FRC Indicts CBN, Sanusi On Financial Reporting

Posted by African Examiner Business News, Latest Headlines Friday, March 28th, 2014

The Financial Reporting Council of Nigeria (FRCN) on Thursday said the Central Bank of Nigeria (CBN) did not comply with the International Financial Reporting Standard (IFRS) in its 2011/2012 financial year report.

Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi

The Executive Secretary of the FRC, Mr Jim Obazee, said this at the hearing to investigate the CBN on its activities for financial year ended Dec.31, 2011 to 2012 in Lagos.

Obazee said that CBN budgeted N50 million in 2010; it also budgeted N200 million each in 2011, 2012 for International Financial Reporting Standard (IFRS) compliance, but did not comply with it.

The CBN, according to the council, also budgeted N150 million for IFRS compliance, which was reflected in the 2013 financial report, but without board approval.

The investigation also included related matters arising from transactions and events which impacted on the 2011 and 2012 from earlier year. It also included the impact of the development on the later period.

Obazee, the Chairman of the panel, insisted that the CBN under the leadership of the suspended Governor, Malam Sanusi Lamido Sanusi, lacked corporate governance initiative.

He said the N500 billion Power and Airlines Intervention Fund (PAIF) claimed to have been released to the Bank of Industry (BOI) was still domiciled in the bank.

Obazee said that BOI also collected one per cent interest which did not reflect in its books.

He also insisted that CBN needed to explain why each department had its intervention projects, especially the governor’s office, whereby one of such interventions involved dashing out N10 million to building palaces for five royal fathers.

The panel frowned at donations and interventions made by CBN without board approval.

It also insisted that there is no section of CBN’s Act that empowered it to subscribe to shares of the Islamic Liquidity Management Corporation (ILMC).

The council also alleged that CBN was yet to receive the share certificate for investments made in the Bank of Industry since September 2007 and that the leadership of the CBN was not worried about the delay.

He also told the panel that CBN’s auditors said they had sighted the share certificates for LMC and Bank of Industry (BOI).

Responding, the Deputy Governor, Corporate Services, Alhaji Suleiman Barau, however, promised that the CBN would henceforth be more compliant with the international reporting standard.

The former deputy governor of the CBN, Mr Tunde Lemo, said the bank’s numerous responsibilities distracted it from complying.

Lemo said such responsibilities, included consolidation of its subsidiaries as well as making sure that commercial banks comply with IFRS.

Also, the BOI Managing Director, Ms Evelyn Oputu, said the delay in the share certificate issuance was because BOI was seeking a concession on stamp duty payment.

Oputu also said other statutory fees from the Corporate Affairs Commission (CAC) and the Federal Inland Revenue Service (FIRS) and investment by the CBN Federal Ministry of Finance delayed the certificate.

She, however, said that all those were secured in 2013. However, the former governor of CBN, Sanusi and the Acting Governor, Dr Sarah Alade, were not at the proceedings. (NAN)