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CBN, First Bank on collision course over removal of MD/CEO

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Sources in First Bank accuse CBN of meddling in its internal affairs.

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The Central Bank of Nigeria has issued the Board of First Bank Ltd, one of Nigeria’s oldest banks a query for the removal of its CEO.

On Wednesday the Board of Directors of First Bank of Nigeria Limited revealed it had appointed Gbenga Shobo as its Managing Director/Chief Executive Officer (CEO). The appointment was disclosed in a statement made by the bank’s Chairman, Ibukun Awosika.

However, in an apparent leak, a letter from the central bank to First Bank revealed a query from the former to the latter expressing concern that the appointment of Shobo was done without the approval of the apex bank.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to media reports that the Board of Directors has approved the removal of the current Managing Director of the bank, Dr. Sola Adeduntan, and appointed a successor to replace him. The CBN notes 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 informed Nairametrics that 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.

“First Bank followed its corporate governance framework in its change of leadership and appointment of new executive directors. No Managing Director in the 127 years history of FirstBank has ever attempted a tenure extension. Why now?”

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.

“We are particularly concerned because the action is coming at a time the CBN has provided various regulatory forbearances and liquidity support to reposition the bank which has enhanced its asset quality, capital adequacy and liquidity ratios amongst other prudential indicators. It is also curious to observe that the sudden removal of the MD/CEO was done about eight months to the expiry of his second tenure which is due on December 31, 2021. The removal of a sitting MD/CEO of a systemically important bank that has been under regulatory forbearance for 5 to 6 years without prior consultation and justifiable basis has dire implications for the bank and also portends significant risks to the stability of the financial system.”

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.

“Is this payback for FirstBank for supporting and enabling Flutterwave and other tech companies? FirstBank MD-Designate, Gbenga Shobo created a revolution by partnering with Flutterwave and other tech companies. Is this payback? The CBN Governor must be called to order. This is not a banana economy. We need to preserve the FirstBank heritage with its seamless succession planning.”

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.

And as expected, it ended its query to the bank with a threat to the board if the decision to remove Adeduntan is not reversed.

“In light of the foregoing, you are required to explain why disciplinary action should not be taken against the Board for hastily removing the MD/CEO and failing to give prior notice to the CBN before announcing the management change in the media.”

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Aviation

FG TO PARTNER WITH HUNGARIAN COMPANY TO PRODUCE AIRPLANES IN NIGERIA

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In line with its desire to bequeath sustainable growth and development in the aviation sector, the Federal Government has expressed its readiness to partner with the Magnus aircraft Manufacturing industry in Hungary to establish an assembling plant and begin to manufacture in Nigeria from start to finish before the end of the Buhari administration.

The Minister of Aviation Senator Hadi Sirika expressed the interest when he paid an inspection visit to the Magnus Aircraft Industry in Pogany, Hungary.

He explained that “if we venture we them, we may start with assembling plant and later manufacturing”, adding that the Magnus aircraft is an aeroplane that is good for Military training, has an aerobatic manoeuvre and is made of fully composite materials high strength and very lightweight.

Sirika being briefed by officials of Magnus

A statement by the Director of Public Affairs Ministry of Aviation, Dr James Odaudu described Aerobatics as the practice of flying manoeuvres involving aircraft attitudes that are not used in normal flight. Aerobatics are performed in airplanes and gliders for training, recreation, entertainment, and sport.

The statement further quoted Sirika as saying he was very satisfied with the features and more than willing to facilitate the production of the aeroplanes in Nigeria, saying one of the significant features of the Magnus aircraft is that it uses normal car petrol and outperforms any training aircraft of its kind”

The Minister who was at the facility on the invitation of the Company, said the proposed partnership with the aircraft manufacturer will be subjected to further analysis to verify the market and government willingness to partner with a significant amount of money and logistics.

He emphasized that the local production of aircrafts in the country will facilitate the growth of Nigeria as a regional aviation super power as it will also come with maintenance and repair facilities that will attract patronage from neighbouring countries.

Sirika trying his hands on the Magnus aircraft

According to him, the present administration has created an attractive environment for international investors in Nigeria, especially in the aviation sector, with the ongoing implementation of the development roadmap which places emphasis on public private partnerships.

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Request For Qualification for the Concession of Airport Terminals

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AIRPORTS CONCESSION GATHERS MOMENTUM, AS FG RELEASES REQUEST FOR QUALIFICATION

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The Federal Government through the Ministry of Aviation in compliance with the Infrastructure Concession Regulatory Commission (ICRC) and National Policy on Public-Private Partnership (N4P) has released a request for qualification for the concession of four International Airport terminals and related services.

In the document signed by the Permanent Secretary, Federal Ministry of Aviation, Engr. Hassan Musa, the four major commercial airports; Nnamdi Azikiwe International Airport Abuja; Murtala Muhammed Internatıonal Aırport Lagos; Malam Amınu Kano Internatıonal Aırport and Portharcourt Internatıonal Aırport and surrounding communities are intended to develop into efficient, profitable, self-sustaining, commercial hubs which will create more jobs and develop local industries through a Public-Private Partnership (PPP) arrangement.

A statement by the Director of Media and Public Affairs Ministry of Aviation,  Dr James Odaudu quotes the document saying “The Federal Government of Nigeria (FGN) through the Ministry of Aviation is inviting bids from reputable Airport Developers/Operators/Financiers/Consortia for prequalification for the Concession of selected Airports Terminals under a Public-Private Partnership (PPP) arrangement”.
It further stated that “The airport’s terminal concession is one of the critical projects under the Aviation Sector Roadmap of the FGN and fits well within the scope of the Ministry’s strategic plan for the sector. The execution of this project is meant to achieve the Federal Government’s objective in terms of air transport value chain growth by developing and profitably managing customer-centric airport facilities for safe, secure and efficient carriage of passengers and goods at world-class standards of quality”.

Hadi Sirika
Minister of Aviation

According to the document the eligibility requirements are; “Full names of firm/consortia; Evidence of Company Registration; Ownership structure of bidding entity; Audited Financial Statements; Sworn affidavit; Power of Attorney/Board Resolution and in the case of a consortium, evidence in the form of a letter of association agreement”.

It explained that to be prequalified for consideration as a prospective PPP partner for the project, the prospective firms/consortia must have technical, operational and financial capability including; Experience in the Development and Operation of an International Airport and Cargo Terminals; Evidence of Financial Capacity in support of the company or consortium’s ability to undertake the airport concession illustrated by a minimum net worth of NGN 30 billion and Letters of Support from credible financial institutions in support of the consortium’s ability to manage and operate the Airports terminals.

“The modalities for application submission shall be in a sealed envelope containing 7 copies neatly bound (1 original and 6 copies clearly marked) of the completed RFQ and the required supporting documents, which shall be clearly marked “RFQ for the Concession of Airport Terminals’ and address to the Permanent Secretary, Federal Ministry of Aviation, Federal Secretariat Complex Abuja.

The Application shall be submitted either physically or by pre-paid, registered/certified mail or courier to the address provided. The submission shall be on or before 15:00 hours Nigerian Time (14.00hrs GMT) on 27th September 2021”. It explained.
The request emphasis that the RFQ is the pre-qualification stage of the procurement process for the Project in which interested parties are required to meet the pre-qualification requirements specified in the RFQ package. Only pre-qualified parties will proceed to the Request for Proposal (RFP) stage and shall execute a Non-Disclosure Agreement prior to issuance of the RFP documents.

The document urged the interested international parties to partner with local firms in compliance with the requirements of the Federal Government of Nigeria local content development policy while submission of RFQs through electronic media will not be considered.

The document also states that additional information, can be found on the website: https://nacp.aviation.gov.ng

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