Ecobank Transnational Inc. must tackle deficiencies in corporate governance, Nigeria’s financial regulator said, after probing fraud allegations against senior executives at the lender that operates in 35 African nations.
A review found “inadequate transparency in the recruitment procedures and mechanisms for board members and executive staff,” the Abuja-based Securities and Exchange Commission said in a statement on its website late yesterday. Ecobank should appoint a “substantive” chairman and develop a one-year plan to address the governance issues, it said.
Nigeria’s SEC investigated Ecobank after Laurence do Rego, group executive director of risk and finance, told the regulator in August that former Chairman Kolapo Lawson and Chief Executive Officer Thierry Tanoh planned to sell assets below market value. Do Rego said she was pressured to write off debts owed by a business headed by Lawson and manipulate the bank’s results. Both Tanoh and Lawson deny any wrongdoing.
“Investors and current shareholders should be concerned about this new development,” Lanre Buluro, head of research at Lagos-based Primera Africa Securities Ltd., said by e-mail today.
Mwambu Wanendeya, a spokesman for Lome, Togo-based Ecobank, didn’t answer phone calls or respond to e-mailed requests for comment.
Ecobank’s shares declined 0.4 percent to 17 naira at the 2:30 p.m. close in Nigeria’s commercial capital, Lagos, paring the lender’s gain this year to 4.9 percent.
Lawson, who retired on Dec. 31, said in October that he was stepping down to end uncertainty and “media speculation” over Ecobank, which handed over to interim Chairman Andre Siaka.
The bank said in September that Tanoh would forgo his $1.14 million bonus for 2012 as the lender reviews corporate governance. Tanoh didn’t respond to an e-mailed request for comment today.
The board’s weaknesses included its ability to oversee the bank’s management, ensure ethical behavior and safeguard the interests of shareholders, the SEC said. The regulator said it relayed the findings of the audit to Ecobank’s board on Dec. 16.
“The SEC statement is negative on management and the bank as a whole,” Muyiwa Oni, a Lagos-based analyst at Stanbic IBTC Holding Plc, said in e-mailed comments. “But it does not show that management is guilty of most of the allegations.”
The lender should hold an extraordinary general meeting by the end of February to provide feedback to shareholders on the SEC audit, which was assisted by KPMG, the regulator said.
Do Rego, who joined Ecobank in 2002 and was appointed to her position in January 2010 after serving as chief financial officer from 2005 to 2009, was no longer an employee, the bank said in a Jan. 8 statement.
Founded in 1985, Ecobank also operates in France and has representative offices in Beijing, Dubai and London. The bank had $21.5 billion in assets at the end of September.