Stanbic IBTC refutes suspension of Directors, KPMG

By Chioma Obinagwam

Stanbic IBTC holdings Plc has refuted the recent suspension of its Directors by the Financial Reporting Council(FRC) of Nigeria over financial impropriety.

According to a statement issued by the company, it described the accusation as ‘inaccurate and unseemly.’

Recall that FRC had subjected the 2013 and 2014 Financial statements of the bank under investigation following Nigeria’s Securities and Exchange Commission’s(SEC) notification to the investing public, particularly, the shareholders of Stanbic IBTC to beware that the proposed N20.4 billion rights issue had been put on hold in view of letters received from the National Office for Technology Acquisition and Promotion (NOTAP), the Central Bank of Nigeria (CBN) as well as the Financial Reporting Council (FRC).

These regulatory authorities reacted to the petitions written to them by shareholders of the bank to some unapproved transactions allegedly conducted by the bank with its foreign technical partners.

In the petition, members of Trusted Shareholders Association had alleged that tens of billions of naira were yet to be returned into the Profit or Loss account of the bank.

Hence, FRC undertook to investigate the issue after confirming the validity of the petition.

The bank argued that the purpose for denouncing the suspension pronounced by FRC on the chairman of Stanbic IBTC bank, Peterside At edo; Managing Director, Sola David-Borha;and Kong’s Arthur Oginga and Daru Owei over accounting irregularities in the bank’s 2013 and 2014 financial statements was procedurally defective.

“FRC’s allegations are inaccurate and unfortunate, and the manner in which it has chosen to make them is procedurally defective. Whilst FRCN takes refuge in Regulation 21 of the Directorate of Inspection and Monitoring Guidelines Regulations 2014 for the wide publicity that it has given to its regulatory decision, Regulation 21 only applies where the Panel and the entity agree that accounts are to be rectified by way of revision or restatement, that is not the case here, because Stanbic IBTC does not agree that its accounts are defective or require rectification,” the bank argued.

“Moreover, Regulation 27 makes clear that where a reporting entity does not accept FRCN’s position, FRCN shall institute a legal action against the entity. FRCN has ignored this laid down process in preference for self-help and media publicity,” the bank said.

Stanbic IBTC, however, insisted in its statement that the matters that FRCN alleges to be wrong are not wrong in any material respect and many are in any event not matters of financial reporting at all, but matters of business decision and judgment for Stanbic IBTC and its board of directors.

It stated:“For example, the decision whether to enter into a sale and lease back, whether in relation to intellectual property or any other asset, is a business decision and entirely a matter for the board of directors of Stanbic IBTC and certainly not a matter for FRCN.”

The bank also indicated that NOTAP’s refusal to register a franchise agreement does not render the agreement null or void, or indeed relieve Stanbic IBTC of its liability. It merely means that any foreign currency payment due to the foreign counterparty under the unregistered agreement cannot be remitted.

“Stanbic IBTC has not and will not make any remittance which is subject to NOTAP approval without obtaining such approval.
The bank pointed out that it is the only Nigerian bank that is AAA rated by Fitch,” the bank disclosed.