Suspended Governor of the Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, yesterday refused to appear before a panel set up by the Financial Reporting Council of Nigeria (FRCN), which was mandated by the federal government to investigate him.
The investigation of the CBN financial reporting and
other transactions, which entered its second day at the council’s office in Lagos, was conducted without the embattled CBN governor in attendance.
Although there was speculation that Sanusi was around somewhere in the premises, but it later turned out to be false, as he could not appear before the panel until the time of its adjournment by 4pm.
It was gathered that Sanusi’s lawyer later brought a letter saying he would not appear before the panel as the case was in court.
The panel, however, indicted the CBN under Sanusi for non-compliance with the provisions of the International Financial Reporting Standard, his absence notwithstanding.
The probe, which is at the instance of the Presidency, said the CBN had since 2010 been expressing intention to comply with the IFRS provisions.
According to the Executive Secretary/CEO of the FRCN, Mr Jim Obaze, the CBN applied and budgeted for the compliance in 2010, 2011 and 2012 but could not do anything with the huge funds it budgeted for it.
He said that it was only in 2013 that the bank decided to start the process of compliance with the IFRS.
Speaking further, he said in 2010, the CBN budgeted N150 million, in 2011 and 2012 it set aside N200 million each while N150 million was for 2013.
The panel chairman questioned the moral right of the CBN to compel the commercial banks to comply with the IFRS.
Responding, the Deputy Governor, Corporate Services, CBN, Alhaji Suleiman Barau, and former Deputy Governor of the CBN, Dr Tunde Lemo, made some explanations which were not satisfactory to the FRCN.
They however promised that the CBN will henceforth be more compliant with the international reporting standard.
The FRCN boss expressed worry that the compliance efforts are not reflected in its Strategic Document for 2012-2015, to which the apex bank officials replied that it was captured in the CBN’s initiative document.
Some key issues on which the FRCN official grilled the officials of the CBN and their auditors included the CBN’s controversial intervention funds, donations and the alleged N10 billion spent on the renovation of five royal palaces.
The CBN officials, however, described the allegation of the five royal palaces as absolutely untrue. It was learnt that the allegation was raised in a petition written by one Akintan Edet of Banking Supervision Department of the CBN.
Another key issue that took centre stage at the probe panel was the N500 billion debenture shares of the CBN in the Bank of Industry (BOI).
According to the Executive Secretary of the FRCN, the debenture shares were taken without any approval.
“There was no board approval or approval from government,” he added.
He also said that the debenture share issue was fraught with irregularities.
Questioning the whereabout of the money, Obaze said the N500 billion was not captured in either CBN books nor BOI books.
But CBN, in its defence, said that it was the BOI that should give account of the money.
The Managing Director of BOI, Ms Evelyn Oputu, explained that the “fund had flown to where it should be,” that it had been disbursed to the benefiting Small and Medium Scale Enterprises.
In querying the entire transactions, the FRCN wondered how the Assets Management Corporation of Nigeria (AMCON) should be the beneficiary of the fund, having received N26 billion.
Obaze insisted that the books of the BOI should reflect the N500 billion if it actually received that amount from the CBN and also show how the money was disbursed to the beneficiaries.
The FRCN boss also took on the CBN officials on the shares of the Islamic Liquidity Management Corporation (ILMC) which he said had no legal backing whatsoever.
He said that the CBN’s enabling laws did not empower the CBN to commit public funds to such transactions.
He challenged the CBN officials to point out the relevant sections of the CBN enabling Act that empowers the apex bank to take on such an enterprise.
The Deputy Governor Operation, of CBN, Kingsley Moghalu, explained that in taking the action, that is writing a memo to the president, he was not aware if Sanusi sought any legal advice.
He said in taking the action, the CBN governor may have relied upon the section empowering the CBN to maintain foreign reserve.
The panel investigation took place amidst tight security. There were many armed police personnel within the premises who screened and frisked everyone that entered the conference room, including the invited CBN and BOI officials.