Monday, October 26, 2015 8:00 pm
Nigeria’s financial regulator has ordered Stanbic IBTC, to restate its 2013 and 2014 accounts over “misleading” disclosures relating to expenses and franchise fees owed to its parent firm South Africa’s Standard Bank, the watchdog said.
The Financial Reporting Council said on Monday Stanbic IBTC had an “other operating expenses” category in its accounts for financial years 2011 to 2014 in which expense items were not properly disclosed.
But Stanbic IBTC has fired back that its accounting followed global standards and did not require rectification.
In a statement signed by company’s secretary, Chidi Okezie and CEO, Sola David-Borha, the bank was surprised that FRC has chosen to make a media feast of a matter that is already in court.
“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.
“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.”
Please click here for the full response of the bank: Stanbic IBTC Holdings meets disclosure requirements of the International Financial Reporting Standards