(TROPICS MAGAZINE / THIS DAY) – The suspended Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has responded to the various allegations levelled against him by the Financial Reporting Council of Nigeria (FRC), which were cited as the reason for his suspension from office on February 19, 2014.
In a 27-page response released yesterday, the suspended governor also expressed sincere hope that having painstakingly provided detailed explanation, backed by verifiable documents, President Goodluck Jonathan would find his explanation satisfactory and “in line with his (Jonathan’s) adherence to fairness and justice”, revisit and redress the issue of his suspension. Furthermore, Sanusi urged the president to apply the same rationale and rigour to other agencies of the federal government that had 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”.
He said he was responding to each of the allegations to enable the general public see that each and every allegation levelled against the CBN under his leadership was 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. He specifically said he was compelled to make public his responses in the interest of transparency and accountability, adding that he was never availed of FRC’s briefing before the suspension.
“Let me also state that I saw the FRC ‘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 FRC for comments or explanations,” he said. On the petition written by the former Managing Director/CEO of the defunct Intercontinental Bank Plc, Mr. Erastus Akingbola, he said it was a rehash of baseless allegations that the sacked bank MD had been making since 2010, “which apparently he must have been asked to reproduce on February 9, ten 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 judgment has been obtained in a London court, and who furthermore is facing criminal prosecution at home for offences including criminal theft,” he charged.
Sanusi added that a careful examination of the allegations contained in the FRC briefing note to the president would 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,” he observed.
Responding seriatim to the 30 allegations, he said the 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 ignores global best practice. “This 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. See Annexure A, which shows the composition of the board of directors of central banks in over 55 different countries,” he pointed out.
On alleged fraudulent activities and sundry payments of N38.233 billion in 2011 for the printing of banknotes to the Nigerian Security Printing and Minting Plc (NSPMP), whereas the entire turnover of NSPMP was N29.370 billion, he said the expense item of N38.233 billion to NSPMP was made up as follows: a) N28.738 billion payment to NSPMP in 2011; b) N6.587 billion accrued liability in 2011 but paid in 2012 when deliveries were received; and c) N2.829 billion 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 said.
Responding to the fictitious payments to (a) Emirate Airlines: N0.511 billion which allegedly does not fly local charter in Nigeria; (b) Wings Airline: N0.425 billion which allegedly is not registered with the Nigerian Civil Aviation Authority (NCAA); and (c) Associated Airline: N1.025 billion which allegedly did not have a turnover of up to a billion naira in 2011, he said the CBN neither engaged, paid nor claimed to have paid Emirates Airlines.
Rather, he clarified that 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. He contended that a simple enquiry by the FRC would have clarified and avoided this misrepresentation.
With respect to Wings Aviation Limited, Sanusi said the CBN had 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. Again, he said a simple enquiry by FRC would have made this clear.
On Associated Airline Limited, he said the CBN did in fact pay a total of N1.025 billion to Associated Airline Limited and that the CBN was not responsible for how the company reports its turnover. On the allegation that the leadership of the CBN was unconcerned about its investment in the Bank of Industry (BoI) despite not receiving the share certificates for investments made since September 2007, he said he duly instructed a reconciliation exercise be carried out by the CBN on all its investments in parastatals and companies in 2009, adding that the CBN wrote various letters to BoI requesting its share certificates.
He pointed out, however, that on September 20, 2009, the BoI wrote to the CBN explaining that the delay in the issuance of the share certificates was as a result of BoI seeking a concession on the payment of stamp duties and other statutory fees from the Corporate Affairs Commission (CAC) and the Federal Inland Revenue Service (FIRS) with respect to the investment by the CBN and the Federal Ministry of Finance (FMF).
On the charge by FRC that the leadership of the CBN wrote off loans supposedly made to staff members to the tune of N3.85 billion in 2012, he said the write-off was not made in favour of CBN staff, but rather it was a CBN board approved write-off as forbearance to Heritage Bank on 17 December, 2010 as part of the process of facilitating its resumption of business as a regional bank.
His response on CBN’s non-compliance with the IFRS accounting standards in preparing its 2012 financial statements further indicated that FRC had waived the requirement for the CBN to comply with IFRS standards in preparing its 2012 financial statements by its letter of exemption dated February 26, 2013. Addressing the issue of unlawful expenditure on CBN intervention projects and donations to universities, Sanusi said the interventions were part of the central bank’s corporate social responsibility (CSR) initiatives, which fully comply with the CBN Act and were duly approved by the board.
“It is worth noting that the CSR policy of the CBN is consistent with the activities of many other central banks of developing countries including, Bank Negara Malaysia, the Bank of Namibia, the Bank of Botswana and the Bank of Indonesia,” he said. The suspended governor also provided detailed accounts on all the allegations, which were contained in the FRC briefing note to the president and also attached to his letter of suspension.
In conclusion, Lamido hoped that the president would find the response satisfactory, and in line with his adherence to fairness and justice, “revisit and redress the issue of my suspension,” adding that if the CBN had received the briefing note, which he said was prepared in June 2013, all the misconceptions, misrepresentations and erroneous inferences contained therein would have been cleared, and the misleading of the president would have been avoided.
He stressed that the CBN had achieved so much under his watch and made huge contributions to the Federation Account, while maintaining macroeconomic stability, adding that before he assumed office at the CBN, the contribution of the central bank to the Federation Account was N8 billion. “Based on the 2012 annual accounts, the central bank’s contribution rose tenfold to N80 billion, while in 2013, our contribution, based on the audited accounts, was N159 billion.
“It is noteworthy that in the 5 years of my tenure as CBN governor (2009 – 2013), the CBN has contributed N376 billion to the federal budget as IGR (Internally Generated Revenue),” he indicated, maintaining that the record vitiated the claim of financial recklessness/wastefulness levelled against his leadership at the CBN.