In July 2024, First Bank terminated over 100 employees following the discovery of a massive ₦40 billion fraud allegedly orchestrated by Tijani Muiz Adeyinka, a manager in the operations team. Adeyinka, currently at large, reportedly exploited his authorisation to approve chargebacks to accounts under his control over two years.
The dismissal affected at least 120 employees, including full-time and contract staff, who were deemed negligent in detecting the fraudulent activities. The head of transactions was also among those dismissed.
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First Bank’s management believed that such a significant fraud could not have occurred without the complicity or negligence of senior supervisors. As a result, the CEO emphasised a zero-tolerance policy towards supervisory negligence.
Analysing the Fallout: Lessons from the First Bank Fraud Case
Following the fraud’s exposure, Dr Adesola Adeduntan, the CEO at the time, resigned abruptly in April 2024, eight months before the end of his tenure. His departure came shortly after the scandal became public, raising speculations about the influence of the fraud case on his decision.
The Nigerian Police Force (NPF) detained several employees for questioning. These employees, held for at least six hours, had to post bail for release. Additionally, restrictions were imposed on their accounts, except those held with First Bank. The bank’s aggressive stance was evident as it initially tried to keep the matter discreet but took more severe actions as the situation unfolded publicly.
First Bank: A Case Study in Internal Control Failures
This incident tarnished First Bank’s reputation and highlighted the vulnerabilities within the banking sector’s internal controls. The Central Bank’s earlier interventions in First Bank’s leadership decisions underscored the regulatory scrutiny banks face, especially concerning top management’s roles and responsibilities in preventing financial malpractices.
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First Bank and other financial institutions are expected to strengthen their internal controls, ensure rigorous transaction monitoring, and enforce stringent supervisory practices to restore confidence and prevent such incidents.
The banking industry might see increased regulatory interventions to safeguard against similar large-scale frauds in the future.
The dismissal of over 100 employees at First Bank following the revelation of a ₦40 billion fraud marks a significant moment in Nigeria’s banking sector.
It underscores the critical need for robust internal controls, vigilant supervision, and proactive measures to prevent financial misconduct. The incident serves as a stern reminder of the repercussions of negligence and the importance of maintaining integrity in financial institutions.