Home / Metro News / Allegation of financial recklessness, fabricated -Sanusi

Allegation of financial recklessness, fabricated -Sanusi

The suspended Governor of the Central Bank of Nigeria, Mr Lamido Sanusi, has described the allegation of financial recklessness leveled against him by the Financial Reporting Council of Nigeria as a “malicious” and calculated attempt meant to mislead the President into believing that the management of the apex bank was guilty of misconduct and recklessness.

In what could be described as his first official response to the allegations, Sanusi, in a letter to Jonathan said contrary to claims by the presidency that he was asked to respond to issues raised in the FRCN report, he only saw the “Briefing Note” of the council for the first time when it was attached to his suspension letter.

In the letter, submitted to the president on March 10, a copy of which was made available to our correspondent  on Sunday, the suspended governor said at no time were the allegations in the report sent to the CBN either by the President or the FRCN for comments or explanations.

He said, “On Wednesday 10th March 2014, I submitted a Memorandum to His Excellency, Mr President, with supporting documentation, effectively addressing all the allegations contained in the FRCN Briefing Note, the letter of suspension and the Akingbola Petition.

“Having submitted my response to the President, I am further compelled, following the recent press briefing and comments by the Senior Special Adviser to the President on Media, as well as numerous other references to the allegations in both local, international and online media, to put to the public my responses, in the interest of transparency, accountability and my responsibility to the Nigerian people.

“Let me also state that I saw the FRCN ‘Briefing Note’ for the first time when it was attached to the suspension letter. At no time was this report sent to the CBN either by the President or the FRCN for comments or explanations.

“A careful examination of the allegations contained in the FRCN Briefing Note to Mr President, will show that each of the allegations could easily have been resolved by a simple request for clarification or more careful review.

“There is no doubt that if the CBN had received the Briefing Note, which was prepared in June 2013, all the misconceptions, misrepresentations and erroneous inferences contained therein would have been cleared.

” I am publishing these responses to enable the general public see that each and every allegation levelled against the CBN under my leadership is false and unfounded, and that many of the allegations were malicious and fabricated, having been designed to mislead the President into believing that the Management of the Central Bank was guilty of misconduct and recklessness.”

On the allegations by former Managing Director of the defunct Intercontinental Bank, Mr Erastus Akingbola of fraudulent take over of the bank, Sanusi described them as baseless.

He said, “As for the Akingbola petition, it is a rehash of baseless allegations he has been making since 2010 which apparently he must have been asked to reproduce on February 9, 10 days before the suspension.

“It is indeed strange that the CBN Governor can be suspended based on allegations written by a man who ran his bank into the ground and against whom judgement has been obtained in a London court, and who furthermore is facing criminal prosecution at home for offences including criminal theft.”

The governor, in providing specific responses to all the allegations raised against the apex bank faulted all the claims by the FRCN report.

For instance, on allegation of weak corporate governance at the CBN on account of the fact that the office of the Governor is fused with that of the Chairman of CBN’s Board of Directors, Sanusi said the allegation ignores the fact that global best practice is that the Governor of the central bank is the Chairman of the Board of Directors of the central bank.

This according to him, is currently the practice in about 55 countries.

On allegation that the CBN’s breakdown of “Currency Issue Expenses” for 2011 and 2012 indicated that it paid the Nigerian Security Printing and Minting Plc N38.233bn in 2011 for printing of banknotes, whereas the entire turnover of NSPMP was N 29.370bn, the suspended governor said the expense item of N38.233bn to NSPMP comprises N28.738bn payment to NSPMP in 2011; N6.587bn accrued liability in 2011 but paid in 2012 when deliveries were received; and N2.829bn audit adjustment journal entry into the account at the end of 2011 in respect of prepayments to NSPMP.

” Evidently, the difference between the numbers in the financial statements of CBN and NSPMP is a simple reflection of timing differences between recognition of expenses by the CBN and income recognition by the NSPMP, with both entities applying conservative accounting policies,” he added.

On FRCN’s claims that the CBN made fictitious payments of N511m to Emirate Airlines which allegedly does not fly local charter in Nigeria; N425m to Wing Airline which allegedly is not registered with the Nigerian Civil Aviation Authority and N1.025bn to Associated Airline which allegedly did not have a turnover of up to a billion naira in 2011, Sanusi replied “The CBN neither engaged, paid nor claimed to have paid Emirates Airlines.”

Continuing, he added, “Rather, the CBN engaged and entered into an Air Charter Services Agreement with Emirate Touch Aviation Services Limited, which is a local Nigerian charter service company.

” A simple enquiry by FRCN would have clarified and avoided this misrepresentation. With respect to Wings Aviation Limited, the CBN contracted Wings Aviation Limited, which changed its name to Jedidiah Air Limited on 21 August 2009 but only notified the CBN of the change on 28 February 2012.

“With respect to Associated Air Limited, the CBN did in fact pay a total of N1.025bn to Associated Airline Limited. It is worth stating that the CBN is not responsible for how the company reports its turnover.”

Responding to allegation that the CBN’s expenses on Private Guards and Lunch for Policemen went up from N0.919bn in 2011 to N1.257bn in 2012, he said that in 2007 before his tenure, the CBN adopted a policy to outsource non-core functions, including security services.

This decision, he added, enabled the bank to focus on its statutory mandate and to reduce its overheads.

He said, “Accordingly, the CBN retained the services of about 13 private security companies to provide access control and security check services.

“In 2012, the CBN budgeted N600m for security services but spent N582.2m on private guards.

“To complement the efforts of private guards, the CBN also requested the services of security agencies, in light of the increased security challenges, especially the activities of the Boko Haram terrorist group.

“These security personnel were engaged on a daily basis; and were attached to senior CBN officials; special assignments such as security coverage for currency movements; static guard duties at the bank’s premises nationwide, and other sundry engagements.

” About 2,406 Policemen are currently deployed on a daily basis to various branches and other locations of the CBN.

“These security personnel were paid a daily lunch and transport allowances totalling N675.02m in the year under review.”

In replying the allegation that the CBN paid excessive legal and professional fees of N20.202 Billion in 2011, Sanusi said the apex bank, like any other public entity, is not immune from liabilities that arise from judgments and orders of the Nigerian courts.

“The referenced N20.202bn spent under this head covered the CBN’s judgment debt liabilities in the year under review.

” Of particular reference is the judgment of the Supreme Court in the case of Amao v the Central Bank of Nigeria, [SC 168/2007] delivered on 21 May, 2010, wherein the apex Court directed that the CBN pay employees of the Bank who had retired prior to 2000, pension under the harmonised structure introduced by the FG.

” Note that the negotiated litigation liability that arose from the above-specified matter was approximately N19.8bn.”

The suspended governor in his submission in the letter urged the president to “revisit and redress the issue of my suspension.”

He also called on the president to apply the same rationale and rigour to other agencies of the Federal Government that have had serious allegations and queries levied against them, and presume upon them to provide responses and explanations with the same level of clarity and transparency.

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