The process of removal, appointment and re-appointment of directors are clearly spelt out in Company and allied matters Act.
Emefiele’ s removal and reinstatement of sacked First bank director is ultra vires the power of CBN GOVERNOR under CBN Establishment Act.
Only recently, Ibukun Awosika, announced the removal of the Adedotun as it’s managing director and appointed in his place Gbenga Shobo as it’s managing director.
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In a swift reaction, Central bank of Nigeria issued a statement to the effect that “the attention of central bank of Nigeria 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 Adedotun 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 of Nigeria”.
CBN claimed that the tenure of Adedotun is yet to expire and that they were not aware of any case of misconduct against him and as such no justification for his removal.
As I stated earlier, the legal regime governing the appointment, re-appointment and removal of a director of a company incorporated in Nigeria including commercial bank is governed by the Company and Allied Matters Act and not Central bank of Nigeria establishment Act or any other piece of legislation.
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As funny and ridiculous as the statement issued by Central bank of Nigeria may sound, Central bank of Nigeria could not point to any Section of Central bank of Nigeria Establishment Act that provided for consultation or approval by Central bank of Nigeria before a commercial bank can appoint, re-appointment or remove any of its directors including the Managing director of the bank.
Section 262 of Company And Allied Matters Act provides that “Company may by ordinary resolution remove a director before the expiration of his period of office notwithstanding anything in its article or in any agreement between it and him”.
The import of this Section is that a company including commercial bank can remove its director including the Managing director before the expiration of his tenure for wrong or right reasons irrespective of the contents of the Company’s Article of Association or even the provisions of the agreement appointing the director.
This section postulates that the removal of a director rests squarely in the hands of board of directors and not any other body or person(s) including the Central bank of Nigeria except persons who are disqualified by virtue of other provisions in the Company and Allied Matters Act.
The procedure for removal of directors of a company is that a notice of the meeting wherein the director is to be removed must be served on him within a reasonable time to enable him prepare and state his defence in writhing. Failure to issue the director with this all important notice renders his removal invalid. A managing director of a commercial bank who was wrongly removed by the board of directors of the bank has remedy in court of law not Central bank of Nigeria. See the locus classicus case of Bernard Ojeifo Longe vs First bank of Nigeria (2010) 6 NWLR PT 1189.
The statement by Central bank of Nigeria that Adedotun’s tenure has not expired and that there was no case of misconduct against him cannot fly in the face of Section 262 of CAMA which provides that a company can remove its director before the expiration of his tenure irrespective of the provisions of the agreement appointing the director and the provisions of the Company’s Article of Association.
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The worst interference and meddling into the internal affairs of the First bank of Nigeria is Central bank’s re-appointment of Adedotun and appointment of other directors by fiat. The appointment of a director of a company including commercial bank is by a RESOLUTION duly passed by the Board of directors of the Company and not by announcement by any external body not even Central bank of Nigeria Governor.
Central bank of Nigeria re-appointment of Adedotun Is illegal, null and void and ultra vires the power of Central bank of Nigeria as provided for in the Central bank of Nigeria establishment Act.
The Central bank of Nigeria governor cannot remove any of its directors in the way and manner it removes commercial bank directors.
While the power of Central bank of Nigeria to regulate commercial banks are not in doubt, such regulations does not extend to meddling into the internal affairs of the bank. Such regulations ends with polices and nothing more.
Central bank of Nigeria establishment Act did not envisage that a commercial bank will be run as a department in Central bank neither did it make the Central bank of Nigeria Governor the headmaster of the Commercial bank.
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