It was learnt last night that trouble began brewing for Sanusi following the Presidency’s decision to seek the Senate’s approval for his suspension three weeks ago to pave the way for a full-blown probe into the apex bank over infractions allegedly discovered in its book and operations.
It was confirmed last night that President Goodluck Jonathan had four weeks ago signed a nine-page letter written by the Attorney General of the Federation Mohammed Adoke with input from the Financial Reporting Council of Nigeria (FRC) for the consent of the Senate for the suspension.
The transmission of the letter to the Senate was delayed by the President’s trip to Addis Ababa for the African Union meeting, at the time. The letter had then documented the infractions allegedly committed by the current management of the apex bank led by Sanusi Lamido.
The letter which was expected to be delivered to the upper chamber on February 3, was predicated on the preliminary findings of the FRC that reviewed the bank’s operation and its 2012 account, which the CBN board and Ernst Young, its auditor have not signed.
The letter, sources said, was to be sent also to the board of the CBN to intimate the members of the government’s decision and reasons for the President’s planned action.
The letter that was to be read on the floor of the Senate in the first week of February was to bring to an end, preliminary investigation of the apex bank spanning about 10 months.
The origin: The Presidency, based on the preliminary findings by the FRC had in May last year, queried the CBN governor over 22 infractions discovered in the apex bank’s book. The response, it was learnt, was not satisfactory while the Presidency also wanted to put things in proper order ahead of the resumption of a successor to Sanusi Lamido who is expected to leave office on June 2.
Sources disclosed that the bank’s management violated Sections 6, 49, and 50 of the CBN Act and this is reflected in the accounts and explain why the accounts have not been signed by relevant authorities.
Section 6 (3d) provides that the board of the bank shall make recommendation to the President for the appointment of auditors in accordance with Section 49 of this act, the provision of the necessary facilities and the rates of remuneration.
Presidency sources said the CBN management did not seek the approval of the President on the appointment of Ernst and Young, its auditor and the N400 million allegedly approved as its remuneration.
The management also ran foul of Section 49 (4) of the CBN Act which stipulates that “the bank shall as soon as may be practicable after the last day of each month make up and publish a return of its assets and liabilities as at the close of business on that day, or if that day is a holiday, as at the close of business on the last preceding business day.”
Section 50 (5) provides that “a copy of the return referred to shall be forwarded to the president and shall be published in the gazette.”
Sources also revealed that the current management has never, since the assumption of office of Sanusi, published its account or submitted its monthly report to the President or publish them in the gazette.
The Presidency is also said to have condemned the failure of the apex bank to transit to the International Financial Reporting Standards (IFRS), the new accounting regime which banks under its supervision have since adopted.
Sources said the Presidency became suspicious when the CBN could not submit its 2012 account to the Financial Reporting Council (FRC), the body with the mandate to ascertain the compliance of companies with IFRS. Rather, the bank requested seven years’ grace for it to be able to transit to IFRS.
The President reportedly gave the CBN account to the FRC for review and part of the issues allegedly detected is the refusal of its auditors, Ernst and Young, to sign the account but rather, saying that it complied with the CBN Act.
Another infraction allegedly detected included the investment of a huge amount of money in an Islamic bank in Malaysia where Presidency sources said would not generate income.
Others are write-off of about N3.5 billion housing loan to some CBN staff and the donations to a political party to open up offices across the country. This donation, which was under the special access item in the account, was to feather Sanusi’s political ambition after leaving office, sources alleged.
Other issues are the non-consolidation of the debt of the Asset Management Company (AMCON’s) in the CBN account as well as the non-disclosure of the total liabilities through the bond floated by the company.
There is also, according to Presidency sources, alleged discrepancies in the 2012 account of the Nigerian Security Printing and Minting Company, a subsidiary of the apex bank.
“In the account of Mint, N29 billion was recorded as the turnover as against N60 billion in the book of the apex bank.”
Other issues include the donations to some higher institutions but which findings allegedly show were inflated. Bayero University Kano was said to have collected only N1 billion as against N4 billion allegedly reported by the apex bank. There are other illegal donations to churches, mosques and sundry sources, which the CBN Act never provides for.
Financial experts had then listed some of the implications of the complicated accounts of the apex bank:
• The successor to Lamido will have challenges with the financials of the apex bank since the accounts are not balanced and have not been signed. It also provides the opportunity for the successor to abandon caution and ethics.
• It goes to confirm that the President and this administration lack the courage to fight corruption.
• No deterrent to corruption as people can now beg their way out of corruption or indictment.
• CBN might lose moral justification to compel banks that it supervises to abide with laid down rules, e.g its refusal to transit to IFRS which the operators had adopted since January 2013.
• The CBN will have credibility problem if the infractions committed are not properly addressed and prevented from recurrence.
Source: Guardian/
No comments:
Post a Comment