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FRC exceeded its powers – Standard Bank

By on November 1, 2015

Standard Bank Group Limited, the South African lender that operates Stanbic IBTC Holdings Plc, has said the Financial Reporting Council of Nigeria (FRC) exceeded its powers when it ruled that the bank’s West African unit had made material misstatements in its financial accounts and recommended a fine.

Lawyers had advised the bank that the FRC’s notification and “an associated purported” fine against Stanbic of N1 billion don’t comply with proper processes, Bloomberg quoted the Johannesburg-based bank to have said in a statement Friday.

The Nigerian unit’s auditor, KPMG, has confirmed it stands by its opinion on the 2013 and 2014 financial statements, the bank said.

The FRC on Monday announced the suspension of four board members of Stanbic IBTC, including Chief Executive Officer Sola David-Borha and Chairman Atedo Peterside.

The issue under dispute is how to account for cross-border payments, according to Standard Bank, which said Stanbic had been treating payments to units of the lender in other African countries as liabilities.

The payments “should continue to be reflected as liabilities, given the increasing difficulties in obtaining regulatory approval for cross-border payments,” Standard Bank said on Friday.

The Nigerian unit said October 27 that its directors “have not been ousted.”

Stanbic maintains that there were no material misstatements in its financial accounts for 2013 and 2014, Standard Bank said. The potential financial effect of the Nigerian regulator’s action isn’t material, according to Standard Bank.

Its shares advanced 0.1 per cent to 143.15 rand in Johannesburg. But Stanbic IBTC shares dropped 4.8 per cent in Lagos.

The lender, Africa’s largest by assets, isn’t the only foreign company tussling with Nigerian authorities.

The country’s telecommunication’s regulator has imposed a $5.2 billion fine on Johannesburg-based MTN Group Limited for failing to disconnect customers with unregistered sim cards. Africa’s biggest mobile carrier has been told to pay the penalty by November 16.

In the past two years, Standard Bank had been fined by regulators in the U.K. and South Africa for failures in anti-money-laundering controls.

It may be among banks facing a US investigation for precious metal price manipulation, people with knowledge of the matter said in February.

It has been named in a U.S. class action suit that claims the lender, and others, manipulated platinum and palladium prices. Standard Bank was also named in the South African Competition Commission’s rand-rigging probe, which has yet to be concluded.

 

[ThisDay]