Ecobank Says No Regulatory Investigation Into Its Account

The Pan-African banking group, Ecobank Transnational Inc. (ETI) is not under any investigation by the Financial Reporting Council of Nigeria (FRCN), one of the lender's key shareholder has disclosed.

Mfundo Nkuhlu, Chief Operating Officer (COO) of South Africa’s Nedbank, which owns 21 percent of the Togo-based lender, said on Friday "no investigation underway into the previous reporting of ETI’s annual financial statements."

A newspaper report had said ETI was a subject of an investigation by Nigeria’s accountancy regulator spooked investors sensitive to any prospect of costly fines in the country.

“[Ecobank Transnational Incorporated] management have advised, based on their interaction with the Financial Reporting Council of Nigeria, there is no investigation underway into the previous reporting of ETI’s annual financial statements,” he said in a statement.

At the time of the report last month, both Ecobank and Nedbank said they had not been notified of any inquiry. On Friday Nedbank COO Mfundo Nkuhlu said Ecobank’s discussions with the regulator since then suggested there is no investigation.
The report said the investigation related to allegations that Ecobank had overstated its balance sheet and income statement by applying incorrect exchange rates.
Nedbank’s relationship with Ecobank is only now starting to pay off after a slide in commodity prices and unfavourable currency swings in Nigeria drove Ecobank to a $131.3 million pretax loss in 2016.
The market is particularly sensitive to news of Nigerian corporate investigations after the MTN saga, in which the South African telecoms giant had been threatened with a multibillion-dollar fine by Nigerian regulators.
Nigeria’s Financial Reporting Council could not be reached by telephone on Friday. A representative previously told Reuters that the council did not discuss its investigations.