NEWS: Finbond Mutual Bank Hit R10 Million Fine
Bank News
The Prudential Authority has hit Finbond with a R10 Million fine over misrepresenting their financial position.
The matter first started in 2012 when Finbond Mutual Bank loaned R155 Million to its own parent company Finbond Group.
In 2018 the Prudential Authority got stressed that the parent group owned 100% of the shares of the bank and so had essentially loaned themselves the money. It is also a lot of exposure in one place so they asked the bank to adjust for this risk or get Finbond Group to repay the loan. There also seemed to be a serious lack of paperwork which needed to be sorted out.
In March 2019 Finbond Group met with the Prudential Authority and said they had sold some assets and settled the Finbond Bank loan. But an auditor found this was not accurate. A month later the Bank then told the Regulator that the loan had been settled in full.
But 4 months later another auditor found there were still accounting problems with how the loan was settled.
Then finally the loan was eventually settled in cash but only in 2020.
Due to this irregularity in reporting and what the Prudential Authority call misrepresentation of the facts Finbond Bank have now, after further investigation, been hit with this massive fine.
