PIC fumes over R175m Ivory Coast slap

The Public Investment Corporation is spitting mad at Ecobank's former CEO, Thierry Tanoh, for suing it as well as the bank.

The Public Investment Corporation is spitting mad at Ecobank's former CEO, Thierry Tanoh, for suing it as well as the bank.

This week Ecobank, of which the PIC owns almost 14% and Nedbank 20%, was ordered by the Abidjan Commercial Court in Ivory Coast to pay Tanoh R175-million for defamation.

The fine will not have a significant affect on Ecobank's bottom line, according to Richard Uku, Ecobank's head of communications, who said: "We customarily make provision for unforeseen circumstances, and this is not a significant one."

However, the PIC, which previously called on Tanoh to step down after allegations of mismanagement that he denied, said it would challenge the decision of the Ivory Coast court.

The PIC said it was unable to reveal the details of the appeal, given that the matter had yet to be heard by the courts. But Africa's largest fund manager said it was resolute that there were "serious legal and factual inaccuracies" in claims made by Tanoh regarding the role of Dan Matjila, PIC's boss (and against whom Tanoh also laid claims) and the PIC in the matter.

Nedbank chose to keep mum , referring queries to Ecobank.

Uku said the group did not recognise the Abidjan Commercial Court as a "competent" court to hear the civil suit filed against the lender because it did not have jurisdiction in the matter.

"Furthermore, its ruling is an excessive and irrational one, which sets a dangerous legal precedent and also sends an unwelcome signal to potential investors in Côte d'Ivoire. It does not bode well for the business community in that country," Uku said.

Quizzed on whether Nedbank should be worried about governance issues at Ecobank, Uku said none of the shareholders should be concerned.

"We are a stable institution that is doing well and doing right by its shareholders."

Tanoh, who was at the centre of governance issues in 2013 and early 2014, was relieved of his position by the Ecobank board in March 2014.

In a separate case, Tanoh has also sued Ecobank in Togo, its home market, for the unlawful termination of his contract. He is seeking $18-million (about R205-million) in compensation.

The bad blood between Ecobank and Tanoh is so toxic that before he left the group, it is alleged, he deleted all electronic files from the computers he used as the company's boss. Ecobank has since lodged a criminal lawsuit against him.

Troubles surfaced when a leaked letter by then suspended head of risk Laurance do Rego, sent to Nigeria's Securities Exchange Commission, said he had been pressured to manipulate the bank's results and write off debt by the group's former chairman, Kolapo Lawson.

Do Rego also said Tanoh had planned to sell certain assets below market value.

Nigerian regulators, who are still trying to clean up their image following the 2009 banks crisis, are alert to any mishaps that could further hurt international confidence in investing in the country.

Nigeria's central bank could not act against Ecobank as the lender is based in Togo and does not fall in Nigeria's regulatory sphere.