… allegations inaccurate, unfortunate -IBTC
The Financial Reporting Council of Nigeria (FRCN) has suspended the Chairman, Stanbic IBTC Holdings Plc, Mr. Atedo Peterside, its Chief Executive, Mrs. Sola David-Borha and staff of KPMG Professional Services for alleged infractions in the “2013 and 2014 statements of financial position of the company.”
According to a statement from FRCN, the suspension is expected to be in place “until the investigation as to the extent of their negligence in the concealment, accounting irregularities and poor disclosures in the said financial statements is completed in accordance with Section 62 of the Financial Reporting Council of Nigeria.”
FRCN said they were suspended for attesting to “misleading” financial statements, and would remain suspended till investigations are concluded.
The council pointed out several inconsistencies in the bank’s reporting, including IBTC’s failure or refusal to disclose what exactly millions of naira grouped under “donations” and “others” were used for.
In one instance, it said “the total fee IBTC bank paid 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 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.
The council instructed the directors of Stanbic IBTC to withdraw the Financial Statements of and restate them in accordance with the provisions of the law.
But in a swift raction, Stanbic IBTC Holdings said it has met the disclosure requirements of the international financial reporting Standards.
In a statement cp-signed by the Company Secretary, Chidi Okezie and the Chief Executive Officer, Sola David-Borha said “FRCN’s allegations are inaccurate and unfortunate.”
It also said the board membership still remain intact contrary to FRCN’s directive.
“Contrary to the media reports, the Directors of Stanbic IBTC have not been ousted. The directors, who are from Nigeria and elsewhere, are reputable individuals who uphold the best corporate governance practices and whose credibility, integrity and proven track record are impeccable” it said.
The statement also read: “our attention has been drawn to the media statements by the Financial Reporting Council of Nigeria (FRCN) in which several inaccurate and unseemly allegations were made against Stanbic IBTC Holdings PLC (“Stanbic IBTC”). Although the matter is in court, we are constrained to respond to certain aspects of the report for the benefit of our stakeholders and the general public.”
“FRCN’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. 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” it noted..
It went further to state 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. 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. In the same vein, 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” it noted.
