The confirmation of the new head of FBN Holdings fails to conform with the provisions of CBN’s Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014.
Nigeria’s watchdogs are failing the credibility test, and no recent case makes this clearer than the appointment months ago of the former Fidelity Bank’s chief, Nnamdi Okonkwo, as the new group managing director of FBN Holdings.
Mr Okonkwo, who got the First Bank job in October 2021, scaled the Central Bank of Nigeria’s approval hurdle despite being the subject of a major money laundering investigation.
Mr Okonkwo has since 2016 faced 14 charges of alleged corruption at a Lagos Federal High Court, a record not lost on the CBN. In November 2021, a month after his latest appointment, the Economic and Financial Crimes Commission (EFCC) again quizzed Mr Okonkwo.
The EFCC said in 2017 that during his Fidelity Bank days, Mr Okonkwo helped illegally move $153.3 million belonging to the Nigerian National Petroleum Corporation (NNPC). The anti-graft body said Mr Okonkwo contrived a plot with Diezani Alison-Madueke, Nigeria’s petroleum minister at the time, to help her convey the money in cash from Abuja to the bank’s Lagos headquarters.
An EFCC investigator, Moses Awolusi, who worked on the case, testified that Mr Okonkwo had an order from the minister neither to lodge it in any account nor transfer electronically via banking channels.
A portion of the money ($108.3 million) would later go into an investment that was conducted off balance sheet at Sterling Asset Management Trustees Limited, the fund management division of Sterling Bank, the anti-graft agency said.
Another portion ($40 million) was received by an executive director at First Bank, whose parent company Mr Okonkwo would later head.
At a Federal High Court sitting in Lagos in February 2017, Justice Muslim Hassan declared the final forfeiture of the loot, N34 billion terms after establishing the fund to be proceeds of illegal acts.
Fresh Scandal
Much as the CBN failed to note the case while reviewing Mr Okonkwo’s profile for confirmation, news of his alleged involvement in a fresh corruption case broke in December in the warm-up stage to his resumption at FBN Holdings, again disregarded by the apex bank.
The EFCC, through its spokesperson, Wilson Uwujaren, disclosed in Abuja the commission unearthed a new $72.9 million as part of the $115 million linked to bribing officials of the Independent National Electoral Commission (INEC) during the 2015 election.
“Okonkwo, who is currently the Chairman of First Bank Holding, alongside others, had earlier been grilled over a sum of $153 million and $115 million by the Commission,” Mr Uwujaren said in December.
“While all the $153 million were recovered by the EFCC, the cases involving $115 million, as it relates with the Independent National Electoral Commission, INEC, bribery matter, are in various courts,” the statement added.
“Okonkwo and Charles Onyedibe (a Fidelity Bank branch manager) are currently being detained by the EFCC over the whereabouts of the new $72.8 million.”
In April 2019, Auwal Jibrin, a deputy director at INEC and an accomplice, Garba Ismaila, got jail terms of six years and seven years respectively for being complicit in the crime.
The spokesperson for the CBN, Osita Nwanisobi, refused to comment on the case. He requested the question be sent as a message but still did not respond.
The resolution confirming Mr Okonkwo’s appointment by the apex bank authorities does not conform with one of the provisions of CBN’s own Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014, which took effect last year.
“Track record of appointees shall be an additional eligibility requirement. Such records shall cover both integrity and past performance, in accordance with the extant CBN Guidelines on Fit and Proper Persons Regime,” its Section 2.4.4 stipulates.
Thereferenced guidelines are a part of Revised Assessment Criteria for Approved Persons’ Regime for Financial Institutions 2015, another regulatory document of the CBN, which spells out the criteria for assessing the propriety of persons for board, top management and critical operational positions in commercial bank.
The document notes in its second section that in assessing a candidate’s integrity and suitability for those roles, elements to be considered must include whether “the candidate is or has been the subject of any proceedings of a disciplinary or criminal nature, or has been notified of any impending proceedings or any investigation, which might lead to such proceedings.”
Section 2, Subsection 4 also adds that the integrity test must consider whether “the candidate…, has been investigated, disciplined, suspended or criticized by a regulatory or professional body, a court or tribunal, whether publicly or privately.”
Operational and corporate governance upheavals
Between 2016 and when the FBN Holdings hierarchy announced Mr Okonkwo as the group’s new head, the holdco has been bogged down by a number of operational and corporate governance upheavals, most of them dire.
From a far-reaching bad loan crisis that put FirstBank in danger of being swept under in 2016 to a regulator-led reshuffle last year down to a contentious top ownership tussle in 2021, the 128-year old financial institution seems to be right at phase where it needs a coordinated makeover to redeem its name among investors and the public.
FirstBank is seeing a healing process following the disaster wrought some six years ago when its bad loan charges rocketed by 90 per cent to N226 billion, forcing the CBN to appoint Adesola Addeduntan as its chief.
An analyst in April estimated the bank had set aside more than N1 trillion to cover doubtful credit in the six years to that time.
That month, a power block comprising Oba Otudeko, FBN Holdings chair at that point, and Ibukun Awosika, FirstBank’s immediate chairperson, contrived to replace Mr Adeduntan, whose loyalty was said to lie in another block.
The decision irked the CBN, which never green-lighted the decision before news of the appointment broke into the open.
The regulator later dismissed the duo and appointed Remi Babalola, Nigeria’s former minister of state for finance, to chair the group.
In 2021, a cut-throat scramble for the biggest shareholder title pitted Tunde Hassan-Odukale, the chairman of FirstBank, against Femi Otedola, an energy mogul, who until that time was not numbered among the bank’s chief stockholders. Piecemeal purchases of the group’s shares under stealthy circumstances raised Mr Otedola’s stake to 7.6 per cent, catapulting him to the peak of its shareholding structure.
The quest to resist a rank outsider from becoming the top shareholder, which could bestow considerable power to take certain key board decisions, would later have reverberations.
Before Mr Otedola’s status as the new top shareholder could be officially confirmed in October, the FBN Holdings board created no little scare in hastily declaring Mr Okonkwo as the incoming GMD to take over from U.K. Eke, whose tenure ended by the end of December.
The board took other questionable decisions as captured in the statement in which Mr Okonkwo’s appointment was announced.
For instance, the board fired its registrars, First Registrars (itself a subsidiary of FBN Holdings), and appointed Meristem Registrars from outside the group to henceforth keep its register of members.
At his exit point, Mr Babalola spoke of the multi-layered rot in FBN Holdings, with intimation that the group might require an elaborate cleansing act to find redemption.
“With the rot, stench and corruption in the system, it has been well-nigh impossible for me to break; and upon deep reflection and partial to my personal values, I write to formally resign my appointment as a non-executive director and chairman of the board of directors of FBN Holdings PLC, effective immediately,” Mr Babalola said.
