Pan-African lender Ecobank Transnational has called an emergency board meeting to discuss moving the bank’s headquarters out of Togo, in the wake of a court ruling that awarded its controversial former chief executive, Thierry Tanoh, $11.6m in damages for wrongful dismissal.
Tuesday’s court ruling follows a decision last month by a commercial court in Ivory Coast — where Mr Tanoh is now deputy secretary-general at the presidency — to order the bank and one of its leading shareholders pay the former CEO $15m in damages for defamation.
That case related to allegations of mismanagement at Ecobank that led to Mr Tanoh’s downfall.
Ecobank disputes the jurisdiction of both the Togolese and Ivorian courts over the cases, and has appealed against both decisions.
On Tuesday, the bank said: “ETI does not accept the legitimacy of the Togolese court’s ruling because the court does not have legal jurisdiction over Mr Tanoh’s employment contract”, noting that the contract was governed by English law.
It added: “Jurisdiction technicalities aside, and on substantive matters alone, Ecobank stands firm on the decision to relieve Mr Tanoh of his responsibilities and rejects the excessive sums of money that he is demanding in local courts in Togo and Côte d’Ivoire. His removal from office was fully justifiable.”
Mr Tanoh could not be reached for comment.
Officials at the bank said their concerns over the legal process could oblige them to move the group headquarters out of Lome, the Togolese capital, where it was set up in the mid-1980s by businessmen from across west Africa.
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“We are calling a special board meeting next week to review these issues and to make a decision over what is best for the institution and whether we should move to a jurisdiction where there is a secure legal environment,” a senior bank official told the FT.
Ecobank has initiated arbitration proceedings in Paris, and argues that Mr Tanoh’s contract “expressly provides that all disputes should be governed by English law and settled by international arbitration”. It has also lodged a complaint against Mr Tanoh for allegedly taking files and computer records relating to his time as CEO.
Mr Tanoh was removed unanimously by the board of the bank last March, following a protracted dispute over alleged governance issues that threatened Ecobank’s position as the largest banking network in sub-Saharan Africa.
He had been placed under investigation by Nigeria’s capital markets regulator in 2013 after Ecobank’s executive director in charge of risk and finance accused him of corporate governance breaches. KPMG, the global accountancy firm enlisted by the Nigerian regulator to carry out the investigation, was scathing about the way Mr Tanoh had agreed a bonus and salary increase in 2012 with the former ETI chairman.
Mr Tanoh denied the allegations against him and fought for nine months to keep his post, at times with the backing of the Ivory Coast government. In the wake of the defamation judgment in his favour last month, his lawyer, Soualiho Lassoman Diomande, said: “It’s a trial that re-establishes the honour and reputation of Thierry Tanoh.”
Ecobank officials said Mr Tanoh had earlier refused a termination settlement worth more than twice the sum he was entitled to under contract.
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