Stanbic IBTC under fire for irregularities

Posted On Sunday, 01 November 2015 10:26 Published by
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Stanbic IBTC's quarterly financial statements due out this week will have to be signed off by other executives after the Nigerian Financial Reporting Council barred its chairman and CEO from doing so.

Mrs_Sola_David_Borha

Standard Bank subsidiary Stanbic IBTC’s quarterly financial statements due out this week will have to be signed off by other executives after the Nigerian Financial Reporting Council (FRC) barred its chairman and CEO from doing so on Monday.

The regulator ordered Stanbic, in which Standard Bank holds a 53.25% stake, to withdraw and restate two sets of financial statements after a review uncovered a raft of irregularities.

The review was prompted in part by minority shareholders.

Two of these shareholders — Foco International and Bhagwan Mahtani — have brought a court case against Stanbic, seeking to restrain it from paying franchise fees to Standard Bank, according to Standard Bank spokesman Ross Linstrom.

The regulator also withdrew the FRC registrations of Stanbic chairman Atedo Peterside and CEO Sola David Borha, along with those of chief financial officer Arthur Oginga and audit committee chairman Daru Owei.

Stanbic’s external audit partner also saw his registration temporarily revoked.

“The company has other persons that have FRC registrations to sign financial statements — such as the quarterly financials that are scheduled to be published this week — and so we do not anticipate delays,” said Mr Linstrom.

The council’s investigation found that Stanbic’s 2013 and 2014 annual financial statements required “material adjustments”. These include the sale of software to parent Standard Bank for nearly R151.5m despite the National Office for Technology Acquisition and Promotion’s (Notap’s) refusal to authorise it, preferring that Stanbic licence the software in Nigeria.

The council alleges Stanbic failed to record the sale, or any fee income from the software, in its books.

But Ms David-Borha said yesterday Notap’s decision did not nullify the sale agreement.

“It merely means that any foreign currency payment due to the foreign counterparty under the unregistered agreement cannot be remitted,” she said.

Stanbic also allegedly failed to disclose 62-million naira (about R4.2m) in “other services” to auditors over the four years to 2014, raising questions about auditor independence for the regulator.

source Business Day

Last modified on Sunday, 01 November 2015 12:07

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