Divisions over control mount at Ecobank The battle for control of Africa's most geographically diverse bank may yet be long and bitter. Wracked by recent allegations of mismanagement and divided over how to respond, the board of Ecobank Transnational (ETI) gathered on Friday for its third meeting in just over a month following an appeal by Gervais Koffi Djondo, the octogenarian co-founder of the bank, for the resignation of the chairman. There was no resolution at Friday's heated meeting. However the board appointed Seydou Ba, a distinguished Senegalese judge and former president of the International Labour Organisation to open an inquiry. Ecobank will also hire a top global accountancy firm to review corporate governance and advise on compliance with regulatory requirements, the board said in a statement. Kolapo Lawson, the chairman of the bank, and Thierry Tanoh, the chief executive - headhunted to take over last year from a position as a vice-president of the International Finance Corporation - have been embroiled in a string of controversies involving debts linked to the chairman, Mr Tanoh's bonus and salary package, and alleged plans - strenuously denied by both men - to sell off bank assets on the cheap. Nigeria's capital markets regulator said last week that it was hiring KPMG, the accounting firm, to assist with its own investigation. Some stakeholders see the removal of the chairman and possibly CEO too, as the only way to restore confidence among depositors, shareholders and staff. Allies of the chairman suggest the flurry of allegations and leaks are part of a conspiracy to wrest control of the bank and believe they can ride this out - at least until investigators determine whether corporate governance breaches have indeed taken place. In regional financial circles, there is also speculation that the storm could serve to soften the bank up for takeover. After a decade of expansion, Ecobank is uniquely well placed to tap into African growth. South Africa's Nedbank has options to convert a $280m loan to ETI into equity later this year. This would give it a 20 per cent stake, and put groups from South Africa, whose Public Investment Corporation is already the largest shareholder, in a dominant position in what originated as a west African institution. The regional dynamic is another source of tension. The saga is resonating in Africa partly because of the bank's special status. Many past efforts at creating pan-African businesses failed. Ecobank - founded by private shareholders across 14 countries in west Africa to promote regional integration and development, has proved an exception. "The vision of the bank was let's create something that will unite people and can show that Africans are not always bickering: that they can set out a high goal and work towards it," says Mr Lawson, whose father helped found Ecobank with Mr Djondo from Togo a quarter century ago. More recently, as the bank has blazed a trail across borders, building a network in 34 African countries with assets worth more than $20bn, it has become emblematic of a dynamic new class of African business rising to opportunities provided by surging continental growth. Foreign investors are watching keenly for signs that regulators deal firmly with issues raised, in particular in Nigeria, where the recovery of the banking sector following a 2009 crash is drawing renewed investor appetite. The crash exposed a nexus of political and business interests with billions of dollars in debts. Subsequent reforms have aimed to place more effective oversight on bank executives. If Ecobank has a problem, too many bank systems in Africa will have one, too. We have to be very deliberate...it is a bank that holds a lot of promise and is much more important than any individual," says a senior finance official in the region. Trouble first surfaced at the pan-African lender in April when the Central Bank of Nigeria (CBN) sent a letter to Mr Tanoh, drawing attention to the ETI chairman's "huge non-performing facilities." The letter questioned Mr Lawson's fitness for office, fuelling concern among leading institutional shareholders. Mr Lawson has since repaid debts to ETI, and reached agreement on scheduled repayment of outstanding debts to Amcon, the asset management corporation of Nigeria set up to absorb non-performing loans following the 2009 crash. The bank's troubles however, did not end there. A leaked response from the suspended executive director in charge of finance and risk, Laurence do Rego, to inquiries from Nigeria's Securities and Exchange Commission raised a range of fresh issues now under investigation. Regulators in Nigeria are wary of any trouble in the financial sector which could dent confidence in institutional reforms. But the CBN has been limited in its capacity to act because Ecobank's pan-African holding company, based in Togo, does not fall under its regulatory purview. Lamido Sanusi, Nigeria's central bank governor says that he has recently sought to rectify that regulatory issue with other regional regulators as part of broader efforts to strengthen cross border banking supervision. He said that in future Ecobank Transnational will be supervised by "a college of supervisors in which the CBN will be a part."