The Canadian company specializing in real estate finance, Westbridge Mortgage Reit, provided
a formal denial of the information disseminated according to which an agreement had been reached with the
Ivorian government for the takeover by the State of Côte d'Ivoire of its shares sold in the capital of the
Banque de l'Habitat de Côte d'Ivoire (BHCI) following a privatization operation.

Indeed, in a note dated November 13, 2019, first unsigned, then later identified as
from the Ivorian Ministry of Economy and Finance, published on social networks, it was announced
the decision of the Ivorian government, "by mutual agreement with the buyer, Westbridge Mortgage Reit,
to cancel the sale of its shares, and to regain control of the bank".
An announcement that is all the more surprising in that it came quite late in the evening after the holding of a
Council of Ministers (no longer empowered to take such a decision) whose final communiqué does not in any way
mention of this alleged "agreement".

Contacted by the Ecofin Agency, the Managing Director of Westbrige and also Managing Director of BHCI,
JD Diabira (photo) wanted to be very clear. “We (Westbridge) have no agreement with anyone to resell
our shareholding. Anyway not yet. And we have not started discussions to this effect.
We are in possession of our registered shares representing 51.6% of the shares. And with all of
shareholders representing more than 96% of the shares, none have sold their shares,” he insisted.

Clarifying "a bank hostage situation"
In an internal note addressed to its employees within the bank, yesterday Tuesday, that the Ecofin Agency
been able to consult, the Chairman of the Westbridge Board of Directors, James Clayton, also wanted to
reassuring. "At the outset I would like to say that neither Westbridge nor any of the Bank's other shareholders has
recently agreed with the government," he said.
Stating, however, that Westbridge did indeed write to the Ivorian government on October 28 "to
seek the help of the Primature to clarify the dangerous hostage situation in which the bank,
its employees and its shareholders were".

Through this letter, Jaymes Clayton makes it known that Westbridge was asking for "help" from the Prime Minister
Ivorian, Amadou Gon Coulibaly, "to reach a quick conclusion that allows either (1) Westbridge
to take effective control of the Bank of which it is the majority shareholder, or (2) to initiate a dialogue
to free us and the Bank from the dangerous situation in which it finds itself”. A
approach which, he points out, was also endorsed at the General Meeting of Shareholders of 31
October, in the presence of the representative of the State and in the presence of observers from the
WAEMU Banking Commission.

This request for an audience with the Ivorian Prime Minister, which has still not taken place, itself follows a
other letter sent since September 20, 2019 by Westbridge to the Ivorian President, Alassane Ouattara,
to inform him of the "numerous and sometimes insurmountable pitfalls that are put in their way by
Côte d'Ivoire, in the context of the takeover of the BHCI".

“Prevent Westbridge from taking control of the bank”
This new episode adds to a crisis that has been shaking the bank for some time now. And for
the leaders of this institution, all of this is part of the continuity aimed at preventing Westbridge "from
take effective control of the bank.

According to Jaymes Clayton, the "poor governance" situation experienced by the bank in recent months is
exceptional, in the dangerous blockage it has created. “Shareholders who are asked for
increasing capital contributions are effectively excluded from the management of the Bank”,
he is indignant.

Revealing that "in fact, the BHCI is controlled and managed by individuals who are neither shareholders nor managers
fact. As you all know today, the Minister of Finance and the Director of Cabinet of the Ministry of
finances are in control of the management of the Bank, and have been for months, thus creating confusion
legal action prejudicial to the Bank and to the interests of legitimate shareholders”.

An audit that set fire to the powder
For the leaders of Westbridge, it all starts with the granting of the banking license authorizing a
change in the structure of share capital. The sesame granted in December 2018 was only given to them
on April 30, 2019, four months later.

Then comes a diligent audit on the past management of the bank which will have revealed 12 billion
FCFA of bad debts, including FCFA 4 billion surprisingly from transactions associated with
members of the Ivorian government. That is an amount of bad debts 4 times higher than what
the agreement to transfer the shares of the State to Westbridge provided for. A discovery that will have won
stride the former managing director, Abou Touré, himself a former member of the Banking Commission of
WAEMU.

“And since then, the harassment that we had until then suffered in silence has taken on proportions and a turn
very aggressive. We believe that the audit investigations that we have carried out on past management are
partly at the source of this recent increase in harassment", said, on condition of anonymity, a
source within the bank.

“There is a fear on the part of some powerful men in the region about the too many
hidden bad debts that the bank accumulated during the years 2015 to 2018. They think
that these issues can serve as political capital in the run-up to the elections" adds the
same source.

In any case, on Monday, September 16, J. D Diabira received a summons to appear at
a hearing under “emergency procedure” on the premises of the Commission Bancaire. two more days
Earlier, the bank had received a preliminary report of some 357 findings and observations resulting from a "
Specific Mission” of the Banking Commission, mission carried out from August 22 to September 10. Despite the
BCEAO rules giving the Bank 30 days to respond, BHCI will be entitled to only 48
time.
Moreover, during the hearing, neither JD Diabira, Managing Director of the bank, nor Abdoulaye Gbané, the
Deputy Director-General, will not have the opportunity to explain or respond to the accusations made by the
Secretary General and read before the members of the Banking Commission. Curiously enough, the former DG
fired from the BHCI (and former BCEAO executive) had the opportunity to read four pages of speeches.
Dismissal intervened on a unanimous vote of the members of the Board of Directors of the bank on 18
July 2019 that the Banking Commission presented to its hearing as a “resignation”.

In addition, in October 2018, the General Assembly and the Board of Directors of the Bank
approved and ratified the decision to recapitalize the bank, the first since 2009. Of the 5 billion
FCFA of initial recapitalization, NSIA and Westbridge proceeded to the subscription and release of more 3.6
billion FCFA, which allowed the bank to be up to standard in terms of minimum capital standards, the
first time in a decade.

However, this recapitalization, moreover insufficient, was nevertheless vitiated by a defect of form which
risk of invalidating it. Indeed, the absence of the Statutory Auditors at the General Meeting
which approved the recapitalization operation is, in the eyes of the Regulator (the Commission Bancaire), a
possible cause for invalidation. However, according to the leaders of Westbridge, "such an invalidation will put
into question the entire current capital structure of the bank and all the bailout efforts that we
have been leading for months”.

An uncertainty that is likely to discourage investors
"Along with all shareholders, Westbridge believes that the liquidity problem facing the bank
is by no means an insurmountable problem,” notes James Clayton. The fundamentals of
bank remain solid and do not call into question its ability to continue to operate. On the other hand,
he worries, "the issue of governance and the uncertainty it engenders are likely to discourage
the most confident investor. It seems unrealistic to us to think that investor-owners will
commit to investing in a bank that they do not control".

As a reminder, the process of acquiring BHCI began in 2017 with the decision of the government
Ivorian to sell his shares in the capital of the bank. The signing of the contract for the transfer of the shares of the
bank between Westbridge Mortgage Reit and the State of Côte d'Ivoire took place in January 2018. Thus allowing
the BHCI to benefit from a recapitalization bringing its capital to 4.7 billion FCFA where it seemed to stagnate
since 2005 to 10.6 billion FCFA, of which 3.6 billion FCFA were actually released.
At the end of 2018, the BHCI thus posted equity of more than 12 billion FCFA and a deterioration rate
of the portfolio returned below 16% against 24% in 2017, and 36% in 2015.
The capital of BHCI counts as the largest shareholders Westbridge (51.6%); SCI Demack
(33%); NSIA (10%); SOMAVIA (4%) and BOAD (1%).

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