- Apex bank’s net income drops by 35bn
Six senior executives of the Central Bank of Nigeria, CBN, and 16 other bankers are to be arraigned today for N8billion fraud by the Economic and Financial Crimes Commission, EFCC, before a Federal High Court, Ibadan, Oyo State.
The apex bank’s chiefs and their accomplices from some commercial banks are implicated in a mega scam involving the theft and recirculation of defaced and mutilated currencies to the tune of N8billion.
The suspects, drawn from various business units of the CBN, are to be docked by the anti-graft agency before a Federal High Court in Ibadan today and Thursday.
The indicted CBN executives are: Patience Okoro Eye (Abuja headquarters), Afolabi Olufemi (Lagos office), Kolawole Babalola (Ibadan), Olaniran Muniru Adeola (Ibadan), Fatai Yusuf Adekunle (Head, Security, CBN, (Ibadan) and Ilori Adekunle Sunday (Akure).
The remaining 16 suspects drawn from various commercial banks were found to have conspired with the CBN executives to carry out the crime.
The EFCC alleged that instead of the suspects to carry out the statutory instruction to destroy the currencies, they substituted it with newspapers neatly cut to naira sizes and proceeded to recycle the defaced and mutilated currency into circulation.
Their action is believed to have contributed to the failure of the Federal Government’s monetary policy over the years as currency mop ups by the apex bank had failed to check the inflationary pressure on the economy.
The lid on the scam, which is widely suspected to have gone on unchecked for years, was blown on November 3, 2014 via a petition to the EFCC alleging that over N6, 575, 549, 370 was cornered and discreetly recycled by light fingered top executives of the CBN at the Ibadan branch.
The suspects, who were members of the Briquetting Panel, plotted their way to infamy on September 8, 2014 while carrying out a briquetting exercise at the CBN branch, Ibadan.
In banking parlance, briquetting is disintegration and destruction of counted and audited dirty notes. By this practice, depositor banks usually take mutilated notes to the CBN in exchange for fresh notes equivalent to the amount deposited.
The depositor banks in the case are Zenith Bank, FCMB, Wema Bank, Access Bank, First Bank, Skye Bank, Ecobank and Sterling Bank.
While carrying out the assignment, the team was alleged to have found one of the currency boxes filled with old newspapers instead of 20 bundles of N1,000 notes.
A similar case, according to investigation, was discovered on September 22, 2014 when a box that was supposed to contain N500 notes to the tune of N5billion was filled with old newspapers.
Unlike in the past, this fraud could not be swept under the carpet, as a member of the Briquetting Panel from the Osogbo branch blew the lid on it.
In a statement, the petitioner stated that the exercise was designed to last between August 4 and 8, 2014.
The petitioner, however, stated that she discovered a strange “sight” while opening the third box on the second day of the exercise.
She added that she confronted the other members of the panel, including Eye, Head, Briquetting Panel; Treasury Assistant; Coordinator and Head, Security, CBN, Ibadan, who all assured her that they would look into it.
But she later found out that it was all a ruse.
The petitioner said she later found out that Eye not only maintained sealed lips over the matter but omitted it from her report.
The EFCC is preferring a five-count charge against them.
CBN’s net income drops by N35bn
Meanwhile, CBN’s net income dropped to N35.4billion in 2014 from N209.6billion in 2013, according to a financial report released by the apex bank at the weekend.
According to the report, the net income of the bank for 2013 was N209.6billion while that of 2014 is N35.4billion.
It said that 80 percent of the amount had been remitted to the Federal Government in accordance with the Fiscal Responsibility Act.
The report also shows that balance of 20 percent has also been transferred to the reserves within the apex bank. It said that CBN’s audited financial statements for 2013 and 2014 had been released officially and that the International Financial Reporting Standards, IFRS, was adopted for its financial statements. The CBN further said that the two financial statements posted on its website had been approved by its board in accordance with the provisions of the CBN Act 2007.
“The IFRS, one of the frameworks internationally recognised and accepted, mandates adopters of the framework to prepare consolidated financial statements,” it stated, adding that the IFRS requirement implied that the financial statement of the CBN must be consolidated with those of investee’ s entities, including Nigeria Export-Import Bank, Abuja Securities and Commodities Exchange and Bank of Industry.
Others include Bank of Agriculture, Nigeria Interbank Settlement System, National Economic Reconstruction Fund, Financial Markets Dealers Quotation, African Finance Corporation and Agricultural Credit Guarantee Fund.
“The bank now has full IFRS-compliant financial statements for the years ended December 31, 2013 and December 31, 2014, respectively,” the report said.
It also said that the bank’s financial statements had been prepared under the CBN framework, adding that the adoption of IFRS by the CBN or any central bank the world over was not without difficulties and challenges.
The report said the non-profit-oriented mandate of central banks was one of the challenges encountered in the roles of price and financial system stability and economic growth. “Another challenge is the statutory constraints of the central banks. This explains why very few central banks have adopted the IFRS.” It further said that the apex bank was, however, able to work around these challenges to conclude a successful adoption of the IFRS within two years.