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“The Central Bank of Nigeria may face a request to retract its recently released audited annual financial reports, following discoveries of discrepancies and irregularities in its financial accounts by a team investigating the apex bank. These findings emerged after the CBN published its financial accounts for the years 2016 to 2022 in August, amid an ongoing probe of the financial services sector regulator.

President Bola Tinubu had appointed Jim Obazee, former Chief Executive Officer of the Financial Reporting Council of Nigeria, as a Special Investigator on July 28, to investigate the activities of the apex bank during the tenure of its suspended governor, Godwin Emefiele. Apart from the CBN, the Special Investigator is also examining the Nigerian National Petroleum Corporation Limited, Financial Reporting Council, and other Government Business Entities.

In a letter personally signed by the President on July 28, 2023, he stated that this move was part of the government’s ongoing anti-corruption efforts. The letter directed the Special Investigator to investigate the CBN and Related Entities with immediate effect, reporting directly to the President’s office. The President’s directive included strengthening the integrity of key Government Business Entities, preventing financial leakages in the CBN and related entities, and providing a comprehensive report on the current public wealth held by corrupt individuals and establishments, whether in the private or public sector.”

“You are instructed to investigate the CBN and its affiliated entities with a team possessing suitable experience, competence, and capability, collaborating with pertinent security and anti-corruption agencies to execute this task. I anticipate receiving weekly updates on the progress made,” the President directed.

Additionally, the President attached a copy of his directive, issued on June 9, 2023, suspending Godwin Emefiele from his position as Governor of the CBN.

According to information obtained by The PUNCH, the CBN’s Special Investigator is collaborating with a group comprising accountants, auditors, and forensic accountants to carry out the investigation.

In the meantime, there are indications that the CBN may be asked to withdraw its audited financial reports spanning seven years (from 2016 to 2022) due to allegations of containing inaccurate and false data.

Multiple sources familiar with the investigation disclosed that presidential approval would soon be sought to empower the relevant agency, the Financial Reporting Council (FRC), to demand the withdrawal of the contentious financial accounts.

Reliable sources close to the Special Investigator and his team revealed that while the CBN’s financial accounts were not prepared in compliance with the International Financial Reporting Standards 9 (IFRS 9), which mandates full disclosure of all financial transactions, the apex bank purportedly utilized guidelines obtained from the FRC in a controversial manner to prepare these financial accounts.

It has also been learned that the CBN allegedly made a payment of N401.75 million to the IFRS Academy for the guidelines employed in preparing these accounts.

“As a government institution, any revenue received should be deposited into the Treasury Single Account, from which a certain percentage is deducted for the government. According to documents, the N401 million paid by the CBN for the accounting guidelines between 2016 and 2022 was credited to the IFRS Academy’s account. The academy is a limited guarantee company established by the FRC to provide training in IFRS accounting,” alleged a high-ranking official closely linked to the investigation who chose to remain anonymous.

“The concern is that the guidelines used for preparing the CBN’s accounts between 2016 and 2022 were not supposed to be subject to payment. Moreover, any accounting guidelines issued by the FRC should be approved by its board and published on its website. These procedures were not followed. The motive for avoiding IFRS 9 appears to be an attempt to understate figures,” the official added.

Other individuals close to the investigation, speaking with The PUNCH, also contended that it was inappropriate to furnish external organizations with the FRC’s accounting guidelines.

Consequently, it has been revealed that the Special Investigator’s team has incorporated recommendations to seek presidential approval for the Financial Reporting Council (FRC) to instruct the CBN to retract its annual financial reports spanning 2016 to 2022.

“The team has also summoned the auditors responsible for preparing these accounts for interrogation. Some of the data within the CBN’s financial accounts is deemed unreliable by the investigative team. Upon the President’s approval, the CBN will be formally requested to withdraw the accounts and prepare new ones adhering to proper accounting methodologies and standards,” stated another official closely affiliated with the investigative team.

Meanwhile, investigations suggest that the Department of State Services (DSS) may summon the Executive Secretary/Chief Executive Officer of the FRC, Shuaibu Ahmed, and certain high-ranking officials from the agency for questioning. Additionally, the Special Investigator and his team are anticipated to question FRC officials regarding allegations relating to the contentious accounting guidelines employed by the CBN, among other matters.

Furthermore, the DSS has already questioned some deputy governors of the CBN as the investigation progresses.

Moreover, it has been disclosed that more cases related to Godwin Emefiele may surface in court proceedings. President Tinubu, on July 28, instructed the CBN Special Investigator to collaborate with security and anti-corruption agencies to compile a comprehensive report on public wealth in the possession of corrupt individuals and entities, whether in the private or public sector.

Several experts and organizations contend that this investigation is necessary to ascertain whether any infractions or alleged abuse of office occurred during Godwin Emefiele’s tenure as the suspended CBN Governor and by other high-ranking government officials.

Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, stressed the importance of the investigation to uncover any potential infractions or abuses of office. He emphasized that this inquiry is a standard practice in a new administration when there are suspicions about the handling of cases, with the goal of obtaining factual information before taking any action.

Additionally, Professor Sheriffdeen Tella, an economics professor at Olabisi Onabanjo University, expressed support for the investigation, highlighting its importance in assessing transparency, accountability, and adherence to corporate standards.

Economist Professor Bright Eregha, from the School of Management and Social Sciences at Pan-Atlantic University, suggested that the Federal Government might have initiated the probe due to concerns about the CBN’s performance or alignment with its mandate. He noted that the investigation could also extend to other government entities, such as the Nigerian National Petroleum Company Limited, and potentially restore confidence in the system, particularly considering the need for the CBN to maintain its independence.

“We observed the events surrounding his affiliations and actions. Additionally, there’s the matter of the Naira’s redesign. It appears the current government has questioned the CBN’s performance concerning the sanctity of the central bank’s independence. Therefore, they deemed it necessary to initiate several investigations.

“It’s crucial to remember that the CBN has provided significant financial support to various sectors in the past. I believe the current government perceived the need for these investigations as a step towards progress.

“These investigations are not exclusive to the CBN; they encompass other financial institutions as well. I also anticipate they may extend beyond financial institutions to entities such as the NNPC and other areas requiring scrutiny to restore confidence in Nigeria.”

However, Professor Akpan Ekpo, Chairman of the Foundation for Economic Research and Training, expressed concerns that the public audit of the central bank might convey negative signals to potential investors. Nevertheless, he acknowledged that the President likely had valid reasons for initiating the probe.

He commented, “My concern is that making the audit of the central bank so public may send misleading signals to potential investors, particularly foreign investors who might question the stability of our central bank. That’s my perspective.

“But as a President, maybe he possesses information we are not privy to. When you initiate a probe into your central bank, it can convey worrisome signals about the direction of the economy and its future. We’re already facing challenges attracting investors, and our forex reserves are dwindling every day.”

Regarding the choice of the Special Investigator, Ekpo expressed a wish for a completely neutral appointee.

On the matter, Debo Adeniran, Chairman of the Centre for Anti-Corruption and Open Leadership, urged the Special Investigator, Jim Obazee, to examine the monetary policy of the suspended CBN governor and investigate the legality of the Naira note redesign. Adeniran suggested that if it is discovered that the policy implementation had political motives, the former CBN governor should be prosecuted for crimes against humanity.

Adeniran emphasized, “They should investigate how the former CBN governor altered Nigerian monetary policy and the illegality that occurred when he changed the color of the Naira without conducting proper due diligence. We need to assess whether he had valid reasons for altering the Naira’s appearance because fundamentally, the Naira didn’t have an issue. It could have been the monetary policy he implemented that was problematic.

“They should scrutinize the monetary policy he enforced and determine if there were political motivations behind it or the Naira’s color change, done without adhering to due process. If it turns out he played politics with the lives of Nigerians, then he should be held accountable for crimes against humanity.”

Auwal Rafsanjani, Executive Chairman of the Civil Society Legislative Advocacy Centre, pointed out that the appointment highlighted the need for government agencies like the National Assembly to monitor government activities. He called for the prosecution and disqualification from public office of anyone found to have misappropriated public funds.

“We commend efforts to recover looted funds from wrongdoers. Therefore, we urge the administration of Bola Tinubu to ensure that individuals who have engaged in wrongdoing are not only investigated but, if there’s evidence of embezzlement or misappropriation of public funds, they must refund the money and be barred from holding public office. We hope these investigations are conducted without political considerations or cover-ups,” he advised.