UPDATE 4-Nigerian watchdog tells Ecobank to reinstate ex-finance chief

Wed Feb 19, 2014 3:58pm EST

Related Topics

* Laurence do Rego suspended last August, left in January

* Ecobank has denied do Rego allegations over 2012 results (Adds detail)

By Tim Cocks and Matthew Mpoke Bigg

LAGOS/ACCRA, Feb 19 (Reuters) - Nigeria's financial watchdog told pan-African lender Ecobank to reinstate its former finance director pending the result of a probe into her allegations of breaches in corporate governance rules, the regulator said on Wednesday.

The Securities and Exchange Commission's (SEC) order piles more pressure on the leadership of one of sub-Saharan Africa's largest financial institutions a week after top executives called for the resignation of Chief Executive Thierry Tanoh.

Analysts said it could also renew concerns among shareholders about how the bank is run ahead of an extraordinary general meeting on March 3 that will vote on governance reforms.

An Ecobank spokesman said the bank had received a letter from the SEC regarding its former finance director, Laurence do Rego, but it declined to comment further.

A letter exchange between Ecobank and the SEC seen by Reuters on Wednesday shows the regulator had already told the lender to reinstate her in a letter dated Jan. 9. Tanoh replied five days later that fulfilling this demand would be criminal under the law in Togo, the location of Ecobank's head office.

Do Rego was not available for comment.

The SEC began an investigation last year after do Rego told regulators she was pressured to misstate 2012 financial results. Ecobank denies her allegations.

The bank said she had left in a brief statement in January that gave no details. Do Rego was in a dispute over her professional qualifications and had been suspended prior to making the allegations, according to bank officials.

Do Rego did not comment on the reason for her departure at the time and did not respond to a similar request for comment on Wednesday.

SEC spokesman Obi Adindu said on Wednesday the request for do Rego's reinstatement was in line with the regulator's rules. "It's the whistleblower protection element," he said.

Do Rego should not have left the bank before the outcome of the SEC's investigation, he said.

The bank operates in 33 African countries and is listed in Nigeria, Ghana and on the West African regional exchange BRVM.

South Africa-based Imara Africa Securities analyst Brian Mugabe said the board and major shareholders would likely support the bank's position because they would have been aware of the reasons behind do Rego's departure.

Ecobank is under pressure to reform after the SEC said in January there were failures in the board's ability to manage its own activities, monitor management and oversee ethical behaviour.

For shareholders, including South Africa's Public Investment Corporation (PIC), the outcome of the probe and the status of do Rego are central to their view on the bank's leadership, said Johann Scholtz, head of research at Africafocus Securities in South Africa.

"The concern for Nedbank or PIC would be the exact nature of the investigation by the SEC and the reasons for the financial director being suspended. All of that would raise some pretty serious concerns," Scholtz said. (Editing by Erica Billingham and David Evans)

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