By Margot Patrick and Max Colchester

LONDON--Just over a year after Bob Diamond founded Atlas Mara Ltd to build an African banking empire, problems are cropping up.

Some investors are questioning the lavish pay doled out to managers at the investment vehicle set up by the ex- Barclays chief executive. Local regulators have delayed a key Atlas Mara hire. The vehicle's publicly traded shares have nose dived. And corporate-governance experts are criticizing a personal shareholding by Mr. Diamond in one of Atlas Mara's acquisition targets, which wasn't fully disclosed until months after Atlas Mara offered to buy it.

Atlas Mara executives say they aren't daunted.

"Our thesis is 100% intact," CEO John Vitalo said in an interview. "We're building the premier sub-Saharan African financial institution by making a number of acquisitions to establish our geographic footprint, then will integrate and grow those acquisitions."

A spokesman for Mr. Diamond said he wasn't available to comment but that he had adhered to all regulatory requirements.

Regulators forced Mr. Diamond out of the chief executive job at Barclays in July 2012 after a series of clashes with U.K. authorities. A year later, the American investment banker resurfaced with a new plan: build a bank to cater to Africa's fast-growing companies and its large population without bank accounts.

Mr. Diamond and a young Dubai-based entrepreneur incorporated Atlas Mara in the British Virgin Islands. That location means Atlas Mara's holding company's operations aren't supervised by any financial regulator and it isn't subject to many of the U.K. rules that apply to British companies. However the banks in which it is invested are supervised by local regulators. The vehicle, listed on the London Stock Exchange, has raised a total of $625 million from investors, including big names such as Janus Capital Management LLC and Wellington Management Co. Atlas Mara has a " standard" listing in London, which is subject to fewer rules and disclosure than marquee companies.

Today, Atlas Mara has interests in banks operating in Nigeria, Botswana, Zimbabwe, Tanzania, Zambia, Mozambique and Rwanda. The group controls total assets of about $2.6 billion.

Mr. Diamond has a 3.76% stake in Atlas Mara and sits on its board. He doesn't have an executive role, but he helps the vehicle raise money, meets with investors and advises on strategy, according to Atlas Mara officials. Last week, when Atlas Mara reported its first annual results, Mr. Diamond was in New York to discuss the numbers with investors.

Atlas Mara's strategy is a work in progress. "His business instincts are in the right place," said Léonce Ndikumana, a professor of economics at the University of Massachusetts. "Banking is consistently one of the most profitable service sectors in Africa."

In one of his first forays into Africa, Mr. Diamond in July 2013 invested EUR8.2 million ($8.8 million) in a Frankfurt-listed company called ADC African Development Corp., according to regulatory disclosures. It aspired to create a sub-Saharan banking franchise and already held stakes in a couple of African banks. The investment was made via a Cayman Islands vehicle, REDWM (Cayman) L.P. that Mr. Diamond ran, according to regulatory disclosures.

Less than a year later, in early 2014, Atlas Mara inked its first acquisition: ADC. Atlas Mara paid a 15% premium over ADC's share price at the time, netting Mr. Diamond a quick gain on REDWM's investment. Mr. Diamond's investment wasn't fully disclosed to ADC shareholders or to Atlas Mara shareholders until July.

An Atlas Mara spokesman said the arrangement wasn't a conflict of interest and that the disclosure of Mr. Diamond's stake complied with rules.

Mr. Diamond didn't vote on the ADC transaction, and his shares in ADC were swapped for more shares in Atlas Mara.

"As far as best practice goes, I don't think that this was a good idea," said Charles Elson, chairman of corporate governance at the University of Delaware. "From a governance standpoint, having the investor on both sides of the transaction is problematic and obviously raises some questions about the transaction."

Atlas Mara's share price has sunk 28% from its $10 listing price in December 2013. High costs and poor economic conditions in some key countries dragged Atlas Mara to a $63 million net loss last year.

Mr. Vitalo said 2014 expenses were unusually high because of startup costs. He said he and the rest of the management team are motivated to improve the company's share price because they have significant amounts of their personal net worth in Atlas Mara shares.

Executives are being paid handsomely, raising concerns from some investors about the company's cost base on a recent earnings call and in private interviews. Mr. Vitalo, a former Barclays executive, was guaranteed a $1 million bonus for his first six months. He was given 300,000 shares, worth $2.1 million at current prices, on top of about $1.55 million in annual pay and various allowances. By contrast, Barclays paid Mr. Diamond's replacement, Antony Jenkins, GBP5.5 million ($8.2 million) last year for running a company whose market capitalization is about 100 times that of Atlas Mara.

"The question is, how long will it take [Atlas Mara] to build a bank big enough to justify that cost base?" said Frances Daniels, an analyst at Anibok Investment Research Partners Ltd., based in South Africa.

Mr. Vitalo told analysts last week that incentive payouts ensured executives' interests were "completely in line" with those of shareholders.

One reason behind Atlas Mara's bumpy ride is its ownership of BancABC, a retail bank with operations in Zimbabwe and elsewhere.

"Every other week we had someone saying they wanted to buy us," said Howard Buttery, who was chairman of BancABC until December. But he said local banks were reluctant to invest because of the bank's exposure to Zimbabwe.

Atlas Mara bought BancABC last August for about $210 million. Then the trouble started. Bad loans rose as Zimbabwe's economy further deteriorated. The bank's Tanzanian unit temporarily fell below minimum capital requirements.

In December, BancABC's top management team, including CEO Douglas Munatsi, left in part because they were unhappy with what they saw as bureaucratic processes imposed by Atlas Mara, according to a person familiar with the matter. Atlas Mara agreed to pay $17 million to buy their Atlas Mara shares received in the BancABC buyout, according to filings.

A former Standard Bank executive appointed in December 2014 by Atlas Mara to be BancABC's new CEO is still awaiting approval from local regulators. The executive has received regulatory approval to take on the role of BancABC's chief operating officer. A person close to Atlas Mara said regulators had concerns about the bank's Dubai-based management being too far removed from day-to-day operations. The Atlas Mara spokesman said it has good relations with its regulators.

Write to Margot Patrick at margot.patrick@wsj.com and Max Colchester at max.colchester@wsj.com

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