Image: Bloomberg Ecobank is not under investigation in Nigeria, the chief operating officer of South Africa’s Nedbank, which owns 21% of the Togo-based lender, said on Friday.
A newspaper report that Nedbank’s West African associate was subject to an investigation by Nigeria’s accountancy regulator spooked investors sensitive to any prospect of costly fines in the country, driving down Nedbank’s share price by more than 4%.
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.
“[Ecobank Transnational Incorporated] management have advised, based on their interaction with the Financial Reporting Council of Nigeria, there is no investigation under way into the previous reporting of ETI’s annual financial statements,” he said in an emailed statement.
The newspaper 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.