How Ecobank washed its dirty linen in public

By:
Kanika Saigal
Published on:

Timeline
2012
July:  Thierry Tanoh is appointed CEO designate of Ecobank Group.
2013
January:  Arnold Ekpe steps down as CEO (for the second time) and Tanoh is appointed substantive Group CEO.
July 2:  Tanoh asks Laurence do Rego, ETI’s executive director of finance and risk, to step down, accusing her of falsifying some of her qualifications.
July 16:  The Financial Times reports that Nigeria’s Central Bank (CBN) told Ecobank in April of then Chairman Kolapo Lawson’s alleged failure to pay N1.4 billion naira ($8.79 million) owed to the Asset Management Corporation of Nigeria (Amcon) and that Tanoh had failed as CEO to inform the board of this.
July 17:  In response, Ecobank states: "The matters concerning Mr Lawson’s dealings with Amcon have been discussed at the Board and, we understand, Mr Lawson has reached an agreement with Amcon on this issue."

"The article also raises concerns about Mr Lawson’s financial arrangement with Ecobank. There is no personal loan by Ecobank to Mr Lawson. Companies of which Mr Lawson is a director do have business relations with Ecobank and one of these has a contracted loan facility with the bank. The current repayment schedule is not yet due and the loan is secured."
August 5:  A board meeting suspends Do Rego.

Immediately after the meeting, do Rego sends a letter to the SEC alleging that the Lawson and Tanoh were attempting to sell non-core assets at values below market, that both individuals attempted to manipulate 2012 financial results, and questioned procedures around the approval of a substantial increase in Tanoh’s 2012 bonus to $1.14 million. 

She also alleges that she was asked to write off debts owed by a real estate company Lawson chairs.
August 6:  ETI board members agree in a statement that "there has been no financial impropriety and that Mr Lawson had acted in good faith throughout. As a result the Board unanimously reaffirmed its confidence in Mr Lawson." 

Mr Lawson is "pleased that we have been able to draw a line under this matter. The board has made it clear that it has no outstanding concerns and I now wish to concentrate once again on leading Ecobank to further success."
September 2:  Tanoh tells Ecobank staff that he will forgo his bonus
September 15:  The SEC hires KPMG to support the investigation of corporate governance issues in ETI.
September 20:  An ETI board meeting is held in response to press allegations.

It publishes a communiqué stating: "The board noted the fact that the suspended Director [do Rego] had been repeatedly invited to substantiate her allegations but has so far failed to honour the board’s invitation."
October 29 Kolapo Lawson steps down as Chairman and Andre Siaka takes over as interim Chairman. 

In a statement released by Ecobank, Lawson says: "The last few months have seen huge pressure on the organisation, and on me personally, in the media. These have culminated in allegations, which are untrue, made to the Nigerian SEC on issues of corporate governance….

"I therefore wish to take the necessary steps to bring this to an end. As the head of such a respected global institution, I must act when there is even the slightest perception that the interests of that institution might be at risk. I therefore step aside as Chairman of Ecobank Transnational."
2014
January 9:  SEC releases the investigation report of ETI’s corporate governance practices.

The review states that there is "an absence of a clear vision and strategy to drive the institution, inadequate transparency in the recruitment procedures and mechanisms for Board members and executive staff which fostered conflicts of interest".

The SEC also advises ETI to develop a one year remedial plan with specific measures to address the specific governance gaps observed.
January 13:  ETI states its commitment to working with the SEC and that initiatives are already underway to strengthen ETI’s corporate governance. 

The group reiterates that ETI has a "focused strategy which has enabled us to grow into one of the largest banks on the continent".
February 13:  Four executives write to Siaka to say Tanoh should resign to solve a leadership crisis.
February 19:  The SEC tells ETI that do Rego must be reinstated, in line with Nigeria’s regulatory laws.
March 1:  Daniel Matjila, ETI’s non-executive board member and chief investment officer of South Africa’s Public Investment Corporation (one of the bank’s shareholders), condemns Tanoh in a letter to the rest of ETI’s board, calling for his contract to be terminated.
March 3:  ETI holds an EGM to "adopt an action plan to implement the recommendations of the Securities and Exchange Commission, Nigeria on governance improvement of the company". 

Among the decisions made, the board was limited to 15 members and no director would be able to serve more than nine years in total.
March 11:  Tanoh is dismissed as CEO and Albert Essien takes over the position. 
September 15:  QNB buys Amcon’s shares in ETI to become the largest shareholder in the pan-African bank with a 23.5% stake.
October 2:  Nedbank acquires 20% shareholding in ETI and Graham Dempster, Nedbank’s COO, is given a position on ETI’s board. 

Mike Brown, Nedbank’s CEO, noted that the shareholding "represents an important step in the consolidation and depending of the strategic and technical banking alliance we have with ETI". 

QNB’s stake is diluted to around 19%.
October 7:  In an interview with Euromoney, Smit Crouse, executive head of the Ecobank Nedbank Strategic Business Alliance,  states that Nedbank has no further intentions to increase its shareholding in ETI.