ADESOLA Adeduntan’s resignation as the managing director/chief executive officer of First Bank of Nigeria Limited (FirstBank) eight months before the expiration of his tenure seems to have violated the Central Bank of Nigeria (CBN) corporate governance guidelines.
His abrupt resignation has also elicited concerns among relevant stakeholders in the financial sector.
On Saturday, April 20, The ICIR reported that Adeduntan tendered his resignation, aborting his tenure, which was supposed to expire in December.
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In his letter addressed to FirstBank Chairman, Tunde Hassan-Odukale, he wrote, “As you are aware, my contract would be expiring on 31 December, 2024, after which I would no longer be eligible for employment within the bank having served as the Managing Director/Chief Executive Officer of FirstBank for a record time of nine years.
“I have, however, decided to proceed on retirement with effect from 20 April 2024 to pursue other interests.”
However, a check by The ICIR shows that his resignation and immediate retirement breaches CBN’s corporate governance guidelines.
The apex bank had, in a subsisting circular dated July 13, 2023, issued to banks and other financial institutions, directed the banks to note the responsibilities imposed on their boards.
The guidelines, which took effect from August 1, 2023, were developed and adapted in accordance with the relevant principles and recommended practices of the Nigerian Code of Corporate Governance issued by the Financial Reporting Council in 2018, global corporate governance practices, and other related governance codes, circulars, and directives made by the CBN.
It supersedes all previous codes, circulars, and related directives on corporate governance issued by the CBN.
In Section 1.18, the guidelines state, “In the event a director elects to resign his appointment on the Board of a bank, such director shall submit a written notice of resignation addressed to the Chairman of the board ninety (90) days before the effective date of resignation.”
Section 1.20 adds, “Where a director elects to resign from the Board on account of unresolved concerns pertaining to the running of the bank, such director shall detail the concerns in a written statement to the Chairman for circulation to members of the Board.”
These guidelines indicate that Adeduntan’s resignation and his decision to proceed to retirement immediately negate the provision, pointing out that the bank and CBN owe the investing public an explanation.
A pandora’s box ousted Adeduntan in 2021, but…
In 2021, a pandora box was opened at the oldest Nigerian bank, which led to a tsunami that swept away its boards.
Adeduntan was ousted from his position and replaced with his deputy, Gbenga Shobo, but for the quick intervention of the apex bank under the leadership of former CBN Governor Godwin Emefiele.
The ICIR reported that the CBN’s disapproval of Adeduntan’s sack, its insistence on following regulatory provisions, and subsequent sanction on the bank sent a negative signal to the market and the bank’s customers.
There was also the demand for the CBN to focus on the general health of the banking sector to build confidence in the country’s financial system vis-à-vis international finance organisations.
Adeduntan was removed by the Ibukun Awosika-led board, which resulted in the sack of Awosika as FirstBank’s chairman and Oba Otudeko as FBN Holdings’ chairman.
Resignation can erode investors’ confidence.
His sudden resignation has also elicited concerns among relevant stakeholders and the public.
A financial analyst, David Adonri, told The ICIR that the resignation was suspicious, among other concerns.
He said, “His resignation, several months before the end of his tenure, is suspicious. It is capable of eroding investors’ confidence in the bank.
“The bank may need to brief the investing public on turn of events otherwise it may suffer reputational damage.”
Similarly, the national chairman of the Progressive Shareholders Association of Nigeria (PSAN), Boniface Okezie, told The ICIR that the notice of his resignation surprised shareholders.
He said, “As a shareholder, I still need prior information on his resignation. Well, he has his reason for making his decision without waiting for his tenure’s completion.
“It is left for the board to bring someone, either within or outside, to fill the vacancy created by Dr Adesola Adeduntan’s exit.”
It is unlikely that the resignation is in any way connected to the boardroom politics that played out in 2021, he added.
FBN Holdings cancelled EGM
FBN Holdings cancelled its earlier scheduled Extraordinary General Meeting (EGM) for Tuesday, April 30, on Friday, April 19, which was not unconnected to Adeduntan’s resignation.
The meeting sought shareholders’ approval to raise N300 billion following CBN’s proposed recapitalisation of banks.
The apex bank had raised First Bank’s capital base to N500 billion and another bank in that category, The ICIR reported.
First Bank appoints acting CEO
In a statement on April 21 shared by the bank’s head of Corporation Communications, Folake Ani-Mumuney, FBN Holdings said it had appointed Olusegun Alebiosu as the bank’s acting CEO, officially confirming Adeduntan’s resignation.
Alebiosu was the former chief risk officer of the bank.
“In accordance with Rulebook of The Exchange (Issuers’ Rules), we hereby notify Nigerian Exchange Limited and the investing public of the appointment of Mr. Olusegun Alebiosu as the Acting Chief Executive Officer of our flagship subsidiary, First Bank of Nigeria Limited (“FirstBank”).
“Following the resignation of the Managing Director/CEO of FirstBank, Dr. Adesola Adeduntan, the Board of Directors has appointed Olusegun Alebiosu acting CEO of the 130-year-old institution,” the statement reads.
It added that Alebiosu’s appointment took immediate effect and would be subject to the CBN’s approval.