First Bank Appoints New CEO Amid Major Fraud Scandal

Nigeria’s oldest financial institution, First Bank, recently appointed a risk expert as Chief Executive Officer, highlighting its increased focus on controls.

This comes after a staff member reportedly embezzled a staggering forty-four billion Naira over a two-year period.

The immediate past Chief Executive Officer, Adesola Adeduntan, suddenly resigned in April with a brief letter sent from Washington during the annual World Bank/IMF meetings. “I have, however, decided to proceed on retirement with effect from 20 April 2024 to pursue other interests,” said Adeduntan, who joined the bank in 2014.

First Bank has not explained the circumstances of Adeduntan’s departure. However, Olusegun Alebiosu has been named Managing Director and Chief Executive. Alebiosu was previously the executive director, chief risk officer, and executive compliance officer since January 2022, and has served as the group executive/chief risk officer since 2016.

The revelation of the fraud at First Bank has generated significant chatter on social media, initially reported by TechCabal and amplified by Ndubuisi Ekekwe, the lead faculty at Tekedia. Ekekwe remarked, “Today, we are hearing that one demon operated there for two years and cleared N44bn,” referring to an employee at a Lagos branch who allegedly diverted funds in a scheme that went undetected for almost two years.

Confirmation of the fraud causing ripples within the bank came via a letter dated May 10, 2024, reportedly written to the Lagos State Police Commissioner. In the letter, the bank stated, “We hereby bring to your notice the discovery of fraudulent transactions within and outside the bank and request your good offices to set up the machinery of investigation with a view to unravel the circumstances surrounding the said fraud and to get the culprits apprehended to face the wrath of the law.”

The alleged perpetrator reportedly made fraudulent transactions to his wife’s account at another bank, from where the funds were transferred to 34 other beneficiaries. These funds then moved into a total of 1,190 accounts across various banks.

Social media reactions have been intense. Dr. A. TuruMbe recalled a similar case from 20 years ago, while another user suggested that the stolen money came from dispense errors that went undetected for two years until a submarine cable issue in April exposed the scheme.

Commentators have questioned why the fraud went undetected for so long, asking if First Bank’s systems are automated and if proper oversight and audit procedures are in place. Nkwuda Chinedu questioned, “Is there no Maker-Checker in place as known traditionally in banking? Has the staff no supervisor and no audit for the period?”

Others have expressed concerns over how one staff member could have unchecked access to reversal funds. Victor Frank commented, “The problem with the Nigerian government is evident in the banking sector. I cannot imagine how a whopping N44bn will be scattered around without triggering an alert.”

A bank customer on social media noted that because the alleged culprit was stealing bank customer reversals, it was difficult for the bank to detect, resulting in delayed reversal and crediting of customer accounts.