Ecobank decries $11.6m ruling over dismissal of ex-CEO

The management of Ecobank Transnational Incorporated (ETI), on Wednesday said it would appeal the ruling of a Togolese labour court which awarded Thierry Tanoh, its sacked former chief executive, $11.6 million damages for supposed ‘wrongful dismissal.’

A statement by Richard Uku, Group Head, Corporate Communications, of Ecobank Group described the decision as “disappointing, but not surprising.”

The group, with headquarters in Lome, the Togolese capital, with shares quoted in Nigeria, Ghana and Cote d’Ivoire, said it “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.”

The statement reiterated its earlier claim that the Tanoh’s contract, which he signed before assumption of his post as Ecobank Group CEO in July 2012, specifies that it is governed by English law, a fact he knows of.

Uku noted that “the contract expressly provides that all disputes shall be settled by international arbitration in London by an arbitrator appointed by the President of the International Chamber of Commerce in Paris.

“The contract grants exclusive jurisdiction to the English courts in relevant matters. Tanoh, an Ivorian national with permanent residence in the United States during his tenure as ETI Group CEO, rejected these express provisions of his contract, preferring instead to pursue litigation in a Togolese court for reasons best known to him.

“This is the second time in as many months that Mr. Tanoh has sought to extract substantial sums of money from Ecobank on claims which he knows would not stand up in most courts of law.”

The group noted that just last month, an Ivorian commercial court, ruling in a civil suit filed by Tanoh against ETI, Public Investment Corporation (PIC) and Dr. Daniel Matjila for ‘defamation,’ ordered it to pay the sacked CEO $15 million. This decision, it noted, is equally being challenged already.

The Ivoirean court presided over by Francois Koumoin, according to Reuters, ruled that a letter written by Ecobank board member, Daniel Matjila, last year and published in the media tarnished Tanoh’s image.

Matjila is chief executive of South Africa’s Public Investment Corporation, which was the largest shareholder in Ecobank until Qatar National Bank bought a stake of more than 23 per cent in September.

“It’s not a fair judgement and we don’t think that the commercial court is the competent court in which this matter should have been held,” Uku said in January, while reacting to that ruling.

“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 Cote d’Ivoire.

“His removal from office was fully justifiable. Many of ETI’s founders, shareholders, directors and a number of Ecobank’s regulatory authorities were resolute in their calls for Mr. Tanoh to step down. This was after due consideration of an overwhelming amount of compelling material, which showed that his dismissal was clearly warranted.

“ETI has lodged a criminal complaint against Mr. Tanoh for taking away all official files that he handled as Group CEO of Ecobank, and for deleting all electronic files from the official computers that he used.

“These unbelievable decisions by the local courts in Cote d’Ivoire and Togo amount to self-inflicting damage, for they send unambiguously negative signals to the business community. They are a deterrent to local and potential foreign direct investment in both countries. They raise serious questions for any business entity about how independent or objective a ruling they could obtain in potential litigation. The ETI Board will hold a special meeting next week to consider its options in the wake of these decisions.

“ETI is confident that it will win its appeal of this judgment, and it continues to keep its focus on its most fundamental priorities, which include the business of banking, doing well by its staff, its customers and its shareholders. Ecobank continues to enjoy strong performance and high shareholder confidence. Ultimately, it is a unique pan-African 2 institution that remains committed to contributing to economic development and financial integration in Africa.”

Tanoh lost his job in March last year, after months of board squabbles that raised questions about the regulation of Ecobank, one of Africa’s biggest financial institutions.

Tanoh, an Ivorian, who now works for Ivory Coast President Alassane Ouattara as Deputy Secretary General in the presidency, was replaced by his deputy Albert Essien.

He was removed as chief executive of the Lome, Togo-based bank in March after Nigeria’s Securities & Exchange Commission (SEC) probed allegations of management fraud and poor corporate governance at the pan-African banking group.