Nigeria's financial regulator is investigating Stanbic IBTC over alleged wrongful disclosure of franchise fees owed to its parent, South Africa's Standard Bank, the regulator said on Friday.
Stanbic had said on Thursday the regulator, Nigeria's Securities and Exchange Commission (SEC), had suspended its 20.4 billion naira ($103 million) rights issue pending the outcome of inquiries, but without saying to what these inquiries related.
The franchise fees had been payable by Stanbic to its 53 percent shareholder Standard Bank for matters such as the use of the latter's brand names. But Stanbic had been prevented from paying the fees from 2011 by a regulatory body in Nigeria.
Jim Obaze, head of the Financial Reporting Council (FRC), said on Friday the National Office for Technology Acquisition and Promotion (NOTAP), in charge of registering agreements between local firms and foreign partners, had refused to give Stanbic a permit for a franchise arrangement since 2011.
Without NOTAP's approval, Stanbic could not remit the fee, prompting Stanbic to accrue the sum on its account. But Obaze said this was under a sub-heading which was not disclosed, while the fees were still being charged on profit before tax, meaning Stanbic could be liable to pay additional corporate taxes.
Obaze said the exact amount of potentially wrongly booked fees was being investigated but they were more than the bank's planned rights issue. He said the FRC may sanction Stanbic and compel the bank to re-issue its 2014 accounts.
Stanbic said in a statement it was "a fully compliant and responsible organisation which operates in accordance with international best practices ... Stanbic IBTC has not and will never make any international remittance without due approvals from NOTAP".
Stanbic IBTC shares, which have fallen 12.4 percent so far this year, shed 4.9 percent on Friday to 22.48 naira.
Nigeria's central bank has been tightening access to dollars by businesses and foreign investors to conserve its reserves, after a plunge in global crude prices forced it to devalue the naira last November and peg the exchange rate in February.
The central bank has also introduced stricter capital requirements, which would come into effect next year, aimed at helping lenders shore up their balance sheets in the wake of lower oil prices.
The measure prompted Stanbic and other lenders to seek additional capital.
"We want to ensure that they are not misleading investors. If the money they are warehousing is brought back into the company they may not need to raise capital," Obaze told Reuters.