Ecobank chief to forego bonus as board crisis deepens

By The Rainbow

Faced with allegations of manipulation of results, the chief executive of Ecobank Transnational (ETI), Thierry Tanoh, said on Monday  he would forego a controversial $1.14m bonus for 2012 and launch an internal inquiry into allegations of mismanagement.

The management and board have been under severe pressure since allegations of underhanded practices were made by suspended finance director of the bank.

In an email circulated to staff on Monday, Tano said that as part of the inquiries the bank's governance committee would invite Laurence do Rego, the suspended executive director for finance and risk, to substantiate allegations she made in a letter to Nigeria's Securities and Exchange Commission last month.

Ms do Rego had claimed in her letter that  she had come under pressure to write off debts owed by a business chaired by Kolapo Lawson, ETI's chairman, and to manipulate 2012 results.

She said she resisted these requests, opposed attempts to sell off non-core assets on the cheap, and questioned the manner in which the chief executive's bonus had been increased.

The  bank's spokesman, Mr. Jeremy Reynolds, had on behalf og the chief executive denied those allegations but confirmed the increase to his bonus.

Ms do Rego said this was $935,967 above what it would have been under his contract, for a period when he had not yet been formally confirmed as chief executive. Other senior managers had bonuses cut.

Ms do Rego also questioned procedures used to change key performance indicators in Mr Tanoh's contract.

'Although the review followed due process and was approved by the Governance Committee of the board, I have informed the Board of my decision to forgo my bonus for 2012 in its entirety,' Mr Tanoh wrote in his email to staff. 'While the changes in my current contract were implemented in full compliance with existing policy, I have informed the board that I would like my initial contract to be re-instated,' he added.

Mr Reynolds said the chief executive had accepted that the bonus award 'had sent the wrong signals'. He added that separately the board of the bank had agreed to appoint an external expert to review corporate governance structures at the bank.

Several Investors and officials connected with the bank doubted that the measures went far enough to allay concerns among leading shareholders about the way the bank is being run.

ETI, which is headquartered in Togo, has been in the vanguard of African banks expanding across borders during a recent continent-wide boom in services. It has gained a presence in 34 African countries, a solid reputation, and assets worth in excess of $20bn.

But the bank has been rocked by a string of recent controversies starting in April when the Central Bank of Nigeria questioned the fitness of its chairman, given what it called his 'huge outstanding non-performing facilities'.

Mr Lawson has since settled some of his debts and reached agreement on others.