CBN uncovers $2.4bn fraudulent FX forwards claims

The Central Bank of Nigeria (CBN) has invited law enforcers to investigate some Foreign exchange forwards claims amounting to $2.4 billion as some stakeholders fault recent apex bank claims that it cleared all backlogs.

Cardoso who disclosed in Abuja while briefing on the outcome of the two days CBN’s Monetary Policy Committee (MPC) meeting said those agitations were baseless, insisting that the CBN has cleared all valid fx obligations relying on the forensic audit report by Deloitte consultants, which it engaged to thoroughly investigate and verify the entire claims.

His words: “On assumption of office last September, we met a backlog of forward transactions which were already contracted before we came in. It was clear to us that it was very important that in the interest of the credibility of the Central Bank, which at that point was very much in question that we were able to satisfy and take care of these forwards.

“And if you recall, during the Senate hearings, I had actually made reference to this, that it would be a priority to ensure that we take care of these forwards within the resource constraints we had and as soon as we could.

“During that period, we settled certain tranche and then got wind of the fact that there were a number of transactions which quite frankly, had some issues with respect to the to their genuineness.

“So we said, the best thing is to get a well reputed organization that can do proper forensic of the transactions. And that was how we came across, and brought in Deloitte management consultants who took time and this really took months, painstaking to go through all the documents, and to ensure that they had a report which we could rely on.

“In the course of that, of course, we determined that a number of these transactions did not qualify. In some cases, you had some allocations that were made in millions of dollars, which were never requested for. You also had some where they had no naira and huge sums of foreign exchange were allocated, and the list goes on.

“And it was for that reason that we refused to validate those particular transactions because apart from the fact that the documentation was not satisfactory, in many cases, they were outright illegal.

“And the law enforcement agencies, of course, are now looking into those transactions that are as far as we are concerned, not valid to be paid.”

The governor, however, emphasized that the CBN will be ready to consider any information to the contrary, but that as at today, “the law enforcement agencies are taking a very, very hard look at those transactions.”

“I’ve said before, I will say it again, that the valid transactions as far as the Central Bank of Nigeria is concerned, have been taken care of.”

He acknowledged some stakeholders who over a period of time may have had backlogs in one form or the other, that may even date back to several years and urged them to access the markets and take care of such.

“There have been several cases, quite frankly, that even from documentation – no form M was available; where allocations were made, and no requests were asked for, or cases where allocations were made, and no Naira was available.”

He further assured that the CBN is painstakingly ensuring that it removes as many of the distortions that prevent the naira rates from price discovery.

According to him, the central bank, is looking to the time in the future when its interventions in the foreign exchange market will be minimal to non existent, but for now, will continue to intervene to ensure that the market is liquid and boisterous enough to meet genuine demands.

Cardoso insists no going back to direct development financing

Cardoso also used the opportunity to clarify that the CBN will not return to direct development finance as recent donations of 2.15 million bags of various blends of fertliser to ministry of agriculture suggests.

“We have been consistent in saying that we will withdraw from direct interventions,

“We have also been consistent in saying that we will work with those who we believe have the capacity to successfully intervene in whatever manner they can and that, by the way, includes even capacity building. It’s not strictly speaking to direct funding or anything like that.

“It just extends to all sorts of different areas. So when we see that capacity is there, the central bank will be happy to partner and that goes similar to the collaboration that we’ve had with regulatory authorities and also law enforcement,” he explained.