Flaws, misleading information may forced CBN to withdraw seven – years financial statement

In the coming days, the Central Bank of Nigeria (CBN) may be asked to withdraw and restate the entire seven years’ financial statements published last week owing to the alleged inherent flaws and also, for containing misleading information.

The apex bank published the financial statements for 2016, 2017, 2018, 2019, 2020, 2021, and 2022 last week but findings by InsideBusinessNG showed that the published documents did not pass through approved procedures and were also, riddled with inaccurate figures.

In addition, the two auditors of the financial statements, Ernst & Young and KPMG had also confessed before an investigative panel of the Department of State Service (DSS) early this year that the 2016, 2017, 2018, 2019, 2020, and 2021 financial statements that have just been released were flawed, fraudulent and unreliable.

Another reason why the financial documents may be withdrawn, according to a source, is the guidelines from the Financial Reporting Council of Nigeria (FRC) titled, “Accounting Guideline for Financial Reporting by CBN”, which they alleged, was fraudulently prepared to cover up alleged unwholesome practices in the apex bank’s operations.

A top official who preferred anonymity defended the bank, stating that the financial statements satisfied the laid down procedure before they were published and hence, no need for their withdrawal.

“For now, I didn’t hear that they will be withdrawn because we followed the appropriate procedure. Every last week of February, we submit the audited accounts to the National Assembly and also to the Presidency for approval. So they won’t be withdrawn.”

He however said he was not sure of the president’s approval. “I did not know whether they got President Tinubu’s approval on these financial statements”, he told InsideBusinessNG on the phone.

The enabling act of the apex bank stipulates the procedures for the publication of a financial statement which include submission to the National Assembly for scrutiny, and thereafter, the approval of the President, after which it will be gazetted and published. Sources at the bank however confided in InsideBusinessNG that none of these financial documents pass through such procedures.

“The current National Assembly could not have scrutinised the financial documents because the standing committees of the Senate that would have done that were constituted the same week that the CBN published the financial statements”, stated another top official who is familiar with the issue.

“Also, former President Muhammadu Buhari did not approve the documents and the current President, Bola Tinubu has not approved the financial statements because they were part of the queries issued to the suspended governor, Godwin Emefiele and which he could not answer. The reason for the unavailability of the financial statements is one of the reasons for the appointment of the Special Investigator, Jim Obazee, who together with his team during the DSS investigation, had all resolved that the documents should be withdrawn, restated, and reissued because of the inaccurate information and also, their preparation with the FRC guidelines which were said to be fraudulent “.

The criminal aspect, according to the source is that both EY and KPMG, the two auditors to the CBN had, earlier in the year signed and submitted undertakings to the DSS, stating that the six financial statements from 2016 to 2021 were fraudulent and misleading and therefore, the figures therein should not be relied upon for any decision.

“As you can see, since their publication last week, Nigerians and the media have been quoting the figures in the financial statements. Unknown to them, those figures are not reliable because the guidelines that were used to prepare the audited accounts allowed them to cook up the figures”, stated another top official of the bank who is also well informed of the developments.

“For instance, the over N23 trillion loan (Ways & Means) from the CBN to the federal government was not the accurate figure”, he told InsideBusinessNG.

The publication of the financial statements, according to those that volunteered information, was done out of panic to give the impression that the current management under the Acting-Governor, Folasodun Shonubi is working. Another performance index that the current management could have used is foreign exchange, but this is still uncontrollable after 10 weeks of its unification.

Findings however show that the main reason for the publication of the statements without their restatement is to cover up shady dealings of the Emefiele era which the top hierarchy of the bank are all complicit in, and also to derail the ongoing investigation of the bank.

Before these publications, the last financial statement that was made public by the apex bank was that of 2015 which was gazetted and published in 2018 according to findings from the Government Press in Abuja and Lagos.

DSS in December 2022 assembled a team of forensic experts led by Jim Obazee, the current Special Investigator of the CBN who was re-appointed by President Bola Tinubu. Obazee, together with his team of forensic experts began the investigation of the banking industry including the CBN.

InsideBusinessNG had earlier in the year reported that the DSS, during its investigation that was suspended in January 2023, detected several holes in the apex bank’s financial statements from 2016 to 2021. This led to the decision, which they said, is also known to the CBN officials, that they should all be withdrawn and restated.