DIRECTORS SUSPENSION:CBN COMES TO STANBIC IBTC'S RESCUE ,OVERULES FRC

The Central Bank of Nigeria, CBN, has condemned in strong terms recent sanctions approved by the Financial Reporting Council of Nigeria, FRCN, against the board and management of Stanbic IBTC Holding, SIBTCH, saying the council did not follow due process.
The FRCN had, amongst others, sacked four directors of Stanbic IBTC, including its Chairman, Mr. Atedo Peterside, for alleged infractions, while also calling for the withdrawal of its financial statements for the years ended December 31, 2013 and 2014.
But in a five-page letter, dated, November, 2, 2015, and signed by the CBN Governor, Mr. Godwin Emefiele, of the apex bank also said the FRCN action was capable of eroding investors’ confidence as well as causing financial instability in the system.
After a careful review of the issues, apart from bluntly turning down FRCN’s request to take disciplinary action against StanbicIBTC, the CBN also advised the board of the embattled bank to discountenance the FRCN’s sanctions.
The CBN said: “In the light of the foregoing facts, which clearly show that FRCN did not follow due process, the bank regrets to inform you that it is unable to accede to your request to take disciplinary action against SIBTCH. Indeed, the CBN does not see any reason to advise/compel SIBTCH to obey the sanctions metted to it by the FRCN.”
The letter was addressed to the Executive Secretary/Chief Executive Officer, FRCN, and was entitled: Re: Regulatory Decision in the Matter of Financial Statements of Stanbic IBTC Holdings Plc for Years ended 31st December 2013 and 2014.
The CBN letter with reference number: GVD/GOV/CON/DGF/93/113, also read in part: “We are seriously concerned that such a drastic regulatory decision could be taken on an entity under the regulation and supervision of the Central Bank of Nigeria (CBN) without any form of consultation with the bank, especially as the CBN is responsible for promoting safe, stable and sound financial system. Yet, such a regulatory decision and the manner of the announcement is not only capable of eroding investors’ confidence but also inimical to the financial system stability.”
To underscore the implications of FRCN’s action on Nigeria’s financial system stability, the CBN further noted: “Indeed, the FRC’s action has already precipitated a fall in the value of the shares of Stanbic IBTC by about 18 per cent since the announcement of the Regulatory Decision.”