Ecobank board meeting blocked by court injunction

by Reuters
Tuesday, 25 February 2014 21:57 GMT

* Bank's top executives called for chief executive to step down

* Meeting unlikely to take place on Wednesday

* Bank under pressure over corporate governance (Recasts with board meeting blocked, adds quotes)

By Matthew Mpoke Bigg

ACCRA, Feb 25 (Reuters) - A key Ecobank board meeting at the bank's headquarters in Togo on Tuesday was blocked by an injunction filed by an individual shareholder at a court in the capital Lome, bank officials said.

The injunction appears to benefit chief executive Thierry Tanoh because it relieves pressure over a board meeting that could have considered his leadership in the wake of a letter from his top executives asking him to step down.

Ecobank, one of the largest financial institutions in sub-Saharan Africa, is attempting to reform its corporate governance after criticism from Nigeria's Securities and Exchange Commission.

A senior bank official said the shareholder filed the suit in a lower Togolese court, alleging it would be prejudicial to another 600,000 shareholders to hold the board meeting just a week before an emergency general meeting set for March 3.

"The situation is very fluid," said the official, who asked not to be named. The identity of the shareholder was not immediately available.

A source close to bank leaders said it was unlikely the meeting would take place on Wednesday as some board members had left Lome.

Ecobank's board has 12 members including chairman Andre Siaka, Tanoh and four other members of the Group Executive Committee that runs the bank.

Those four members called on Feb. 13 in an email sent by deputy chief executive Albert Essien for Tanoh to step down to resolve what they said was a long-standing crisis of leadership.

Shareholders on March 3 are set to vote on governance reforms including establishing a seven-member interim board. All five group executive members sit on the current board but only Tanoh would be represented on the interim board.

Former Ecobank chairman Kolapo Lawson, who stepped down in October, told Reuters at the weekend that Tanoh's opponents wanted to use Tuesday's board to force a vote on the chief executive's tenure.

Two analysts said they were surprised that board business could be blocked by a lone shareholder's suit and saw it as a fresh sign of a leadership rift they said was dangerous to the bank.

"That (the blocked board meeting) is not positive in terms of the bank moving in the same direction .... All the infighting needs to be sorted out for the bank to move forward," said Brian Mugabe, an analyst with South Africa-based Imara Africa Securities. (Editing by Andrew Roche)

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