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 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.
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 N1.4 billion ($8.5 million) of borrowings that was sold to 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.
