The attention of the Financial Reporting Council (FRC) has been drawn to an advertorial, by Stanbic IBTC Holdings Plc (Stanbic IBTC), on page 2 of Businessday newspaper 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 International Financial Reporting Standards (IFRS), it is the duty of the FRC to monitor compliance with 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 judgement, 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 (NOTAP) 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.
From a financial reporting perspective, Stanbic IBTC 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 on the sale.
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 certificate 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 noncompliance (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 the integrity of any financial statements issued in Nigeria.
Note that as FRC, we remain the conscience of regulatory assurance in Nigeria. We join all Nigerians to welcome investors (both foreign and local) to our country and will like everyone to know that as
Nigerians, we ensure that what belongs to others, we will not take but, what belongs to Nigeria, we will never surrender.
MANAGEMENT FRC … the conscience of regulatory assurance