The board of directors of FCMB Group Plc has unanimously voted to replace Messrs KPMG Professional Services with Messrs Deloitte & Touche as its new auditors.
What we know: This is part of the decisions that were reached when the company’s board of directors met in Lagos last week, to deliberate on a number of important company issues.
In a public disclosure that was sent to the Nigerian Stock Exchange earlier today, FCMB Group Plc informed the general public that the decision is still subject to the approval by its stakeholders. The approval is expected to be given during the company’s next Annual General Meeting.
Reason for the move: According to an explanatory note that was later sent by FCMB Group, as seen by Nairametrics, KPMG’s ten-year tenure expired, hence the replacement. Part of the statement said:
“By virtue of the provision of section 5.2.12 of the CBN Code of Corporate Governance for Banks and Discount Houses, the tenure of the auditors in a given bank shall be for a maximum period of ten (10) cumulative years, after which the audit firm shall not be reappointed in the bank until after a period of another ten (10) consecutive years.
“Following the expiration of the 10-year tenure of Messrs KPMG Professional Services with First City Monument Bank Limited (the bank), the Board of the bank approved the appointment of Messrs Deloitte & Touche as its external auditors.
“With the bank being the largest subsidiary in the FCMB Group, to ensure timely conclusion of the Group’s audit, the Board of Directors of FCMB Group Plc has always adopted the strategy of appointing the same Audit firm to audit both the bank and the Group. This is to enhance easy coordination of the Group’s audit process and support quick review of the consolidated financial statements to meet regulatory guidelines on audit.”
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Other decisions by FCMB board: The statement by FCMB Group went further to disclose that the board of directors deliberated on and approved the company’s audited financial statement for the period ended December 2019.
After obtaining approval from the Central Bank of Nigeria, details of the financial statement, the dividend payout to shareholders, and other related corporate actions will be announced to the general public through a notice to the Nigerian Stock Exchange.
Meanwhile, the company also considered and approved the appointment of a new Non-Executive Director. The name of the new Non-Executive Director is yet to be disclosed because the appointment is still subject to approval.
Based on its unaudited financial statement for the 2019 financial period as seen by Nairametrics, the bank is expected to report an increase in profit after tax.
FCMB Group’s stock opened Monday’s trading session on the Nigerian Stock Exchange with a share price of N1.80. It is currently trading at N1.67 according to Bloomberg.
NB: This article has been updated with additional explanation from FCMB Group, which provides the legal reason behind KPMG’s replacement.