By Com. Timi Frank
Recent sordid revelations from the Central Bank of Nigeria (CBN) show that the anti-corruption war in Nigeria has been nothing but cosmetics. Is it not strange that six CBN staff could be fingered as having defrauded the nation to the tune of N8billion without being detected? Curiously, the accounts rendered of the fraud by the CBN and the EFCC have failed to gel. A cursory look at the explanations given to members of the public by the CBN and EFCC – now probing the ‘fraud’ leave much to be desired as they differed in material details germane to shedding light on the true nature and extent of the heinous crime said to have been partly responsible for the rising inflation in the country and by extension, the weakened purchasing power of the average Nigerian. For the purpose of clarity and emphasis, I want to reproduce excerpts from the statements of the EFCC and CBN here: According to the Economic and Financial Crimes Commission (EFCC), six Central Bank of Nigeria (CBN) officials and 16 others from some commercial banks allegedly defrauded the CBN to the tune of N8billion by stealing and recirculating defaced and mutilated currencies. The Head of Media and Publicity of EFCC, Mr. Wilson Uwujaren, in a statement said: “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, 370.00 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 of the amount deposited. The depositor banks, in this instance, are Zenith Bank, FCMB, Wema Bank, Access Bank, First Bank, Skye Bank, Ecobank and Sterling Bank. But while carrying out the assignment, the team was alleged to have found one of the currency boxes filled only with old newspapers rather than 20 bundles of N1000 notes.”
EFCC added that, “A similar case, according to investigation, had been 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 the illicit deal. In a statement, the informant stated that the exercise was designed to last between August 4 and 8, 2014. The 35-year-old, however, stated that she discovered a strange ‘sight’ while opening the third box on the second day of the exercise. It was a discovery that beat her ken. 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. She said she later found out that Eye not only maintained sealed lips over the matter but omitted it from her report.”
On its part, the apex bank, through its Director, Corporate Communications, Ibrahim Mu’azu, gave the following account of the incident. Mu’azu, according to media reports said the scam was unearthed during a routine internal audit of the bank’s cash destruction activities in September 2014. He said the CBN’s Briquetting Panel comprising Senior Bank Staff from various branches, noticed some anomalies at the Ibadan Branch, and immediately reported this to the Bank’s management.
Mu’azu claimed that as soon as the bank’s internal investigations concluded beyond reasonable doubt that some wrongdoing had occurred, the affected members of staff, who are middle-level officers, were, depending on gravity of offence, either summarily dismissed or immediately placed on indefinite suspension on 21 October 2014. They were all handed over to the EFCC for further investigation and prosecution. He added that the CBN had also conducted a nationwide audit of all its 37 branches and found that this was an isolated scheme at Ibadan Branch.
A cursory perusal of the two positions above show that there is a wide disparity between the EFCC and the CBN’s story. Granted, the two institutions are agreed that the scam has been going on unchecked for several years but they differed on how the fraud was detected.
Was the “informant” alluded to by the EFCC, one of the CBN’s officials that partook in its “internal routine audit”? Was it the CBN that sent a petition to the anti-graft body on the issue or was it a staff of CBN playing the part of a whistle-blower? Why did the CBN omit the eight commercial banks cited by the EFCC to have allegedly colluded with the six suspects to perpetrate the crime? Why did the CBN decide to gloss over the staff of eight commercial banks that colluded with its staff to allegedly defraud the country and despoil her economy? Who is this member of the Briquetting Panel from the Osogbo branch that blew the lid on the illicit deal? Why did the CBN not name her in their explanation?
The EFCC and the CBN were also at variance when it came to how the crime was perpetrated. For instance, the EFCC insisted that a “box that was supposed to contain N500 notes to the tune of N5billion was filled with old newspapers.” CBN only admitted that “mutilated higher denomination notes originally meant for destruction were swapped with lower denomination currencies. This practice known as interleafing, basically labels a box with a higher value than its true content.” Is “interleafing” the same thing as “old newspapers” finely cut?
The two institutions say the practice has been going on for several years, implying that more detailed and extensive investigation needs to be carried out to determine the extent and how much has so far been illegally cornered from the nation’s resources but the CBN was quick to add that the recent one under investigation was an “isolated” case at the Ibadan branch.
Aside the six suspects who are staff of the CBN, five staff of First Bank Plc have been reportedly remanded in prison in connection with the case. The EFCC named eight commercial banks whose staff allegedly connived with the suspects to carry out the act. Again the commercial banks’ staff are said to be 16 in all. Where are the others? Why were they not arraigned along with the suspected five First Bank staff?
The EFCC also said that, “Unlike in the past, this fraud could not be swept under the carpet…” According to the apex bank in its website, the current legal framework within which the CBN operates is the CBN Act of 2007 which repealed the CBN Act of 1991 and all its amendments. The Act provides that the CBN shall be a fully autonomous body in the discharge of its functions under the Act and the Banks and Other Financial Institutions (BOFI) Act with the objective of promoting stability and continuity in economic management. In line with this, the Act widened the objects of the CBN to include ensuring monetary and price stability as well as rendering economic advice to the Federal Government. To maintain price stability and curb inflation, the apex banks use different instruments, including currency mop-up. It could be recalled that the CBN recently claimed that it spent $4.7billion out of the nation’s External Reserve to defend the Naira. However, most CBN measures to ensure price stability and curb inflation had been thwarted by corruption in the system. According to the EFCC, “The fraud (under investigation) is partly to blame for the failure of government monetary policy over the years as currency mop-up exercises by the apex bank failed to check the inflationary pressure on the economy.”
One cannot but ask how many of this type of financial malfeasance have been swept under the carpet at CBN and by whom? This is where Mr. President through the anti-graft agencies must step into this issue to ensure that Nigerians are not once again blindfolded by the CBN just like in similar corruption cases in the past. The CBN has not said why it decided to carry out the “internal auditing” that led to the discovery of the fraud. It has not told us how many of its 37 branches carried out destruction of defaced and mutilated bank notes during the period. How much was supposed to have been destroyed aside the N8billion involved in the fraud now isolated to its Ibadan Branch? Who is telling the truth – EFCC or CBN? Are the discordant tunes by the CBN and EFCC another attempt to bury facts and shield economic saboteurs? Nigerians need to know.
Leadership
