Advertisement

SEC keeps eyes on Ecobank Inc. over allegations of financial impropriety

Mr Thierry Tanoh -CEO, ETIEcobank Transnational Incorporated (ETI) faces a tough decision over allegations of mismanagement and debt write-off being investigated by the Securities and Exchange Commission of Nigeria.


The Securities and Exchange Commission of Ghana is equally keeping an eye on the storm in the boardroom of ETI as the Nigerian security agencies begin an inquiry into allegations of financial impropriety.

The Director-General of the Securities and Exchange Commission of Ghana, Mr Adu Anane Antwi, said his outfit was monitoring events as they unfold at Ecobank and the outcome of the investigations initiated by the Nigerian Securities and Exchange Commission.

“We are waiting to see how the final investigations of our colleagues in Nigerian ends before we also build a case if  there are  some substance to those allegations”, he said.

Mr Anane admits that ETI is a listed company on the Ghana Stock Exchange and so SEC Ghana would take the necessary steps to protect Ghanaian investors.

This is because the continent’s most geographically diversed bank had been rocked by fresh allegations of attempts by the Chairman, Mr Kolapo Lawson and Chief Executive, Mr Thierry Tanoh to write off debt, sell off assets on the cheap and inflate a bonus award, potentially reigniting divisions on its board.

In an August 6 letter to the Nigerian Securities and Exchange Commission (SEC), copied to bank directors, Laurence do Rego, Ecobank Transnational’s (ETI) Executive Director in charge of risk and finance, warned that the bank’s board “is not operating in the interests of shareholders.”

Issues under investigations

ETI’s suspended Executive Director in charge of risk and finance, Laurence do Rego, accuses Kolapo Lawson, the chairman, and Thierry Tanoh, the new chief executive, of attempting to sell off non-core assets at “well below the market value”.

She alleges that she was asked to write off debts owed by a real estate company Mr Lawson chairs and to manipulate the bank’s 2012 results to improve those of 2013 when Mr Tanoh was confirmed as CEO – all allegations the bank’s spokes persons have denied.

The allegations that follow in her letter, prompted by inquiries by the SEC, follow a turbulent few weeks at the pan-African lender, which has blazed a trail across borders to build a presence in 34 African countries.

She also questions procedures surrounding the approval of a US$1.14m bonus to Mr Tanoh for 2012. This is, she claims, is US$935,967 above what it would have been under his contract and for a period when he was CEO designate. Other senior managers had bonuses cut.

Her allegations are reigniting divisions on the bank’s board following earlier disagreements over the handling of an April letter from the Central bank of Nigeria questioning Mr Lawson’s fitness as chairman.Mr Kolapo Lawson —  Board Chairman, ETI

The CBN wrote then of Mr Lawson’s “huge outstanding non-performing facilities” at Alcon, the Asset Management Corporation set up to absorb toxic assets following the 2009 Nigerian bank crash.

Mr Lawson has since come to an agreement with Amcon and the CBN wrote to Ecobank on August 16 acknowledging efforts to resolve the issue. At an emergency meeting on August 5, Ecobank said Mr Lawson had unanimous support from the board. But the questions about corporate governance at the bank have not gone away.

Whistle-blower in eye of the storm

Ms do Rego has portrayed her suspension as the result of her resistance to actions she felt were not in the interests of the bank.

The decision to single out the woman who oversees the purse-strings has also alarmed institutional shareholders.

The accountant from Benin, who in 2010 won an award from the Commonwealth Business council as African businesswoman of the year, has nevertheless remained at the eye of the storm, is having provided the most strident version of things going wrong at the pan-African lender.

In an emergency meeting on 20 September, to resolve the crisis over claims that it’s Chairman and Chief Executive have chronically mismanaged the bank.

The board notes that, “in order to give the suspended Director a final opportunity and to underscore its commitment to transparency, the board resolved to appoint the distinguished Justice, Monsieur Seydou Ba, Former President of the Common Court of Justice and Arbitration of the Organisation for the Harmonisation (OHADA), Former President of the International Labor Organization and current President of the Association for the Unification of Law in Africa (UNIDA), to independently investigate the allegations and make a report to it”.

But opinion on the board seems evenly divided although Ecobank’s founder, Gervais Koffi Djondo, and at least three of the bank’s institutional shareholders are understood to favour the early exit of the pair to resolve the crisis.

By Suleiman Mustapha/ Graphic Business/Ghana







Connect With Us : 0242202447 | 0551484843 | 0266361755 | 059 199 7513 |