The challenges ahead for new Ecobank chief Ade Ayeyemi
Outgoing Ecobank Transnational Incorporation (ETI) CEO, Albert Essien managed to end a boardroom crisis that threatened to cripple the bank in the space of a year, during which he was the CEO of the pan-African bank. Having achieved relative calm for the pan African bank, Ade Ayeyemi, the current Chief Executive Officer of Citigroup’s sub-Saharan Africa division, has been chosen to replace him. Ade has been handed the mandate of leading the lender to its next development phase.
Although Ayeyemi is meeting a more stable bank, he has a lot to do in cementing shareholder confidence which shaken during the crisis. He is also expected to prove the International Monetary Fund (IMF) wrong for claiming the bank poses a major threat to Africa’s financial stability.
The boardroom crisis of 2013 over outstanding debts owed by businesses associated with its chairman, Kolapo Lawson led to the sack of chief executive Thierry Tanoh and the election of a new board. The Financial Times reported that Nigeria’s Central Bank (CBN) told Ecobank in April 2013 of then Chairman Kolapo Lawson’s alleged failure to pay N1.4 billion naira owed to the Asset Management Corporation of Nigeria (Amcon). Tanoh was also said to have failed as CEO to inform the board of the debt.
About four months later, the board sacked Laurence do Rego, ETI’s executive director of finance and risk, who had earlier been accused by Tanoh of falsifying some of her qualifications. She reacted to her sack by sending a letter to Nigeria’s Securities and Exchange Commission (SEC) alleging that Lawson and Tanoh were attempting to sell non-core assets below market values. She also accused them of attempting to manipulate ETI’s 2012 financial results, while inflating Tanoh’s bonus.
The lender’s trouble was compounded in January 2014 when SEC’s investigation of ETI’s corporate governance practices showed “an absence of a clear vision and strategy to drive the institution, inadequate transparency in the recruitment procedures and mechanisms for Board members and executive staff which fostered conflicts of interest”.
The appointment of Essien in March was therefore a breath of fresh air for the company, with investments from QNB and Nedbank soon following. Essien has successfully cleared most of the mess he met when he became CEO, but the bank’s image remains tainted with allegations of poor corporate governance and its repeated sourcing capital to fund operations.
Hopes are high within the Ecobank board that Ayeyemi is the right man to lead the lender through the next phase of its development and beyond as a world-class pan-African bank. “Ade is a truly outstanding individual with deep knowledge of banking across Africa, and we welcome him to the Board,” Ecobank Group Chairman Emmanuel Ikazoboh, said.
As at 12:58 GMT, ETI’s shares on the Nigerian Stock Exchange (NSE) sold at N21.80 per share and GHs0.37 on the Ghana Stock Exchange.
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