Ecobank investors pull interim Board as governance plan approved

Ecobank Transnational (ETI) Inc. said its biggest shareholders withdrew a motion to create a smaller interim board, which would have overseen the implementation of measures to improve corporate governance.

Investors decided to retain the existing 12-person board, Mwambu Wanendeya, a spokesman for the bank, told reporters after an extraordinary general meeting in Lome, Togo. While declining to comment further on the board, he said shareholders had approved a governance action plan following recommendations by Nigeria’s Securities and Exchange Commission.

“The vote on the governance action plan was unanimous,” said Wanendeya.

Nigeria’s regulator investigated Ecobank after former Director of Finance Laurence Do Rego told the SEC in August that Chief Executive Officer Thierry Tanoh and former Chairman Kolapo Lawson planned to sell assets below market value. Both Tanoh and Lawson deny any wrongdoing.

At today’s meeting, shareholders voted to limit the maximum size of the board to 15 members and to ensure that no directors can serve more than nine years in total. A motion to raise capital was rejected after getting the backing of 68 percent of shareholders, short of the 75 percent required, Wanendeya said.
‘Shameless Abuse’

South Africa’s Public Investment Corp., the biggest shareholder in Ecobank, said on March 1 that it wanted CEO 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, the money manager’s Pretoria-based chief investment officer, said in a letter to Ecobank interim Chairman Andre Siaka.

The PIC owns more than 18 percent of Ecobank while the International Finance Corp. holds about 6 percent directly and a further 8 percent indirectly. Asset Management Corp. of Nigeria owns about 8.6 percent.

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.
Nedbank Decision

Under the new articles of association approved at today’s meeting, Ecobank shareholders agreed that the bank shall not undertake any acquisition, merger or disposal of the company’s assets whose value is equal to or above 20 percent of the book value of the lender without the approval of a majority of investors present in a general meeting.

Nedbank Group Ltd. (NED) CEO Mike Brown said on Feb. 24 that the South African lender controlled by Old Mutual Plc would consider governance issues before deciding whether to exercise an option to buy a stake in Ecobank. Nedbank has until the end of November to convert the $285 million loan it made to Ecobank in 2011 into an equity holding and then increase the stake to as much as 20 percent.

Credit: Bloomberg