-Odukale as Mrs. Awosika’s replacement FBN (Chairman).

Other directors announced into the reconstituted Board are: Dr. Fatade Abiodun Oluwole; Kofo Dosekun; Remi Lasaki; Dr. Alimi Abdulrasaq; Ahmed Modibbo; Khalifa Imam; Sir Peter Aliogo and UK Eke.

The CBN listed Tokunbo Martins; Uche Nwokedi; Adekunle Sonola; Isioma Ogodazi; Ebenezer Olufowose and Ishaya Elijah B. Dodo as directors.

Remi Oni and Abdullahi Ibrahim were named executive directors.

Emefiele said: “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 three years despite several regulatory reminders.

Somehow, this is a perplexing situation that begs a lot of questions. The order to immediately remove all directors of First Bank Nig and FBN Holdings follows an earlier mandate by the CBN to call in a loan from an “Insider borrower” — Oba Otudeko of Honeywell Group, who, interestingly is also the Chairman of FBN Holdings.

For many years now, the Central Bank of Nigeria (CBN) has used Adesola Kazeem Adeduntan as a check against attempts by directors of First Bank to secure insider loans, a major source of conflict between the CBN and Oba Otudeko.

If we are to analyse the entire situation back-to-back, it may prove overwhelming to stomach. But we’ll try to summarise the fiasco chronologically in bullet points.

a) Banks are known to fuel insider loans (Insiders are either shareholders or directors in banks who may have access to information that aren’t available to the public, and also leverage their influence to benefit from financial services provided by the bank such as loans, etc. These services may be difficult to access by outsiders.)

b) Meet Oba Otudeko, the Owner of Honeywell Group Nig. (Are you familiar with the Honeywell noodles commercial? Really nice theme song. But let’s not digress) Oba Otudeko is also the Chairman of FBN Holdings (a non-operating financial holding company of First bank)

c) Apparently, there’s a long-standing debt by Honeywell Group and other bank insiders according to CBN Governor, Godwin Emefiele (the CBN claims it’s been issuing regulatory reminders for the bank to restrict its credit since the past 3 years. And some reports state the loan is about NGN75 billion)

d) Meet Dr Adesola Adeduntan, MD/CEO of First Bank Ltd (In the heat of the pressure from CBN, the board unanimously removed him from his position)

e) CBN wasn’t happy with this removal, stating the bank acted unjustifiably since his tenure hasn’t expired. Given this action, coupled with First bank’s long-standing insider borrower issue, the apex bank retaliated by firing its entire board, reinstating Dr Adeduntan as the MD and re-instituting new board of directors to take over.

f) Nairametrics says some of its sources confirm that the now-defunct board initially fired Dr Adeduntan, because he, like the CBN, disapproved of the ongoing credit mishaps within the bank, and has been helping to drive some of the restructuring initiatives approved by the CBN.

e) Although the specifics haven’t been made public, but the likes of Remi Oni, Executive director/Public sector group, Abdullahi Ibrahim, Deputy Managing director, Olugbenga Francis Shobo, and the Chairman of the board, Ibukun Awosika are among the board members removed by the CBN.

f) The CBN governor cited insider abuse, insider credit and breakdown of corporate governance as the reasons for sacking the board of Nigeria’s oldest bank.