By Kelechi Mgboji
Assistant Business Editor
Standard Bank Group, the South African lender that operates Stanbic IBTC Holdings in Nigeria, says the Financial Reporting Council of Nigeria (FRC) exceeded its powers when it ruled the bank’s West African unit had made misstatements in its financial accounts and recommended a fine.
Lawyers have advised the bank that the FRC’s notification and “an associated purported” fine against Stanbic of N 1 billion ($5 million) do not comply with proper processes, the bank said.
Bloomberg reported that the Nigerian unit’s auditor, KPMG, has confirmed it stand by its opinion on the 2013 and 2014 financial statements.
The FRC on October 26 suspended the registration to sign off on financial statements of four former and current Stanbic officials, including Chief Executive Officer, Sola David-Borha, and Chairman, Atedo Peterside.
The dispute is on how to account for cross-border payments, according to Standard Bank, which said Stanbic has 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 argued.
The Nigerian unit insisted that its directors “have not been ousted.”
Stanbic maintains that there were no material misstatements in its financial accounts for 2013 and 2014, according to Standard Bank.
The potential financial effect of the FRC’s action is not material, Standard Bank added.
Its shares advanced 0.1 per cent to 143.15 rand in Johannesburg by 4.29pm. Stanbic dropped 4.8 per cent in Lagos.
Regulatory battles
Stanbic Bank, Africa’s largest by assets, is not the only foreign company tussling with Nigerian authorities.
The Nigerian Communications Commission (NCC) has imposed a $5.2 billion fine on Johannesburg-based MTN Group for failing to disconnect customers with unregistered SIM cards.
Africa’s biggest mobile carrier has been told to pay the penalty by tomorrow, Monday, November 16.
Elsewhere in the past two years, Standard Bank has been fined by regulators in the United Kingdom and South Africa for failures in anti-money-laundering controls.
It may be among banks facing investigation in the United States for alleged precious metal price manipulation, people with knowledge of the matter said in February.
Standard Bank has been named in a U.S. class action suit that claims the lender, and others, allegedly manipulated platinum and palladium prices.
It was also named in the South African Competition Commission’s rand-rigging probe, which is yet to be concluded.