27th October, 2015
Stanbic IBTC said its financial statements complied with international standards and did not require rectification, responding to allegations of misleading disclosures by Nigeria’s financial regulator.
Nigeria’s Financial Reporting Council, FRC on Monday asked the Central Bank of Nigeria to take regulatory action against Atedo Peterside, the Chairman of Stanbic IBTC Holdings Plc, Sola Borha, the managing director of the bank as well as Arthur Oginga and Daru Owei, employees of KPMG Professional Services, the external auditors of the bank over what it described as misrepresentation of the financial position of the financial institution for years ended 31st December 2013 and 2014.
On its part, the FRC said it has suspended the four individuals from vouching for the integrity of any financial statements issued in Nigeria until the investigation as to the extent of their negligence in the concealment, accounting irregularities and poor disclosures in the financial statements is completed in accordance with Section 62 of the Financial Reporting Council of Nigeria Act No. 6, 2011.
The recommendations were the outcome of FRC probe of the financial statements of Stanbic IBTC Holdings Plc (Stanbic IBTC) and major subsidiaries of the holding company for the years ended 31st December 2013 and 2014.
FRC said irregularities in the reports were brought to its attention by some minority shareholders of Stanbic IBTC relating to the Financial Statements of the bank for years ended 31st December 2011, 2012, 2013 and 2014.
The Council said its investigations revealed many inconsistencies in the financial statements of the bank which it also accused on not disclosing some of the items its expended money budgeted under subheadings like donations for.
Also, the Council noted that the fees paid by IBTC bank to KPMG Professional Services for non-audit services was found to be inconsistent with what was disclosed in the financial statements for the years under review, the council said.
“The Council observed that Stanbic IBTC regularly flouts CBN regulations. In 2014 for instance, a total penalty of N28, 000,000 was imposed on the group. Stanbic IBTC seems to have a penchant for poor disclosures which further corroborates the findings in this report,” the statement said.
In addition, FRC also accused Stanbic IBTC of selling the software it developed in Nigeria to its South African partner with disclosing the cost of the development of the software in its accounts.
The Council asked the Bank to withdraw the financial statements while asking the CBN, the Economic and Financial Crimes Commission, EFCC as well as the Federal Inland Revenue Service to also take different actions that will help whip the financial institution into line.
“The Central Bank of Nigeria is requested to assist in this effort by taking regulatory disciplinary actions against those whom the CBN expects to guarantee the integrity of the aforementioned financial statements in order to safeguard the interest of stakeholders of Stanbic IBTC. We are convinced that once the monies are properly accounted for and used to shore up their Tier 1 capital, the institution shall become stronger,” said the Council.
“The Federal Inland Revenue Service is requested to ensure that the related taxes are paid and the government is not unduly short changed,” it added.
“The Economic and Financial Crimes Commission is requested to assist in this effort by questioning those involved in the concealment and sale of the banking application software that was developed in Nigeria which, other than the financial implication, has also robbed Nigerians of national pride.”