STANDARD BANK APPOINTS ACTING CEO IN MOZAMBIQUE AFTER FRAUD ALLEGATIONS

STANDARD Bank has appointed an acting chief executive at its Mozambique operation in response to a $4.6 million (about R66m) fine by the Central Bank of Mozambique for engaging in fraudulent activities. In a response to inquiries this week, Standard Bank’s head of Africa and international media relations, Kate Johns, said they would continue to engage with Banco de Mozambique for clarification on the foreign exchange allegations. The central bank also fined two of Standard Bank’s employees, who were not named, about $223 000 and $101 000 each, and barred the bank from engaging in some exchange-related activities for a year, it said in a statement this week. “As part of Standard Bank’s business continuity processes, an acting chief executive has been appointed to lead our executive management team. Standard Bank Mozambique is committed to doing business ethically and responsibly. In addition, our governance and compliance processes remain rigorous, as we regard our reputation as our most valuable asset,” Johns said. Banco de Mozambique said that following on-site inspections, “infringement proceedings were brought against Standard Bank and two of its managers … for serious breaches of a prudential and exchange rate nature”. It alleged the bank and the two employees were involved in the fraudulent manipulation of the exchange rate, implementing an illegal payments network based outside the country, and carrying out irregular operations of financial derivatives, among other offences. It was not clear what impact the suspension will have, but it could be serious, because Standard Bank controls about 45 percent of the exchange market, and holds the greater part of the deposits in foreign currency. The matter dates back to last month, when the Bank of Mozambique suspended Standard Bank from all activities on the Interbank Exchange Market. The central bank gave no reason for the suspension, but according to newspaper Carta de Mocambique, it followed an inspection that gave rise to suspicions vof banking rule violations.