The Nigerian financial reporting regulator
asked Standard Bank subsidiary Stanbic IBTC this week to withdraw two
sets of financial statements.
It also suspended the registrations of two directors of the bank who it blamed for the misleading financial statements.
Standard Bank owns 53.25% of Stanbic. The Financial Reporting Council of Nigeria conducted a review of Stanbic’s full-year 2013 and 2014 financial statements. After complaints from minority shareholders, the regulator also widened its net to the 2011 and 2012 financial statements.
This found a litany of breaches. Among them was the fact that Stanbic did not disclose the sale of its software to Standard Bank, or record annual fee income from it.
It also paid fees for "other services" to auditors without disclosing what they were, and lumped current and deferred tax together in contravention of international financial reporting standards.
Stanbic also concealed information, such as franchise fees paid to Standard Bank recorded under "professional fees"; donations, penalties and fines, and directors fees recorded under "other expenses"; and other fees paid to Standard Bank under information technology expenses.
The financial reporting council has directed Stanbic to withdraw and restate the 2013 and 2014 financial statements. It has also withdrawn the registrations of Stanbic chairman Atedo Peterside and CEO Sola David-Borha.
Finance chief Arthur Oginga and Daru Owei, another manager within the bank, also had their registrations suspended.
"The council shall require evidence of a second partner review and audit approach that the external auditors of Stanbic IBTC — KPMG Professional Services — adopted on quality control on the said financial statements that could not reveal these infractions," the regulator said.
It also suspended the registration of the KPMG partner responsible for the audit until it concluded an investigation into "the extent of the negligence" of the professional services firm.
In a statement, Ms David-Borha characterised the council’s allegations as "inaccurate and unseemly", adding that Stanbic had taken the issue to court.
She denied all allegations of wrongdoing, taking issue with the manner in which the council had publicised the regulatory decision and saying that this was done only where the council and the regulated entity agreed that the accounts needed to be rectified.
"That is not the case here, because Stanbic IBTC does not agree that its accounts are defective or require rectification," she said. "Moreover, regulation 27 makes clear that where a reporting entity does not accept (the council’s) position, (the council) ‘shall institute a legal action against the entity’. (The council) has ignored this laid-down process in preference for self-help and media publicity."
It also suspended the registrations of two directors of the bank who it blamed for the misleading financial statements.
Standard Bank owns 53.25% of Stanbic. The Financial Reporting Council of Nigeria conducted a review of Stanbic’s full-year 2013 and 2014 financial statements. After complaints from minority shareholders, the regulator also widened its net to the 2011 and 2012 financial statements.
This found a litany of breaches. Among them was the fact that Stanbic did not disclose the sale of its software to Standard Bank, or record annual fee income from it.
It also paid fees for "other services" to auditors without disclosing what they were, and lumped current and deferred tax together in contravention of international financial reporting standards.
Stanbic also concealed information, such as franchise fees paid to Standard Bank recorded under "professional fees"; donations, penalties and fines, and directors fees recorded under "other expenses"; and other fees paid to Standard Bank under information technology expenses.
The financial reporting council has directed Stanbic to withdraw and restate the 2013 and 2014 financial statements. It has also withdrawn the registrations of Stanbic chairman Atedo Peterside and CEO Sola David-Borha.
Finance chief Arthur Oginga and Daru Owei, another manager within the bank, also had their registrations suspended.
"The council shall require evidence of a second partner review and audit approach that the external auditors of Stanbic IBTC — KPMG Professional Services — adopted on quality control on the said financial statements that could not reveal these infractions," the regulator said.
It also suspended the registration of the KPMG partner responsible for the audit until it concluded an investigation into "the extent of the negligence" of the professional services firm.
In a statement, Ms David-Borha characterised the council’s allegations as "inaccurate and unseemly", adding that Stanbic had taken the issue to court.
She denied all allegations of wrongdoing, taking issue with the manner in which the council had publicised the regulatory decision and saying that this was done only where the council and the regulated entity agreed that the accounts needed to be rectified.
"That is not the case here, because Stanbic IBTC does not agree that its accounts are defective or require rectification," she said. "Moreover, regulation 27 makes clear that where a reporting entity does not accept (the council’s) position, (the council) ‘shall institute a legal action against the entity’. (The council) has ignored this laid-down process in preference for self-help and media publicity."
No comments:
Post a Comment