Sola David Borha Led Stanbic IBTC Under Investigation Over Financial Statements

…accused of stashing Nbillions from account book

Stanbic IBTC, the financial institution led by Managing Director Sola David – Borha is under investigation.

And carrying out this check is the Financial Reporting Council of Nigeria.

According to disclosures made by the head of the investigating authority, Jim Obazee the development is fallout of petition written by shareholders of the bank drawing focuses to some unapproved transactions entered into by Stanbic IBTC Bank.

According to the revelation members of the Trusted Shareholders Association of Stanbic IBTC alleged that tens of billions of naira were yet to be returned into the profit and loss account of the bank.

The contents of the petition alleged “Stanbic IBTC Holdings Plc has applied to the Securities and Exchange Commission for approval of its proposed Rights issue, without refunding tens of billions of Naira deducted from gross revenue earned.

“This has been illegally stashed in an account since 2011 for the credit of its controlling shareholder, Standard Bank of South Africa as payment for franchise and management fees without prior approval by
NOTAP which is mandatory.

“As tens of billions of Naira are yet to be returned to the profit and loss account, the present balance sheet as currently stated, is not a true and fair representation.”

Obazee further revealed that the council decided to investigate the allegations after meetings with the petitioners and Stanbic IBTC Bank’s representatives confirmed the accusers have a valid case.

The FRCN head who made the damning disclosure against Stanbic IBTC Bank after meetings with officials from from National Office for Technology Acquisition and Promotion stated.

“We are here to also find out if NOTAOP approved any of these payments, such as historical fees, among others.

“We are looking at transactions from 2011 to 2014.

“If they didn’t get approval for 2011 fees, didn’t get for 2012, 2013, 2014.

“So why are they keeping these monies? “It is illegal.”

He further revealed that the council would visit the Securities and Exchange Commission and the Central Bank of Nigeria as part of its investigation on the matter. He said that after the visitations, Stanbic IBTC Bank would again be invited for questioning.

Obazee said apart from the protection of the rights of shareholders, the agency was interested in the case because Federal Government might have lost huge revenues as taxes.

He said this was because the bank was making the deductions from profit before tax without including the monies that the shareholders were grieving about.

He said: “Government is involved in this matter because if you are taking out some money out of profit before tax and you are warehousing it for a number of years, you are actually defrauding the Federal
Government.

“Federal Government is supposed to have taxes from the profit. “But if you are keeping money from profits before tax, it means thatthe money was taken off and government was denied its share.
“So we want all these straightened out as well. We want to know if it wasn’t reported correctly in their financial statement.

“Otherwise they will be subjected to the FRCN’s disciplinary procedure. We can even ask them to withdraw the financial statement and reissue it.”

The Director-General of NOTAP, Dan-Azumi Ibrahim, said that no approval was granted by the agency to the bank for the transaction. Ibrahim said since the agency didn’t give the approval, it would be
wrong for the bank to keep money or make any payment to its foreign partners as management fees.

He said: “NOTAP is saddled with the responsibility of regulating the inflow of foreign technology into the country and at the same time develops local technology.

“So NOTAP was expected to register Stanbic IBTC with its foreign partner, Standard Bank of South Africa and we have a guide line on how we do our registration.

“So Stanbic IBTC applied for a franchising agreement, management fee agreement year after year and we did not render them approval because management service agreement is not required in Nigeria.”
Ibrahim reiterated NOTAP’s readiness to collaborate with FRCN to resolve the Stanbic IBTC issue

The Financial Reporting Council of Nigeria C.EO. made the disclosures in an address to newsmen on Tuesday September 01 2015

additional report eagleonline