Still on CBN action on First Bank

By Dele Sobowale

“First Bank right to sack Adeduntan – Awosika.” News Report, May 2, 2021.

Mrs Ibukun Awosika,  former chairman of First Bank Plc, FBN, was reported in a national newspaper insisting that the Board did the right thing in sacking the reinstated Managing Director, Dr Adesola Adeduntan. Before bringing some of the published text of Mrs Awosika’s assertion, permit me to provide some background information to this article.

I have always believed that “no matter how you slice the bread, there are always two sides.” That invariably, is the situation with matters like this one – which will not soon go away. Until Mrs Awosika’s statement was released, there was nothing from the Board of FBN to provide insight into why they acted so suddenly; and apparently in contravention of banking industry regulatory position and procedures. In fact, the former Board’s position would have been dismissed as an after-thought if not for the person to whom it was attributed. I have known Mrs Awosika for years; and she is not the type to flout regulations needlessly. That gave the statement some credence. The messenger has a great reputation to protect.

Her message “As a board, we acted in what we clearly believed to be in the best interest of the bank and we had great plans and aspirations….Without any shadow of doubt, I will unequivocally state that I have always acted with honour and integrity with the utmost interest of the institution, all our stakeholders and the nation.”

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Those were the words of Mrs Awosika – for whom I have the greatest respect. But, for justice to be done, one must be prepared to be objective; and not be swayed by sentiments. It is for this reason that I find Mrs Awosika’s statement necessary but insufficient – as will be pointed out shortly. But, first a personal experience will help to illustrate my position on this controversy.

By October 1982, as the Marketing Manager for North Brewery Limited, Kano, I had introduced several innovations which propelled the brand Double Crown to the top in the North – beating Star, Gulder and Harp to second, third and fourth respectively.

 The Managing Director, MD, had privately told me that the Board had decided to start grooming me as his successor. Just 38, and puffed up with unbecoming pride, I then, on one occasion, flouted one of the brewery’s basic policies. Enemies within got to know and reported the infraction to the MD. During our meeting, I told the MD that the action taken was in keeping with the marketing guiding principle – “the customer is always right”. I saw no reason to consult anybody else; the beneficiary was our best customer by far.

After listening to me, the MD called his secretary and dictated a query to be issued to me immediately and 24 hours to respond. I did and within 24 hours I received a reprimand – reminding me that all deviations from company policy must first be discussed at top management meeting and approved before it can be implemented by the head of department. Later, the MD called me and said “My boy Dele, order is the first law in heaven.

 Your marketing principles are subordinate to that. If I allow every departmental head to do what they like, based on good intentions, this brewery will fold soon.” I learnt a great lesson about being a part of a whole institution and abiding by its regulations. My MD was right.

So, with that as my guide, I can return to the CBN-FBN case and query Mrs Awosika’s submission. My regard for her remains undiminished.

Four questions

“The road to hell is always paved with good intentions.”

On a matter such as this, one person’s or a group’s good intentions are never enough to justify taking extra-ordinary measures as the FBN board had done. Perhaps, Mrs Awosika would like to answer four questions for us.

Was Dr Adeduntan given a query; and was he allowed to defend himself in writing in response to the allegations levelled against him? If not the board had violated the first principle of justice – give the accused a fair hearing. What they did amounted to jungle justice by people in designer suits.

lWere the offences so grievous and evidence to prove them be erased if the CBN was informed as required by law? FBN exists by virtue of the Banks and Other Financial Institutions, BOFI, Decree 25, 1991, as later amended. Mrs Awosika rightly called FBN an institution. I agree. But, by their nature institutions are independent of individuals appointed to manage them. 

The managers must act according to the rules and regulations governing them. It is a fact that no MD of a bank can be appointed or removed, for any  reason whatsoever, without the approval of the CBN. Why was this regulation circumvented? The end justifies the means can certainly not be an acceptable excuse for any board of an institution to behave in a lawless manner.

l“Every precedent embalms a principle.” Has Mrs Awosika considered what would be the consequences of CBN allowing FBN to get away with flouting the regulations and doing it in such a rude manner? What will then stop other boards of banks from doing the same? Will the inevitable chaos in the banking sector be preferable to compelling FBN to obey the rules?

lMrs Awosika insisted that the board acted in the interest of all stakeholders. Yet, there are allegations of insider trading; non-performing loans resulting from companies in which some directors have substantial stakes. If so, how can a board, aware of this infraction by its directors, be claiming to act in the best interest of all stakeholders? I am a depositor and a shareholder. Insider-trading and non-performing loans are not in my interest – if they have been allowed.

I understand that Mrs Awosika, as chairman and a consummate team player, must defend her board. Those of us who know her personally would vouch for her; if the decision was hers alone to make. Her integrity alone is insufficient to absolve FBN board of all blame, especially when something stinks. The order to reinstate the MD and to retrieve insider loans leaves a bad odour; and is an indictment of all concerned. That includes CBN.

Vanguard News Nigeria 

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