TIGHTER CONTROLS
Standard Bank fights back against losses to fraud
STANDARD Bank Group was bolstering internal controls, it said, after shareholders criticised managers and executives at Africa’s biggest bank by assets for a series of fines and losses tied to fraud.
The company planned to add to its 400 compliance officers after hiring about 300 employees to the division over the past year, co-chief executive Sim Tshabalala and director Richard Dunne told shareholders at the annual general meeting in Johannesburg yesterday.
The bank had also trained staff on how to spot “red flags” related to bribery and employed an external expert, general counsel Ian Sinton said.
Standard Bank has been fined more than $50 million (R783m) over the past two years, which includes penalties in the UK and South Africa for not having adequate anti-money laundering policies in place.
Last year, the lender agreed to a $36.9m settlement after Tanzanian employees bribed government officials. Last week, the company said it lost as much as R300m to organised fraud in Japan.
Executives should be punished and their bonuses withheld if the bank was failing to adhere to regulatory issues, said Theo Botha, a shareholder activist and founder of Proxy View, which advises investors on how they can vote on company resolutions.
“There is a lack of disclosure and the chief executives should accept responsibility,” he said.
Governance design
While guaranteed pay for Standard Bank’s joint chief executives Tshabalala and Ben Kruger was little changed last year, their combined compensation including incentives and excluding long-term sharebased awards jumped 43 percent. Shareholders holding 15.5 percent of Standard Bank’s stock voted against the remuneration policy yesterday.
“The governance process accounts for all breaches,” Standard Bank remuneration committee chairman Ted Woods said. “They are all brought to the remuneration committee. We debate them and then decide on the reductions. The governance design here is thorough and it works.”
Standard Bank dismissed staff in Tanzania, while others were incarcerated and the entire board restructured, Tshabalala said.
The steps come as Standard Bank said expenses rose faster than income growth in the first quarter. – Bloomberg