Findings suggest that the Central Bank of Nigeria would be asked to retract its audited annual financial reports, which were published last month.
This followed the discovery of anomalies and abnormalities in the financial statements by a committee looking into the apex bank.
The CBN disclosed its financial statements for the years 2016 to 2022 in August, and a Special Investigator that President Bola Tinubu appointed is currently looking into the financial services industry regulator.
On July 28, Tinubu appointed Jim Obazee, a former CEO of the Financial Reporting Council of Nigeria, as a Special Investigator to look into the actions taken by the top bank while its governor, Godwin Emefiele, was on suspension.
The Special Investigator is also looking into FRC, the Nigerian National Petroleum Corporation Limited, and other government-owned businesses in addition to the CBN.
The President said that the action was a continuation of the government’s anti-corruption campaign.
The letter, dated July 28, 2023, stated that the administration was continuing the fight against corruption by appointing you as a Special Investigator to look into the CBN and Related Entities in accordance with the fundamental goals outlined in Section 15(5) of the Federal Republic of Nigeria 1999 (as amended). You must report right away to my office for this appointment, which will have immediate effect.
“The full terms of your engagement as Special Investigator shall be communicated to you in due course but require that you take immediate action to ensure the strengthening and probity of key GBEs, further stop leaks in the CBN and related GBEs, and provide a thorough report on public wealth currently held by corrupt individuals and establishments (whether private or public).
In order to complete this project, “you are to examine the CBN and connected entities utilizing a team that is appropriately experienced, professional, and capable, and to collaborate with pertinent security and anti-corruption agencies. A weekly update on the status of the project is what I can anticipate.
A copy of the President’s order suspending Godwin Emefiele as CBN Governor on June 9, 2023, was also annexed.
To conduct the inquiry, the CBN Special Investigator is collaborating with a group of forensic accountants, auditors, and accountants.
On Monday, it was learned that the CBN may be asked to retract its seven-year audited financial account reports (covering 2016 to 2022) due to claims that the data in the reports was incorrect and misleading.
According to numerous people familiar with the inquiry, the relevant agency (FRC) would soon be able to force the CBN to close the contentious financial accounts after receiving clearance from the president.
The CBN financial accounts were allegedly prepared using guidelines allegedly obtained from the FRC in a contentious manner, according to top sources close to the Special Investigator and his team. IFRS 9, which requires full disclosure of all financial transactions, was not used in the preparation of the CBN financial accounts.
It was also discovered that the CBN allegedly paid N401.75 million to the IFRS Academy for the rules that were applied to the accounts’ preparation.
“As a government institution, you are required to deposit all income you receive into a Treasury Single Account, from which the government will remove a certain proportion. Documents show that the N401 million that the CBN spent for the accounting standards between 2016 and 2022 went into the IFRS Academy account. According to a senior person familiar with the investigation who spoke on the condition of anonymity, the academy is a limited guarantee company established by the FRC to train people in IFRS accounting.
“The problem is that there was no intended funding for the rules used to prepare the CBN accounts between 2016 and 2022. Additionally, the FRC’s board is supposed to approve and post any accounting guidelines it issues on its website. These actions weren’t taken. The source continued, “IFRS 9 was being avoided in order to understate data.
Giving the FRC accounting guidelines to outside organizations was allegedly improper, according to several individuals involved in the probe who spoke to STATE.
It was discovered as a result that the Special Investigator team had made suggestions that the presidential approval be given to the FRC in order to direct the CBN to withhold the released yearly financial reports between 2016 and 2022.
“The team has also requested an opportunity to speak with the accountants’ auditors. According to the team conducting the inquiry, some of the information found in the CBN financial accounts cannot be trusted. The CBN would be asked to remove the accounts when the President gives his approval so that new ones can be prepared using the correct accounting standards and technique, according to a second official close to the team.
Investigations have shown that the Department of State Services may request an interview with Shuaibu Ahmed, the FRC’s executive secretary and chief executive officer, as well as several other senior employees.
Additionally, the Special Investigator and his group are anticipated to examine FRC officials regarding charges concerning the contentious accounting standards employed by the CBN, among other things.
As part of their ongoing investigation, the DSS has already questioned a few of the CBN’s deputy governors.
Additionally, it was learned that future court proceedings may uncover additional cases involving Emefiele.
On July 28, Tinubu gave the CBN Special Investigator instructions to collaborate with security and anti-corruption agencies to provide a thorough report on public assets currently held by corrupt people and organizations, both public and private.
The president’s investigation into the CBN, NNPCL, and other government business entities has divided economists and civil society organizations.
While some people backed the action, others had reservations, saying it might send the wrong message to the community of international and foreign investors.
The suspended CBN Governor, Godwin Emefiele, and other top government officials may have broken any laws or been accused of abusing their positions, according to several experts and organizations.
Muda Yusuf, the chief executive officer of the Centre for the Promotion of Private Enterprise, claimed that the investigation was required to determine whether any violations or abuses of authority had occurred.
“It is a new administration, and if there is any suspicion that the case has not been handled properly, the only way to learn the truth is through the regular audit and possibly a forensic audit,” he said. It fits in quite fine.
“The usual procedure is to conduct a forensic assessment to see whether there was any infringement or abuse of office if there is any indication of such. Before you can take any action against anybody, you must first gather the facts. What it is is that.
Professor Sheriffdeen Tella, an economist at Olabisi Onabanjo University in Ago-Iwoye, Ogun State, also backed the inquiry.
Any study is worthwhile, he declared. Investigation is required to ascertain the openness and accountability of their position and to confirm that they have been operating within the bounds of business etiquette. Therefore, there is absolutely nothing wrong with the investigation.
Prof. Bright Eregha, an economist from the Pan-Atlantic University School of Management and Social Sciences, suggested that the Federal Government may have requested the investigation because it believed the apex bank was not operating effectively or adhering to its mandate.
He stressed that the investigation would be expanded to include other government organizations, including the Nigerian National Petroleum Company Limited and other businesses, and that it would help restore trust in the system.
“The CBN ought to be an independent body, but as we can see from the previous administration, that independence was not really present insofar as the CBN governor was not involved in political matters,” Eregha added.
“We witnessed what took place in regards to his affiliation and actions. The redesign of the Naira is another concern. I believe that this government just believed that the CBN was not upholding the independence and purity of the central bank. They therefore felt the necessity to conduct further inquiries.
”Don’t forget that the CBN has provided significant financial support to numerous sectors in the past. I believe the present administration believed that an investigation was necessary before we could proceed.
“That probe looks at other financial institutions in addition to the CBN. Additionally, I believe that it will extend beyond financial institutions to organizations like the NNPC and other locations that we need to look into in order to reestablish some level of confidence in Nigeria.
Professor Akpan Ekpo, the chairman of the Foundation for Economic Research and Training, voiced concern that the top bank audit would give the wrong impression to potential investors.
But he insisted that the President might have had a rationale for launching the investigation.
He said, “My concern is that by making the central bank audit so public, we would send the incorrect signals to potential investors, particularly foreign investors, who will start to wonder whether our apex bank has significant issues. I see it that way.
“But as president, perhaps he is aware of information we are not. You send the wrong message about the economy’s direction and what will happen moving forward when you start questioning your apex bank. We already face difficulties in both recruiting investors and managing our foreign exchange reserve. It is getting smaller every day.
Ekpo expressed dissatisfaction with the special investigator’s selection, saying, “I don’t know him but I wish he had sent someone completely neutral.”
Debo Adeniran, the head of the Center for Anti-Corruption and Open Leadership, demanded that Obazee look into the illegality of the redesign of the naira note as well as the central bank’s suspended governor’s monetary policy. He added that if it is discovered that the policy’s implementation had political overtones, the former CBN boss should be charged with crimes against humanity.
“They should look into how the former governor of the CBN changed the monetary policy of Nigeria and the illegality that was committed when he didn’t do his homework before he changed the naira’s color,” said Adeniran. The naira doesn’t really have a problem, therefore we need to determine if he had legitimate reasons for altering the color of the currency or not. The issue might have been with the monetary policy he implemented.
“They should examine the monetary policy he implemented, and if there is any political undertone for its implementation or the changing of the naira’s color without following due process, then he should be seen to have committed a crime against humanity.
Auwal Rafsanjani, executive chairman of the Civil Society Legislative Advocacy Center, said the appointment demonstrated the laxity of government agencies like the National Assembly, which should ideally checkmate government activities. He added that anyone found to have stolen public funds should face legal action and be barred from holding public office.
“We applauded the attempt to recoup every penny stolen from every thief. Therefore, we are urging Bola Tinubu’s administration to make sure that everyone who has committed an offense is not only investigated but also barred from holding public office if there is any proof of looting or theft of public funds. We hope that no political bias or cover-up will be present during the investigation,” he said.
