Stanbic IBTC ‘accepts’ CBN’s N1.9 billion fine

STanbic

In response to the regulatory fines imposed on the bank by the Central Bank of Nigeria, Stanbic IBTC, a mid-sized lender in Nigeria might not contest the fines.

It would be recalled that the CBN had fined Stanbic a total sum of N1.885 billion on the allegations of its involvement in illegal repatriation of funds for MTN Nigeria, the country’s largest mobile carrier.

A statement issued by the bank to the Nigerian Stock Exchange says:

“Stanbic IBTC Holdings PLC (a member of Standard Bank Group) has been informed by its banking subsidiary – Stanbic IBTC Bank PLC (the “Bank”) that penalties have been imposed on the Bank by the Central Bank of Nigeria (CBN) pursuant to a review of transactions relating to the remittance of foreign exchange on the basis of certain “irregular” capital importation certificates issued to MTN Nigeria Communications Limited.

The Bank is holding further engagements with the CBN, in relation to the issues it has raised. Please be assured that the above does not impact on your ability to continue to conduct your various business and corporate transactions with Stanbic IBTC Holdings or any of its subsidiaries, including the Bank.”

In its query letter to Stanbic IBTC, the CBN said:

i, The shareholders of MTN Nigeria Communications Limited invested the sum of $402,590,261.03 in the company from 2001 to 2006;

ii. The investment was carried out through the inflow of foreign currency cash transfers and equipment importation, which was evidenced by the CCIs issued by Standard Chartered Bank, Diamond Bank and Citibank, out of which eight of the CCIs totalling $377,216,508.30 were transferred to your bank by Standard Chartered Bank. Consequently, your bank repatriated the sum of $929,051,331.83 as proceeds of divestment from the CCIs valued at $42,704,408.61.

iii. On account of the illegal conversion of the shareholders loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by your bank and the other banks on behalf of MTN Nigeria Communications Limited between 2007 and 2015.”

MTN Group, the parent company of MTN Nigeria has not commented on the matter but it is expected to make official statements on the matter to the Johannesburg Stock Exchange later today.

Stanbic IBTC is a wholly-owned subsidiary of South Africa’s Standard Bank.