Ecobank Extorts
What Ecobank does not want you to know
The governance challenges within Ecobank Transnational Incorporated (ETI) have persisted for some time, predating the recent incidents involving a UAE-based company and its founder. ETI faced a well-publicised governance crisis in 2013, which has left a lasting impact, marked by a series of ratings downgrades and management instability, including a former CEO suing the company.
Despite changes in leadership, such as current CEO, Jeremy Awori, issues surrounding governance persist, as evidenced by recent actions involving a senior member of ETI’s subsidiary, ETI Specialized Resolutions Company (ETISRC).
During the past two years, the UAE company and its founder have been embroiled in an unfair and unjust controversy involving what appears to be an extortion scheme orchestrated by ETISRC, which according to legal counsel, can only be aimed at recovering losses incurred by the bank nearly a decade ago. The current leadership of ETI, including CEO Jeremy Awori, are fully aware of the facts of this case but have failed to engage or rectify this situation in any meaningful way, suggesting that ETISRC’s actions have their backing.
The UAE company have rejected the allegations and condemned the initiation of a legal case against them. The validity of these charges is currently under review by the Federal High Court of Nigeria.
The Facts
In September 2014, the UAE company helped Ecobank Nigeria support their importing clients to get credit terms on their imports to Nigeria, where their supplier was unable to discount Ecobank’s letter of credit (“LC”). Ecobank would issue the LC in favour of the UAE company, who would receive the documents from the supplier, discount the LC, and pay the discounted proceeds to them less than the UAE company’s fee.
The UAE company shared a number of term sheets with Ecobank, and once terms were agreed upon, Ecobank forwarded the UAE company term sheet to Mr Prem Garg, the Chief Executive of Ecobank’s existing client Agrico-Agbe, and its affiliate Little Rose Trading LLC. It was at Ecobank’s request that the UAE company was involved in this transaction.
During November 2014 and February 2015, the UAE company provided this service twice and completed two transactions with Mr. Garg’s companies totalling USD$42,485,900.00 and earned a total fee of USD$83,797.40 (some 0.5%).
Ecobank suffered a loss from transactions with Mr Garg, of which the UAE company was first made aware in 2018.
Ecobank conducted an internal review and, in 2020, concluded that the UAE company bore no responsibility for the losses, established credit facilities for the UAE company and issued LCs on its behalf.
In March 2022, the UAE company received a letter advising that the Nigerian Police Force was “investigating a case of Conspiracy and Fraudulent Conversion reported by Ecobank”.
There is absolutely no basis for Ecobank and the Specialized Resolutions Company to have led this criminal complaint against the UAE company.
In June 2022, the Nigerian Federal High Court ordered a stay of all further action pending the determination of the UAE company’s challenge to the demands of the Nigerian Police Force that the UAE company’s officers attend an interview in Nigeria upon Ecobank’s complaint. That challenge remains pending before the Court.
In April 2023, the UAE company was permitted to file a Committal Application against the Nigerian Police Force and the Nigerian Federal Ministry of Justice for contempt of court and breach of the Nigerian Federal High Court order.
Based on court filings, not only have Ecobank Nigeria and ETI instigated an unfounded legal case in the Federal High Court of Nigeria against the UAE company, they also appear, through the Federal Ministry of Justice, to have abused the process of the courts by procuring the issuance of a warrant for the arrest of that the UAE company’s officers for failing to attend court.
More information will be released soon…
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