Ecobank Replaces CEO Amid Questions on Corporate Governance

March 12 (Bloomberg) -- Ecobank Transnational Inc.’s board named Albert Essien to replace Thierry Tanoh as chief executive officer after regulators probed allegations of management fraud and poor corporate governance at the pan-African lender.

Tanoh’s term as CEO and director ends today, the Lome, Togo-based bank said late yesterday in an e-mailed statement. Essien was deputy CEO and head of corporate and investment banking, while whistle-blower Laurence do Rego was reinstated as group executive director of finance and risk, the bank said.

The lender’s largest shareholder, South Africa’s Public Investment Corp., had called for Tanoh to quit after allegations of mismanagement, which he denies. The board met yesterday in Cameroon’s capital, Yaounde, after investors last week approved a plan to implement recommendations on corporate governance by Nigeria’s Securities and Exchange Commission.

“For now the whole saga has ended,” Sebastian Spio-Garbrah, the managing director of New York-based DaMina Advisors LLP, said in an e-mailed reply to questions today. Essien will need to make “stakeholder relations a top priority of his tenure,” he said.

Ecobank shares were unchanged today at 14.50 naira in Lagos, the Nigerian commercial capital, after declining 3.3 percent yesterday. The stock has dropped 10 percent this year.

Meeting Challenges

Nigeria’s regulator investigated the lender after do Rego told the SEC in August that Tanoh and former Chairman Kolapo Lawson 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. Tanoh and Lawson have denied any wrongdoing.

“We have faced challenges at the governance level in the recent past, but they aren’t insurmountable,” Essien said in the statement. “We have put in place a detailed governance action plan which will strengthen us to meet these challenges.”

Tanoh’s mobile phone was busy when called for comment yesterday and he didn’t reply to an e-mail. Obi Adindu, a spokesman for the Nigerian SEC, declined to comment when contacted by phone today from the capital, Abuja.

The PIC said on March 1 that it wanted Tanoh to resign immediately. The CEO used “strange tactics” to stop Ecobank’s board meeting on Feb. 25 and continues to use the “Ecobank platform and shameless abuse of the judicial system of Togo to pursue what we believe to be his own political and personal interests,” Dan Matjila, chief investment officer of the PIC, said in a letter to the bank’s interim Chairman Andre Siaka. Matjila declined to comment when contacted yesterday by phone.

Founded in 1985, Ecobank operates in France and 35 African countries and has representative offices in Beijing, Dubai and London. Ecobank reported in October that profit increased 65 percent to $250 million in the nine months through September as its businesses in Nigeria and Ghana expanded.

To contact the reporters on this story: Andres R. Martinez in Accra at amartinez28@bloomberg.net; Chris Kay in Lagos at ckay5@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Dale Crofts, Dylan Griffiths