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Ecobank Crisis: SEC Steps in, Probes Bank’s 2012 Result

First Bank Nigeria

up2072013-Ecobank-officeThe Securities and Exchange Commission is investigating Ecobank Transnational Incorporated over an alleged misstatement of its 2012 performance.

The Communications Adviser, SEC Nigeria, Mr. Obi Adindu, confirmed this development in response to a text message sent by our correspondent on Friday.

“The regulator is on top of the issues and has engaged the authorities of Ecobank on the corporate governance and investor protection issues thrown up by the reports,” his response read.

Our correspondent could not get an official statement to that effect from Ecobank Nigeria and was referred to the Head Office in Togo, but an email sent to the Head Media and Group Communications, Mr. Nabi Ouedraogo, was not responded to as at press time.

However, a source in Ecobank, told our correspondent that the bank was not aware of such development.

“The only investigation I know of was that which had to do with our chairman, but he was cleared by the regulators as well as the government of all the allegations,” the source said. A Reuters report on Friday quoted a source at SEC as saying that SEC held meetings with Ecobank’s board directors on August 6 to discuss the issue, which was raised by a suspended former head of finance at the bank.

The reported said that the source did not elaborate as to what the bank was accused of misstating.

It added that Ecobank acknowledged that there was an investigation, giving no details, and said it was fully cooperating with the SEC.

The source said the regulator had sent queries about Ecobank’s 2012 performance to all the directors, in line with the International Finance Corporation corporate governance code.

In March, Ecobank, which has operations in 32 African countries, said its 2012 pretax profit rose to its highest ever level of $348m, up a quarter on the same period a year ago.

“The core element (of the allegation) is on material misstatement of facts on (Ecobank) performance,” the SEC source said. This may also affect whether or not a bonus awarded to the Chief Executive Officer, Mr. Thierry Tanoh for that year was proper.

“All the executive directors have been issued a specified questionnaire on matters emanating from the petition and responses are awaited,” he said.

The initial complaint to the SEC came from the bank’s suspended Head of Finance, Mr. Laurence do Rego, the source said.

“I can confirm that our Board of Directors met with the SEC in early August and that we are …. in continuing dialogue with them. We are happy to offer them our ongoing cooperation,” Ecobank spokesman Jeremy Reynolds told Reuters by telephone.

He said do Rego, who joined the lender eleven years ago, was suspended because she falsely claimed to be a qualified accountant. Do Rego had not responded to the bank’s invitation to meet the board of directors and substantiate her claims.

Do Rego could not be immediately reached for comment.

Ecobank has been in the spotlight over debts owed by businesses associated with its chairman Kolapo Lawson, but the SEC source said the regulator was now satisfied there was nothing untoward about them.

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