A decade ago, Ecobank Transnational Incorporated (ETI) which is the holding group for the Ecobank subsidiary banking institutions that we know became embroiled in one of the most spectacular corporate governance train smashes of the African 21^st century. In October 1985, ETI was incorporated with an authorised capital of US$100 million. The initial paid up capital of US$32 million was raised from over 1,500 individuals and institutions from West African countries. The largest shareholder was the Economic Community of West African States (ECOWAS) Fund for Cooperation, Compensation and Development, the development finance arm of ECOWAS. With its headquarters in Lomé, Togo, Ecobank is the widest pan-African bank as it has operations in 36 countries on the continent and is traded on the Cote D’Ivoire, Ghana and Nigeria Stock Exchanges. Totally irrelevant but fun fact: the largest bank in Africa by tier 1 capital size is Stanbic Kenya’s parent, the Standard Bank Group at US$13.6 billion as at the end of 2022.

 

But let’s go back to April 2013 when the Group CEO (GCEO) of  ETI, a gentleman who had been recruited less than two years before from the International Finance Corporation, was sipping on a hot capuccino in his lofty office perched high in a glass and steel structure in Lomé. A letter landed on his desk from the Central Bank of Nigeria. The cappuccino foam started to congeal in his stomach as he read the contents that said your group chairman has integrity issues, blah blah, is not fit and proper to chair a bank board, blah blah. It turned out that the group chairman’s real estate company had undertaken some borrowing in Ecobank Nigeria to the tune of about US$10 million which had been defaulted on. You see, the Nigerian regulators were not about to let their brother drag down their image, even if it was two countries west of the border over in Togo. It is important to note that ETI’s Nigerian subsidiary had its own board of directors. But they went after the bigger Oga, the group chairman who was a gentleman of Nigerian extraction.

 

The GCEO pushed aside the rapidly cooling coffee. He thought long. He thought hard. What was the best thing to do in light of this damning accusation? Do nothing. Well, maybe not nothing. He likely had a conversation with the group chairman and told him what had come in. By this time the Group Chief Financial Officer (GCFO), a fiery lady of Beninois extraction, had already cottoned on to some shenanigans going on at the bank. She had allegedly been asked to write off debts owed by group chairman’s real estate company as well as to manipulate the bank’s 2012 results to improve those of 2013 when GCEO had been confirmed. By improving the results, the board approved a $1.14 million bonus to the GCEO for a period while he was still GCEO designate, while other senior managers had their bonuses cut. No prizes for guessing who was scratching whose back in these transactions.

 

GCFO decided to whistle blow. Like any good person who has had mud slung at them, GCEO decided to sling some mud back plus VAT. Even while the damning letter from the CBN about the group chairman lay quietly in his desk, he alerted the board that he had lost confidence in the GCFO and she had to go. In fact, there was a report from the CBN that said that the risk function she had headed had failed their audit inspection by the regulator. She had to go. Such incompetence could not be tolerated. He asked her to resign. She refused. This was a classic face off like Governor Kawira versus the determined Members of the Meru County Assembly Impeachment Crew. Not only did GCFO refuse to resign, she wrote a damning memo to the board of directors seeking their protection.

 

Surprisingly the board turned the other way, sipped some rooibos tea and gave GCFO a six month suspension while clearing the group chairman of any wrong doing. It is not clear if they knew about the letter from the CBN by the time they were giving him the get-Barnabas-off-the-cross passthrough. GCFO was not going without a fight. She sent the whole exposé to the Nigerian Securities Commission, the regulator of the Nigerian Stock Exchange. Did the Nigerian regulators rescue a whistle blowing victim two countries away? You have to come back here next week to find out. Spoiler alert: GCFO fought the good fight, finished the race and kept the faith in the end!

 

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Twitter: @carolmusyoka