SANUSI's SUSPENSION: President Jonathan's Second Query To CBN Governor, Sanusi
Some days ago, President Jonathan's first query letter to suspended CBN Governor was revealed. A copy of President Goodluck Jonathan’s second query to Lamido Sanusi has been obtained.
The query was the communication from the presidency to the CBN governor alleging financial recklessness in the operations of the bank.
The query arose after Mr. Sanusi forwarded a copy of the CBN’s 2012 audited financial statements to the President on February 26, 2013.
The document was forwarded to Mr. Jonathan, alongside a covering letter referenced: FND/DIR/SEC/ACC/04/001.
Barely three months after the receipt of the letter, the President issued a 22-point query to Mr. Sanusi and demanded immediate response.
A copy of the query which was exclusively obtained by PREMIUM TIMES is dated May 4, 2013 and signed by the President.
In the letter, Mr. Jonathan noted that following the examination of the financial statements of the CBN as contained in the 2012 audited report, some issues were thrown up which required clarification.
“To this end,” Mr. Jonathan wrote, “I request that you avail me of detailed explication with respect to the under listed issues, providing, where available, relevant confirmatory letters and or board approvals.”
The President specifically requested Mr. Sanusi to forward to his office, the domestic report on the CBN’s 2012 financial statements by external auditors and the financial reporting framework under which the financial statements were prepared.
Mr. Sanusi was also directed to provide names of the trustees of the CBN’s self insurance, including the board minutes approving the said self insurance scheme and trustees and the entries of the annual appropriations indicating where it was posted in the financial statements.
Evidence of the license given to the CBN by the National Insurance Commission, to operate a self insurance scheme was also requested.
Parts of the query read, “Report from independent sources revealed that the CBN is insured by 29 underwriters on General Business Insurance and 20 underwriters on Group Life Assurance for 2011-2013. A reconciliation of this report with paragraph 3 above is required.
“The valuation report on certain assets of the CBN (as in accounting policy ‘a’) and how and when the fixed assets revaluation reserves was created and accounted for (As in the balance sheet), as well as the accounting policy of the CBN on short term investment.
“Detailed breakdown of: a) Long term loans of N550. 062 billion (beneficiaries) as in Note 5 and why it was fully provided for as irrecoverable, b) the banks’ that are involved in ‘other loans’ of N12.899 billion as in Note 5, that are also fully provided for as irrecoverable.
“c) Provision of loan losses of N585.703 billion (as in Note 5), d) Investment in Asset Management Corporation of Nigeria, AMCON< bonds of N3,596,356,000,000 that are expected to mature on December 2013, August 2014 and October 2014 and why no provision was made against them except general loans loss provision of N4.620 billion only (as in Note 6).
“e)Prepayments of N58.133 billion in 2012 and N102.459 billion in 2011 (as in Note 8) and why the bank was paying so much in advance. Board approvals for these levels of advance payments are required.”
The President also requested for Mr. Sanusi’s explanation of the relations between the N35 billion investment in the Bank of Industry (BOI) debentures in 2012 (as in Note 6) and “intervention activities” expenses of N19 billion in operating costs as in Note 27 as well as a detailed breakdown of the “intervention activities”’ expenses (as in Note27).
Based on the bank’s deposits of shares of N4.947 billion in 2011 and 2012, the President requested to know when the deposit was made, the names of the companies where the investments were supposedly made as well as the related amount and why shares were yet to be issued based on Note 8 of the audited report.
A detailed breakdown of the “other sundry assets” of N5.949 billion in 2012 and N3.393 billion in 2011 as in Note 8b and the reason why they are so classified and a complete reconciliation of “Notes and Coins in circulation” indicating “Deposit by banks” and “Withdrawal by Banks,” were also requested.
Mr. Sanusi was further asked to explain the composition of CBN’s gratuity of N72.653 billion in 2012 and N64,280 billion in 2011 and how it was determined as well as the board minutes and approval practice of making provisions for internal currency insurance based on the premium that would have been payable to external insurers had they been engaged and the names of the insurance companies that were filed tested in the exercise and the modalities thereof.
A detailed breakdown of the following were sought:
Currency issue expenses of N36.589 billion in 2012 and N47.337 in 2011 indicating the amount paid to the individual printing companies involved for 2011 and 2012 and the names and amount paid to each company.
Repairs and maintenance expenses of N2.268 billion in 2012 and N2.070 billion in 2011 and the extent of repairs of printing machines and intervention activities of N19 billion in 2012 and N23.865 billion in 2011as well as the administration of expenses of N42.596 billion and N48.340 billion in 2011.
Related party transactions indicating the persons involved, the applicable amount and the impact on the profit and loss of CBN, the statement of corporate governance on the financial statements.
Other explanations sought by Mr. Jonathan were, “The reason for IMF Quota of N421.864 billion in 2012 and N433.744 billion in 2011 was included in sundry receivables in other assets, confirmation of the movements in the ‘other investments’ as in Note 6 and other related board approvals.
“The reason why the financial statements of the CBN were not in compliance with Sections 44 and 57 of the Financial Reporting Council of Nigeria Act 6, 2011 and why the CBN continued to invest in AMCON’s bonds in 2012 and it intends to recover the funds invested in AMCON that are due by December 2013.”
The President claimed in the letter that Mr. Sanusi’s expeditious response on the issues raised would be helpful in providing proper appreciation of the nation’s economic outlook.
It was, however, Mr. Sanusi’s reply to this query that Mr. Jonathan forwarded to the Financial Reporting Council of Nigeria.
After considering the CBN’s financial statements for 2012 and Mr. Sanusi’s reply, the council gave report which the Federal Government said it relied upon to suspend the embattled governor.
Source: Legit.ng
