The Financial Reporting Council of Nigeria has asked the management of Stanbic IBTC Holdings Plc to tender a written apology to it for publishing an advertorial against its recent regulatory decision on the institution.

The regulatory agency also denied knowledge of any court process on the outcome of its investigation into the bank.

The FRC had on Monday released a report on Stanbic IBTC in which the bank was alleged to have misreported some aspects of its 2013 and 2014 financial statements.

The bank has since said the allegations are inaccurate.

But the FRC in an advertorial published today (Thursday) asked Stanbic IBTC to withdraw its earlier publication against the regulatory decision.

The advertorial read, “The attention of the Financial Reporting Council has been drawn to an advertorial by Stanbic IBTC Holdings Plc of Tuesday, October 27, 2015. The council wishes to advise the management of Stanbic IBTC to withdraw the advertorial and immediately tender a written apology to the council for the following reasons:

“First, the FRC is not aware of any court process served on the council with regard to the regulatory decision issued on Stanbic IBTC on Monday, October 26, 2015.

“Second, while it is the duty of Stanbic IBTC to prepare its financial statements in accordance with the relevant provisions of the International Financial Reporting Standards, it is the duty of the FRC to monitor compliance with the IFRS and also ensure accuracy and reliability of financial reports and corporate disclosures, pursuant to the various laws and regulations currently in existence in Nigeria (see Sections 8 (i) (h), 28 (1) (a) and 11 (d) of the FRC Act). The council, therefore, stands by its regulatory decision as issued.

“Third, while the FRC agrees that Stanbic IBTC can make business decision and judgment, we insist that such must be in compliance with all extant laws and regulations applicable in Nigeria and must be properly accounted for and disclosed in the financial statements of Stanbic IBTC.

“To make an application to National Office for Technology Acquisition and Promotion on Sale, Purchase and Assignment agreement on banking application software developed by Stanbic IBTC Nigeria for Zar 151,586,277 on 3rd July, 2013 after Standard Bank of South Africa Limited has been given the source code of the software on 6th July, 2012 (without non-disclosure agreement) and not accounting for it at all in its financial statements for relevant years is not acceptable.”

The FRC further stated that from a financial reporting perspective, Stanbic IBTC had failed to disclose the research and development costs relating to the said banking application software, the carrying amount of the intangible asset, the sales proceeds upon the eventual sale of the software and the profit or loss realised from the sale.

The council added, “We read a letter from NOTAP to Stanbic IBTC, at the meeting of 16 October 2015, in which NOTAP stated that if NOTAP does not issue a certification of registration, an approval is invalid. It is not a case of ‘don’t remit’ but a case of ‘don’t accrue’, which is a financial reporting issue. This is just one of the non-compliance (accounting and disclosure) issues in the regulatory decision that Stanbic IBTC is to address in the restatement of its financial statements for years ended 31 December 2013 and 2014.

“Accordingly, Stanbic IBTC is advised to obey the regulatory decision of the FRC and reverse the wrongly accrued amounts to retained earnings. Finally, we like to restate here that the FRC registration of the named directors of Stanbic IBTC remains suspended. Accordingly, they are not allowed to vouch for the integrity of any financial statements issued in Nigeria. Note that as the FRC, we remain the conscience of regulatory assurance in Nigeria.”

Source: Punch