Ecobank In Deep Financial Mess ...Bank Finally Sacks 210 Staffers In Abuja!

 *Dogged By Unholy Management Practices *Details of The Boardroom Crisis

 Certainly, all is not well with the economic health of Ecobank Nigeria Limited. Investors and shareholders in the bank may be facing hard times with their money if what we are gathering about the bank is true.
We had reported some scoops about the bank’s operations in the last two weeks which the bank denied. One of such was about the sack in the offing of its staffers. The bank stoutly wrote that it cannot promote 500 staffers on the last day of December 2013 and be sacking about 200 staffers in January 2014.
Like a responsible media organisation, we believed the bank’s account but we realised that the bank was simply not a transparent organisation. We can reveal that 210 staffers were relieved of their jobs in January 2014 in Abuja region. Their sack was their happy new year gift.

Many of those who were relieved of their jobs had put in an average of three to seven years working with the bank. This negates the position of the bank in its earlier statement to this newspaper.
From our depth of investigation, we can tell Nigerians that the bank has established a trend whereby some of its mid-term staffers who are nearing the minimum of 10 years or 15 years that will qualify them for pension and gratuities are systematically relieved and replaced with fresh graduates who now have to cultivate years and are weaned off the same way.
It is only in Nigeria whose labour laws are too clement for the smart African investors to treat Nigerians this way (remember the MTN Nigeria stories we published). Ecobank runs a more respectable labour policy in other nations they operate.

However, we can also reveal that the global financial health of the bank seems so suspect. Several inadequacies and scandals had been rocking the bank in its operations which recently led to a boardroom war whence the Group Finance Director had to be eased out.
When the scandal broke out, Ecobank Transnational Incorporated (ETI) announced that its Group Executive Director for Finance and Risk, Mrs. Laurence Do Rego, was no longer its employee.
Mrs Do Rego had been on suspension since September 2012 and for several months following a series of controversies arising from her letter detailing unhealthy developments of how top management staffers allocate funds for themselves and find administrative measures to write same off. (We shall publish her letter tomorrow).

A terse statement by the bank’s Group Head of Communications, Mwambu Wanendeya, read, “Ecobank Transnational Incorporated today announces that Mrs. Laurence do Rego, the Group Executive Director for Finance and Risk, is no longer an employee of the company.”
The Securities and Exchange Commission had in August last year commenced an investigation into the bank’s alleged mis-statement of its 2012 performance.
Kolapo Lawson and the $1m loan write-off: In her letter to SEC, do Rego claimed she had come under pressure to write off debts owed by ETI’s Chairman, Mr. Kolapo Lawson who took a loan of $1million and to manipulate the 2012 results.

She said she resisted the 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 to $1.1million per annum.
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.
False qualification and bank negligence: Ecobank’s spokesman, Jeremy Reynolds, had said that Do Rego, who joined the lender 11 years ago, was suspended because she falsely claimed to be a qualified accountant, Reuters had reported.

Reynolds did not tell his audience why it was when Do Rego raised issues of propriety of investors fund that the bank realised she was not properly qualified. Why did the bank wait that long? Does it mean that the bank never did due diligence on the qualification of their staffers? Was do Rego a ‘good girl’ and protected until she became a ‘bad girl’ did the bank remembered her so-called qualification? Or the bank needed a bad name to hang the troubling dog.
Reynolds also said Do Rego had not responded to the bank’s invitation to meet the board of directors and substantiate her claims.
The Reuters’ report said the bank had been rocked by a string of controversies starting in April last year when the Central Bank of Nigeria questioned the fitness of its Chairman, Lawson, given what it called his “huge outstanding non-performing facilities.”

Lawson has since settled some of his debts and reached an agreement on how to pay the others.
Thierry Tanoh’s $1.14m bonus: In September last year, the Chief Executive Officer of ETI, Thierry Tanoh, announced he would forego a controversial $1.14m bonus for 2012 and launch an internal inquiry into allegations of mismanagement, in a bid to draw a line under a crisis of confidence in the pan-African lender’s leadership.
In an e-mail circulated to workers, Tanoh said, as part of the inquiries, the bank’s governance committee would invite Mrs. do Rego to substantiate allegations she made in a letter to SEC last year.
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, built a massive reputation and according to her books garnered assets worth in excess of $20bn.

Ecobank’s suspension for unholy act by SEC: At the height of all these schemes in February last year across the month of March, the Securities and Exchange Commission (SEC) suspended Ecobank Plc from acting as a receiving banker and from all capital market activities.
The suspension, though was as a result of the role played by the bank in a complaint by Avil Services Ltd relating to a margin loan transaction with Arian Capital Management Ltd
Under the said transaction, Arian Capital Management Ltd (a fund manager) advanced margin loan to Avil Services Ltd which was secured by 555, 555 units of First Bank of Nigeria Plc shares belonging to Avil Services Ltd.

At the termination of the margin facility, Avil Services Ltd demanded for the lifting of the lien placed on the shares but was informed by Arian Capital Management Ltd that the said shares were used as collateral for a “Global Margin Facility” that was granted to it (Arian Capital Management Ltd) by Ecobank Nigeria Plc in a tripartite arrangement.
Dissatisfied by the explanation offered by Arian Capital Management Ltd, the SEC in May 2012, suspended Arian Capital Management Ltd from all capital market activities for withholding the said shares and accruals thereon.
 In July 2012, the SEC pursuant to Section 13 (r) and (t) of the Investments and Securities Act 2007 requested further explanation from Ecobank Nigeria Plc on the consent of Avil Services Ltd in the  “Global Margin Facility”.

This explanation did not come from Ecobank Nigeria Plc despite repeated demands for it.
The suspension was imposed on Ecobank Nigeria Plc on the 5th February, 2013 for its perceived connivance with Arian Capital Management Ltd to convert the 555, 555 units of First Bank of Nigeria Plc shares belonging to Avil Services Ltd.
The suspension was in force until the bank cleared all the issues relating to the use of Avil Services Ltd’s shares as collateral for the Global Margin Facility it granted Arian Capital Management Ltd.
Ecobank’s lame defence: According to Reuters, “spokeswoman for Ecobank Nigeria, Adenike Laoye said the bank takes payments for retail participation in initial public offerings (IPOs), but does not deal in the secondary market”.

The Togo-based bank's Nigerian capital markets arm, ESL Securities Limited, does deal in the Nigerian markets but is not covered by the ban. "We actually don't carry out capital market activities any more. In terms of the business it's not affecting us," she said.
The image that ban placed on the bank became a widespread function amongst the placid Nigerian media whose banking reportage had been on the low due to the nature of the industry which is tied to subventing the media industry with choice adverts.

Laoye said the dispute concerned shares valued at 11 million Naira ($69,300), and that Ecobank did not know that Arian did not own the shares. Will the Marines ever believe this kind of defence. She said they had issued a cheque to the SEC to settle the amount. The suspension by SEC was lifted in April leaving the bank in the cold for a month.
Are these facts also true?: Pan-African banking group Ecobank has a presence in 32 African countries and around 9.4 million customers, some 6.4 million of them in Nigeria.

February 11, 2014