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Outrage Over CBN’s Unaudited Account

Without Audited Accounts For Three Years Running, Concerned Citizens Are Worried Over Authenticity Of A Report The Central Bank Of Nigeria (CBN) Submitted To Government’s Transition Committee

Sam Diala

A few days after it was revealed that the Central Bank of Nigeria (CBN) has no audited financial statement for three consecutive years, 2012-2014, a more worrisome dimension has manifested in the entire episode, creating far-reaching ripples in the nation’s financial services sector which is subject to the apex bank’s regulatory functions.

Questions are being asked if CBN submitted a report to the Transition Committee of outgoing government and the authenticity of the operations update contained in the document, if it did. Industry watchers and wellmeaning Nigerians are skeptical about the extent this would help the incoming administration and the image of President Goodluck Jonathan administration which has come under immense attack by Nigerians in a couple of days over the scarcity of fuel across the country.

The UNION had exclusively reported on Monday that the CBN had operated at variance with the 2007 CBN Act which requires it to present a true and fair view of its operations by way of audited Report and Accounts at the end of every financial year (January to December). It was however observed that this statutory requirement was being observed in the breach by the nation’s 57-year-old apex financial regulatory institution.

However, a few days to the end of President Goodluck Jonathan’s administration on May 29, the bank’s financial statements have not been submitted to the Presidency and the National Assembly as required by Law, creating what observers refer to as major statutory infraction, as questions are being asked how the bank had operated without such a vital document in 36 months. CBN officials who reacted to the publication on Monday, expressed displeasure and what they called “total disappointment” that The UNION should present such a sensitive matter to the public “at this time”, wondering why this newspaper should not have exercised some patience until a more convenient time.

They however did not deny that the bank was in arrears of three years audited financial reports which puts it on a precipice vis-a-vis its supervisory role over the nation’s financial institutions which should borrow a leaf of “leadership by example” from the lender of last resort. With this unbecoming development, industry watchers are wondering what the bank submitted to the Transition Committee constituted by President Jonathan to collate reports and hand-over notes from government ministries, departments and agencies (MDAs) preparatory to the formal inauguration of President-elect, Muhammadu Buhari, as Jonathan’s successor this Friday. Director-General of the Financial Reporting Council (FRC), Jim Obaze, in a telephone conversation yesterday told The UNION that the Council had not received CBN’s Board-approved financial statements for 2012-2014. He denied insinuations in certain quarters that the Council had actually received the documents and that it had treated them accordingly for Presidential approval. “The Central Bank of Nigeria has no audited financial statements for 2012, 2013 and 2014.

I am not aware that the statements were forwarded to FRC for necessary action. The FRC can only treat accounts that have been approved by the board of the institution and there must be an accompanying letter to that effect. If anybody says he has sent such accounts to us, ask for evidence, such as copy of the board’s accompanying letter,” Obaze said. Asked what implication this anomaly would have on the operations of the apex bank, Obaze said it would negatively affect the activities of the bank in the areas of its monetary policy functions as stipulated in the CBN Act. “If the bank has no audited account for three years, how can it play its role as manager of the nation’s foreign reserves and foreign exchange, as well as monitoring inflation and determining interest rates?”, the FRC boss asked, adding “It is not for us to determine this, our role is to treat accounts of the bank duly considered and approved by the board.”

CBN’s Director of Corporate Communications, Ibrahim Mu’azu simply ignored The UNION enquiries when contacted through sms. Industry watchers who spoke to The UNION on the development were concerned that the bank might not have submitted a fair and proper view of its operations to the Transition Committee which would enable the incoming administration to know how to put things right, where necessary. Many of the respondents preferred not to have their names published because of what they described as their role in the banking industry and their relationship with the apex bank.

A Lagos-based legal practitioner, Victor Ukutt, who has been involved in many banking and financial related cases, expressed disappointment at the development. Ukutt, lamented what he called monumental irregularities that had been going on at CBN since the days of its immediate past Governor, Malam Sanusi Lamido Sanusi. Tracing the trouble with the bank to the banking reform of 2009 initiated under Sanusi which resulted in the merger, acquisition and nationalization of some banks, Ukutt said the institution needs to be thoroughly cleaned-up beginning with the administration of Sanusi who he accused of being insincere based on the bank’s doubtful legal services put at N150 billion. “If Buhari wants to start reform, particularly in the banking sector, the place to start is Sanusi’s tenure. If at this time the bank cannot present an audited account which is in contravention of the CBN Act, you begin to wonder what the bankers’ bank has to show for its supervisory role in the financial services sector.

If Buhari does not arrest Sanusi to stand for trial, I do not see how he is going to go about his anti-corruption agenda,” Ukutt said. Ukutt said the irregularities that occurred in the banking industry under Sanusi would make rendition of financial statements by the bank practically impossible. “So many people became billionaires overnight because of the banking reform introduced by Sanusi. My insight into banking and AMCON related cases shows me the level of irregularities that occurred in the system when he hijacked people’s banks without recourse to shareholders or the articles and memorandum of association of the banks, took over the banks and partitioned them to their nominees and associates.

The UNION could not ascertain the contents of the CBN report to the Transition Committee, Obaze however expressed concern that the outcome was likely to put the bank in a bad light: “The best thing to do is to do the right thing. The bank’s accounts must be professionally presented, have them audited by external auditor or auditors, the board would meet and discuss them thoroughly before transmitting them to FRC” which is the technical supervisor of the apex bank.

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