The crisis rocking the board room of financial institution, Eco Bank just deepened.
Details of this
development are reproduced below
'Two former directors of Ecobank defended CEO Thierry Tanoh and said
he is under pressure to resign because he is dealing with governance
problems that allegedly took place before his tenure began at one of the
biggest banks in sub-Saharan Africa.
Their views are likely to be advanced to shareholders by the company
on Monday at an extraordinary general meeting (EGM) at its headquarters
in the Togolese capital Lome to vote on governance reforms.
Several current and former senior bank officials rejected the claim
as false and said it was an effort to divert attention from governance
problems which, they asserted, started once Tanoh became chief executive
in January 2013.
Ecobank (ETI.LG) is divided over the leadership of Tanoh, an Ivorian
who was vice president of the World Bank’s International Finance
Corporation.
'The bank’s main shareholder Public Investment Corporation of South
Africa said in a letter on Saturday
Tanoh should be dismissed
immediately, accusing him of governance breaches and of failing to raise
capital.
On February 13, the executives on Tanoh’s top management team called for him to step down to resolve a leadership crisis.
Former directors Babatunde Ajibade and Kolapo Lawson, who served on a
board that now has 12 members, said criticism of Tanoh is rooted in
fear by other senior executives that his willingness to reform
governance may expose past problems.
In interviews, both men declined to spell out those alleged failures
in detail. But Lawson said in a resignation letter dated February 7 and
seen by Reuters that they stemmed from “the ETI public offering of
2008″, which refers to the bank’s flotation on the Nigerian stock
exchange.
ETI, or Ecobank Transnational Incorporated, is the name of the bank group’s formal name.
“The institution has an unfortunate legacy of executive mismanagement
that was deliberately and carefully concealed from the board,” said
Ajibade’s resignation letter, dated February 6 and also seen by Reuters.
Ajibade is a corporate lawyer.
Ajibade and Lawson said their concerns were first raised last August 5
when Tanoh presented an interim report to the board, spelling out
possible breaches prior to his tenure that he said needed to be
investigated.
Evidence of those purported breaches should emerge in a report by
professional services firm EY that was commissioned by the bank, Lawson
told Reuters, calling allegations against Tanoh that have occurred since
that board meeting a “smokescreen”.
“There was great resistance, and that resistance continues to this
day. The board doesn’t want to release the results of the EY report,”
Lawson said.
“They want to get rid of him before the EGM,” he added.
'An Ecobank spokesman declined to comment. Tanoh was unavailable for
comment, and has previously declined to speak about the issues while
investigations are ongoing.
INTERIM REPORT
The current and former senior officials dismissed Ajibade and
Lawson’s claims and said governance standards were strictly upheld
during the tenure of previous CEO Arnold Ekpe.
The former directors’ views were merely an attempt to divert
attention from this fact, said the officials, who declined to be
identified. Ekpe declined to comment.
The officials said Lawson’s credibility on the matter was tarnished.
Lawson stood down as chairman in October, saying he did not want to
preside over the governance review, before sending his letter of
resignation from the board on February 7.
'In 2013, he owed Ecobank Nigeria roughly $10 million indirectly
through businesses he owned and a further 1.4 billion naira ($8.5
million) of borrowings that was sold to Nigeria’s so-called “bad bank”,
the Asset Management Corporation of Nigeria (AMCON). AMCON owns 8.09
percent of Ecobank stock.
The debt portion owed to the bank has now been paid, Ecobank said.
In a separate letter to Nigeria’s Securities and Exchange Commission
(SEC), dated January 20, Tanoh calls for further investigation of what
he called previous transgressions.
“Subsequent to my assumption of office … I became aware of improper
financial offences at ETI that have not been done in the best interest
of investors or the institution,” said the letter, seen by Reuters.
It was not immediately possible to reach other board members. Top executives have declined repeated requests for comment.'
Reuters
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