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Security Agencies After Firms Involved In Forex Racketeering, Says CBN

The CBN boss, however, stated that if findings later show some of the transactions can be cleared, the information will be made known.


Cardoso

 

The Central Bank of Nigeria (CBN) says security agencies including the Economic and Financial Crimes Commission are investigating questionable foreign exchange allocations and forward contracts previously estimated at $2.4bn made by certain firms.

Recently, the apex bank engaged a global firm, Deloitte, to carry out an audit of the $7 billion debts, revealing that about $2.4bn FX allocations from the $7bn backlogs were invalid.

Briefing journalists in Abuja after the 294th meeting of the Monetary Policy Committee, the CBN governor, Olayemi Cardoso, said security agencies were investigating the FX transactions that had been declared invalid by the audit report.

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Cardoso said law enforcement authorities would unravel issues around foreign exchange transactions that did not meet the standards of the regulatory agency, saying the report of Deloitte consultants revealed that the majority of the transactions did not meet the criteria for payment.

“Recall that when we came in September, we had a backlog of forward transactions which were contractual and which had already been contracted before we came in. It was clear to us that it was very important in the interest of the credibility of the central bank, which then was very much in question, we were able to satisfy and take care of these forwards,” he said.

“During a Senate hearing, I had actually made reference to this and said that this would be a priority to ensure that we take care of these forwards within the resource constraints we had. And that was why, on a regular basis, I tried to address the issue with the press and be as transparent as possible to allow Nigerians to know exactly where we stood and what we were doing.

“During that period we settled certain tranches and then we got wind of the fact that, well, there were several transactions which, quite frankly, had some issues concerning the genuineness of them. That was how we brought in Deloitte management consultants who took time, and this did take months. This is not something that happened overnight.

He also cited the lack of valid documentation, among other infractions and discrepancies that were revealed in the audit report, noting that several anomalies, including the allocation of millions of dollars to fictitious entities, and the provision of FX allocations without the corresponding naira value.

The CBN boss, however, stated that if findings later show some of the transactions can be cleared, the information will be made known.

“We determined that a number of these transactions did not qualify. In some cases, we have some allocations made in millions of dollars, which were never requested; we also had somewhere they had no naira and they were also allocated some foreign exchange.

“It was for that reason that we refused to validate those particular transactions. Apart from the fact that documentation was not satisfactory, in many cases, they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid.

“I would emphasise that if there’s any information to the contrary, we would in due course consider that. But as of today, that is exactly where it stands and the law enforcement agencies are taking a very hard look at those transactions. I will say again, that the valid transactions as far as the Central Bank of Nigeria is concerned have been taken care of,” he added.