Fresh details have emerged as to why the Central Bank of Nigeria, CBN sacked the Chairman of the Board of First Bank Holdings, Mr. Oba Otudeko and other board of directors.
The apex bank, in letter obtained by Thepledge and addressed to the erstwhile First Bank Board Chairman, Ibukun Awosika dated April 26, 2021, had queried the bank for failing to comply with regulatory directives to divest it’s interests in Honeywell Four Mills, owned by Otudeko despite several reminders.
The CBN disclosed in the letter that for four years, First Bank was yet to perfect it’s lien on the shares of Otudeko in FBN Holdco which collaterised the restructured credit facilities for Honeywell Flour Mills contrary to the conditions to the conditions precedent for the restructuring of the company’s credit facility.
The CBN, therefore, issued a 48 hours ultimatum for the credit facility to be repaid to the bank, warning that if would not fail to take regulatory actions against those behind the approval of the facility.
The letter read, “Given the bank’s failure to perfect the pledge and satisfy condition for regulatory approval, the restructuring has this been invalidated and the credit facilities now payable immediately.
“Consequently, the company is required to fully repay it’s obligations to the bank within 48 hours failing which the CBN will take appropriate regulatory measures against the insider borrower and the bank.”
The CBN also raised eyebrow at the delay in resolving the long outstanding divestment from Bharti Airtel Nigeria Limited, which Otudeko had also headed as a chairman.
“Accordingly, you are required to divest the equity investments in all non-permissible entities such as Honeywell Flour Mills and Bharti Airtel Nigeria Ltd within 90 days,” the statement signed by the CBN Director of Banking Supervision, Haruna Mustafa added.
Recall that on Thursday, the CBN overruled the removal of Sola Adeduntan as the Managing Director by the Awosika-led board, noting that due process was not followed.
According to the CBN, the action taken was down to protect the 31 million customers ad minority shareholders of the Bank.