Stanbic IBTC Holdings Plc is exposed to various actual and potential claims, lawsuits and other proceedings that relate to alleged errors, omissions, breaches.
The Group has 349 litigation cases in its litigation portfolio as at 31 December 2020. Stanbic IBTC stated this in its 2020 annual report released recently. The “aggregate value of monetary claims against the Stanbic IBTC Group was N107,880,214,701.86; USD$472,039.15 & GB £74,284.64.”
The group said it has an adequate insurance cover and/or provisions in place to meet such claims.
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According to Stanbic IBTC, the above total number of litigations include a case involving Stanbic IBTC Bank PLC (the Bank) and a customer.
Stanbic stated that the claimant in a legal proceeding asserted that the Bank and CRC Credit Bureau acted maliciously by filing an erroneous report on the claimant’s indebtedness to the Bank to a credit bureau.
On 31 July 2017, the Lagos State High Court awarded general “damages of N50 billion jointly and severally against Stanbic IBTC Bank PLC (the Bank and CRC Credit Bureau Plc) in favour of the claimant.”
On 1 August 2017, the Bank filed a Notice of Appeal and a Motion for Stay of execution of the judgement and the Appeal is still pending at the Court of Appeal, Lagos Division.
The hearing which was scheduled for 19 January 2021 was adjourned. A new date is yet to fixed according to Stanbic.
“On 18 January 2021, the Court of Appeal Registry issued an e-mail confirming that the hearing earlier scheduled for 19 January 2021 would no longer hold and that the hearing has been adjourned to a date to be communicated to the counsel representing the parties.”
Also, the Bank is involved in litigation against the Asset Management Corporation of Nigeria (AMCON). In December 2012, the Bank entered into an agreement with AMCON to purchase the non-performing loan of a client, which the Bank had classified as “doubtful”.
According to Stanbic IBTC, AMCON confirmed its willingness to purchase the proposed Eligible Assets at a total consideration of about N10 billion, and the transaction was concluded in December 2012 with a precondition by AMCON that it can reprice the assets within 12 months, “in line with AMCON guidelines after due diligence on information the Bank had supplied to AMCON.”
However, in 2017, AMCON “informed the Bank of its intention to reprice the loan and claw back the sum of N5.7bn, being what was alleged to be excess overpaid consideration, as a result of what was felt was an overvaluation,” Stanbic stated.
Although the repricing is outside the 12-month claw-back period provided in AMCON’s guidelines, AMCON proceeded to apply to the Central Bank of Nigeria (CBN) to debit the Bank’s account with the sum requested to be clawed back, plus possible accrued interest.
In August 2019, the Bank instituted a legal action against AMCON after it received a letter from the CBN regarding AMCON’s request.
According to Stanbic, “The CBN warehoused the amount of N6.704 billion, having debited the Bank’s current account with it on the 10th of September 2019, in an escrow account domiciled with the Bank to insulate the funds until the determination of the Suit filed by the Bank.”
The hearing on the case which was scheduled for 26 May 2020 could not proceed due to the impacts of the Covid-19 pandemic. A new date for the hearing has not been fixed.
Stanbic IBTC Holdings Plc maintains that the claims against the Group have a “low likelihood of success” in general and that the final resolution of any ongoing proceedings will not have a significant “adverse effect on the group,” as the Group makes adequate provisions for the claims against it with “more than average chance” of succeeding.
As at 31 December 2020, Stanbic IBTC Holdings Plc legal provisions amounted to N5.122 billion down from N5.18 billion in 2019.
About Stanbic IBTC Holdings Plc
The company was incorporated in Nigeria under the Companies & Allied Matters Act (CAMA) as a public limited liability company on 14 March 2012. The company’s shares were listed on 23 November 2012 on the floor of The Nigerian Stock Exchange.
The principal activity of the company is to carry on business as a financial holding company, to invest and hold controlling shares, as well as manage equity in its subsidiary companies.
The company has nine direct subsidiaries, namely: Stanbic IBTC Bank PLC, Stanbic IBTC Pension Managers Limited, Stanbic IBTC Asset Management Limited, Stanbic IBTC Capital Limited, Stanbic IBTC Insurance Limited, Stanbic IBTC Stockbrokers Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC Insurance Brokers Limited and Stanbic IBTC Trustees Limited and two indirect subsidiaries, namely: Stanbic IBTC Bureau De Change Limited, Stanbic IBTC Nominees Limited.
The group discontinued the operation of Stanbic IBTC Bureau De Change Limited effective 1 January 2021. The discontinuation of operation of the BDC business was primary driven by changes in regulation, which now afford customers the opportunity of purchasing foreign exchange (PTA and BTA) directly from Stanbic IBTC Bank at any of its branches nationwide.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.