Exclusive - EBRD head faces investigation call over dossier on directors

LONDON (Reuters) - Several member states have called for the head of the European Bank for Reconstruction and Development to be investigated over claims the lender inappropriately gathered personal information on some of its directors, according to a document seen by Reuters.

FILE PHOTO: President of European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti speaks during an interview with Reuters in Astana, Kazakhstan June 5, 2018. REUTERS/Mukhtar Kholdorbekov

The May 29 complaint against EBRD President Suma Chakrabarti was made by several board members, who represent some of the bank’s 67 member governments, to its chief compliance officer at the end of May, four sources told Reuters. All four were directors at the EBRD at the time.

“The President and ExCom (executive committee) members would seem to have put a repeated practice in place which involves collecting sensitive and personal information on Board Members,” the complaint, a copy of which was seen by Reuters, said.

“We hereby request that you, as Chief Compliance Officer, initiate a procedure … regarding alleged misconduct and alleged inappropriate behaviour by the President of EBRD,” the letter said. It was anonymously signed “a number of concerned board members and shareholders”.

The four sources said an external investigation had since been opened.

The letter of complaint said that on May 3-4 a number of board members anonymously received documents containing copies of email exchanges between the president and executive committee, as well as excerpts from other official bank reports, which contained personal information on board members compiled without their consent.

The letter said the language used in some of the documents appeared as “rude, unethical and derogatory”.

One of the sources said that seven government representatives had jointly filed the complaint.

Chakrabarti declined to answer questions on the matter when approached by Reuters. The EBRD’s Managing Director for Communications, Jonathan Charles, declined to confirm or deny the existence of the leaked documents or whether there was an inquiry.

“We would never comment on any alleged leaks of documents or alleged inquiries,” Charles said. “That should not be taken as either confirmation or denial of whether any documents or inquiries exist.”

Charles posted a tweet after the Reuters story was published, describing the piece as “inaccurate”. He declined to detail the inaccuracies to Reuters, reiterating that the bank will “never comment on alleged leaks”.

The British government, which put Chakrabarti forward for the EBRD president role in 2012, also declined to comment.

Reuters has not seen or been able to independently review the leaked documents or establish the reasons why they were produced.

The letter of complaint said that based on the contents of the leaked documents, “there is reason to believe” that “sensitive medical information” on one government-appointed director had been relayed to the executive committee, the EBRD’s top management body, without consent.

It also said that, based on the documents, there was reason to believe that members of the executive committee had “collectively and knowingly” misled another director to slow down a strategic decision and “planned and taken measures” to influence the composition of influential committees at the bank.

The letter was written on EBRD headed paper and referred in depth to technical details of the bank’s code of conduct.


In another letter seen by Reuters, Chakrabarti wrote to EBRD board directors on May 4, days after the documents were said to have been leaked. He said that he had been “made aware that some of you have been sent, anonymously, sensitive official bank documents.”

In the letter, he said the matter would be looked into by the bank’s chief compliance officer but questioned whether it was a deliberate attempt to stoke divisions within the EBRD.

“It seems to me that both the act and its timing are designed to try to both divide Board colleagues and to create a rift between Board and management,” the letter said. “We must not let either of those things occur.”

The letter did not specifically refer to any dossier containing personal information.

The EBRD declined to comment on the May 4 letter.

Two of the sources said the EBRD’s chief compliance officer had referred the complaint from the group of board members to the head of the bank’s audit committee, who then convened a broader committee to assess it. The two sources said that committee decided to bring in an external investigator.

One of the sources said the external investigation was being carried out by Swiss law firm Lenz & Staehelin.

Two spokeswomen for Lenz & Staehelin did not respond to e-mailed and phone requests for comment.

The EBRD’s secretary general and the head of its audit committee also did not respond to requests for comment.

The EBRD was founded in 1991 by the international community to help the communist Eastern Bloc transform to capitalism after the Cold War. The bank has seen rapid expansion in recent years into the Middle East and North Africa.

It is owned by 67 governments, invests around 10 billion euros ($11.5 billion) a year in almost 40 countries, but has faced a run of turbulence in recent years.

In 2014 it stopped lending in Russia, once its biggest market, after Moscow’s annexation of Ukraine’s Crimea, while Britain’s vote to leave the EU in 2016 has stirred debate about its location in London and the fact that a Briton runs it.

Editing by Catherine Evans and Nick Tattersall