Lagos / Accra - Pan-African lender Ecobank announced the departure of chairman Kolapo Lawson yesterday in an attempt to restore confidence after a series of blows to its reputation.
Ecobank has often been touted as a pan-African success story due to its strong growth and aggressive expansion strategy, which have made it attractive to foreign investors.
But allegations of mismanagement have tarnished its image in recent months.
Lawson, whose own judgement had been called into question, said yesterday that independent parties would investigate the allegations and review corporate governance.
“I decided that it wasn’t appropriate for me to preside over the [review] process so I thought it was best to step aside. It’s something I’ve been thinking about for a long time,” Lawson said.
Ecobank, which is headquartered in Togo, listed in Nigeria and Ghana and has operations in 35 African countries, said nine-month pretax profit rose 56 percent year on year to $299 million (R2.9 billion). In March, it announced a record annual profit of $348m.
The bank’s governance problems surfaced in April when Nigeria’s central bank notified it of Lawson’s failure to repay 1.4 billion naira (R87m) in debts sold to Amcon, the government-owned “bad bank”, and a further 1.6 billion naira owed to Ecobank by businesses associated with him.
Ecobank has since said Lawson had repaid the debts owed to it and no company rules were broken. But the bank’s leadership was put under further pressure when suspended head of finance Laurence do Rego alleged that she was asked to mis-state 2012 results and that assets were being unnecessarily sold at a loss.
Nigeria’s Securities and Exchange Commission began investigating the allegations in August. Ecobank denies the charges, although its chief executive has said transparency could be improved. Banking analysts have highlighted that Lawson’s loans only accounted for 0.1 percent of the banking group’s total loan book.
The bank said that vice-chairman Andre Siaka would take over as chairman on an interim basis and Lawson would retire from the board at the end of the year.
Lawson played down the suggestion that problems with corporate governance had impaired the group’s ability to raise cash, and said the bank could right itself quickly.
But a senior source at Ecobank said the group needed to raise at least $300m this year and the bank’s problems had prevented it from starting that process. In addition, the bank was waiting to hear from South Africa’s Nedbank about a major outstanding debt, which Nedbank can convert into equity in November under an agreement.
Nedbank declined to comment. – Reuters