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TMCNet:  How FRC report nailed Sanusi [Sun, The (Nigeria)]

[February 24, 2014]

How FRC report nailed Sanusi [Sun, The (Nigeria)]

(Sun, The (Nigeria) Via Acquire Media NewsEdge) By BLAISE UDUNZE  The Financial Reporting Council has noted that suspended Governor of the Central Bank of Nigeria, Lamido Sanusi ran a weak corporate governance structure as transactions that needed board approval were carried out in the apex bank without such approvals.


The Council in its report signed by FRC's Executive Secretary, Jim Obazee, to the President on the CBN stated that a number of transactions even of financial nature were carried out without board approvals as no approvals were provided as requested.

According to FRC, this shows a very weak corporate governance by the CBN and clear evidence that statutorily allowing the CBN Governor to be both the chief executive officer of the bank as well as chairman of the board was the greatest error made in the conception of the CBN Act 2007.

The report stated that board approval for the equity investment in the shares of International Islamic Liquidity Management Corporation of Malaysia to the tune of N0.743 billion was also not provided. The share certificate is also to be provided as it seems that section 34 of the CBN Act was violated.

It said that the date of the board approval of the apex bank's financial statements was not disclosed, adding that in the CBN response, "the president was informed that the management letter on the financial statement was yet to be discussed by the Board Audit and Risk Management Committee.

This, it said was contrary to section 3 (b) of the CBN Act 2007. This is supposed to take place, considered by the Board and decision taken." Accounting issues identified usually lead to adjustments in the financial statements before the approval of the board is secured on the accounts. It said that a number of issues on the draft management letter could testify to this.

According to the Council, what this means is that the financial statement submitted by the CBN Governor to the President was not approved by the governing board of the apex bank.

  Reacting to the allegations of financial recklessness, Sanusi questioned the reasons given for the action and said the presidency did not follow due process.

On the findings of the Finacial Reporting Council of Nigeria, Sanusi asked "if there is any problem in investing in education; building structures in universities; building structures in secondary schools?" or "is there evidence that these contracts were inflated or we awarded the contract to ourselves?" wondering "what exactly was reckless about contributing to education?" The ex-CBN boss maintained that the "Central Bank is an independent institution" insisting that "there is a section of the Act that says the president cannot remove the governor without two thirds of the Senate".

"You cannot go round that section" he continued, noting that "it undermines the entire principle" he said.

He reminded Nigerians that "the president does not appoint" insisting that "he proposes and the Senate confirms" claiming that the governor is appointed by both the president and the senate and should be removed by both.

He noted that he wants to seek legal intervention so that "governors coming after me will not refuse to act or refuse to be independent because of fear that they will be suspended".

The post How FRC report nailed Sanusi appeared first on The Sun News.

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