FRC suspends Stanbic IBTC directors, KPMG

The Financial Reporting Council (FRC) has requested that the Central Bank Nigeria (CBN) and the Economic and Financial Crime Commission (EFCC) investigate Stanbic IBTC and KPMG Professional Services for “financial misstatements”.

In a report released by the FRC on Monday, the council suspended the registration of four directors of Stanbic IBTC and that of its audit engagement partner, KPMG Professional Services, until KPMG’s innocence is ascertained.

The four directors suspended are Atedo Peterside, Sola David-Borha (pictured), Arthur Oginga and Dare Owei.

The bank is alleged to have misstated its financial reports for the 2013-2014 fiscal year and ceded its banking application rights to Standard Bank of South Africa against the directives of National Office for Technology Acquisition and Promotion (NOTAP).

According to FRC, “the schedules supplied to the council by Stanbic IBTC revealed that the total fee paid to KPMG Professional Services for non-audit services was inconsistent with what was disclosed in the financial statements for the years under review”.

The bank was also alleged to have flouted a number of financial regulation, including a regular flouting of CBN regulations.

“In 2014 for instance, a total penalty of N28,000,000 was imposed on the group. Among the contraventions was improper disclosure of public sector deposits in 2014,” FRC said in its report.

“Stanbic IBTC seems to have a penchant for poor disclosures which further corroborates the findings in this report.”

In view of all the allegations established by the FRC, the council decided that the CBN assist by taking regulatory disciplinary actions against those expected to guarantee the integrity of the aforementioned financial statements in order to safeguard the interest of stakeholders of Stanbic IBTC.

“We are convinced that once the monies are properly accounted for and used to shore up their Tier 1 capital, the institution shall become stronger,” the panel’s resolution read in part.

“The Federal Inland Revenue Service is requested to ensure that the related taxes are paid and the government is not unduly short changed.

“The EFCC is requested to assist in this effort by questioning those involved in the concealment and sale of the banking application software that was developed in Nigeria which, other than the financial implication, has also robbed Nigerians of national pride.”