FINANCE MINISTER PETITIONED OVER CBN REVERSAL OF BANKS’ UNIFORM YEAR END

A corporate lawyer, Mr. Roy Bassey Ukoh and a forensic accountant, Mr. Ori Adeyemo, have, in a joint petition forwarded to the Minister of Finance, protested the reversal of the adoption of common year end by commercial banks as earlier directed by the Central Bank of Nigeria.

The two petitioners said they were compelled to write to the Minister in the overall interest of the banking public and asked for the reversal of the cancellation of the uniform accounting year end for banks in Nigeria which, according to them should have started in December 2008.

Describing the earlier directive contained in CBN Circular No. BSD/DIR/CIR/GEN/VOL2/008 issued on August 25, 2008, as laudable, the petitioners insisted the CBN Governor made an unpardonable somersault of his laudable policy of making December 31 of each year, the uniform accounting year end for each bank starting December 31, 2008.

Stating that such change of policy is not in the best interest of the general public but a compromised attempt to serve the parochial interest of the banking cabal, who are the Managing Directors of the 24 banks operating in Nigeria in other to cover their apparent lapses, the petitioners argued that CBN rationalizing the cancellation of the directive to the desperate mobilization of deposits and which led to the hiking of interest rates by banks, according to the two petitioners is not accepted and grossly untenable.

“We consider both excuses given by the CBN Governor as totally unacceptable and crassly untenable. It further goes to confirm our unassailable conviction that the Nigerian banking industry is not only weak, in dire state of distress but also desperately needing surgical operations to survive irrespective of the spurious splendid financial results that these fraudulent banks churn out from time to time (in active collaboration with the CBN) all in order to continually deceive the gullible unsuspecting Nigerians to invest their hard-earned money in the thrash shares of these sinking banks.” The petitioners reasoned.

Making further assertions on the impropriety of the cancellation of the common year end for banks, the petitioners asserted that: “It is a classic endorsement that the consolidation of the banking industry which the CBN carried out on December 31, 2005 has irredeemably failed if after telling Nigerians that it now has mega-banks; these same banks are still in hot pursuit of deposits at whatever costs not also minding the fact that these same banks had gone to the capital market times without number to mobilize funds. The question now is: what has happened to all the billion of Naira mopped up by Nigerians banks from the capital market from year 2004 to date? Nigerians need to know.”

“The CBN Governor has always been aware that Nigerian banks have been defrauding their customers through the passage of spurious and illegal bank charges into the accounts of innocent customers thereby leaving behind unpaid debts leading to the deceitful foreclosures of collaterised assets of the customers or the settlement of bogus debts at extremely high costs. For the unfortunate ones, it has always been a tale of woes leading to the collapse of businesses, ill-health and sometimes paying the ultimate price of untimely death. To worsen matters, whenever a report of the nefarious and illicit actions of the banks is brought to the attention of the CBN; an illegal referral is made by the CBN to the committee of Ethics & Professionalism which is a sub-committee of the Bankers’ Committee made up wholly and exclusively of bankers with nobody protecting the interest of bank customers thereby making banks judges in their own case.” The petitioner further asserted.

Making further allegations, the petitioned observed that: “Another very important point to deliver is the fact that the CBN Governor is in the knowledge that banks have surreptitiously been stealing Federal and State Governments funds through non-remittance of 10% Withholding Tax on declared dividend as well as interest on deposits, 5% Value-Added-Tax (VAT) as well Personal Income Tax yet have blatantly refused to call them to order knowing fully well that by virtue of Section 3.2.5 of the CBN Monetary, Credit, Foreign Trade & Exchange Policy Circular No. 37 of January 02, 2004, it is the responsibility of the CBN to collect these deductions from the banks for and on behalf of the Federal Government of Nigeria within seven days of collection. The various excess and spurious bank charges clandestinely laid into the accounts of both arms of government all in a bid to defraud in billions of Naira cannot also be wished away.”

“As investigative accounting consultants, we are in the knowledge that the books of these Nigerian banks have all along been cooked and spiced accordingly in order to present fake excellent performances. A veritable way of doing this is to aggressively mobilize deposits at the adopted scattered year ends and also to temporarily put a stop to lending when the accounting year end of banks is near.

“The banking cabal has also made it a point to be shifting deposits among themselves in order to help out each other and they are aware that a uniform accounting year-end will put a final stop to this unwholesome malpractice.

Alluding to one of the reasons the common year end would have done the banking industry some good the petitioners observed that: “Nigerians will recall that prior to the announcement of the uniform accounting year end for banks; every bank in Nigeria was always celebrating any achievement that they can think of from the mundane to the unimaginable. At that time, it was commonplace to find banks celebrating best bank with highest deposit base, the first bank to deploy certain banking software in Nigeria, the first bank to hit the trillion Naira asset base, the bank with the highest turnover and all what not. However, we note that with the announcement of the common accounting year-end, all this rubbish has stopped.

“We must not forget the so-called compromised ratings given to banks by the foreign rating agencies based on the falsified financials published, which these banks would then celebrate as if they have won the football world cup. It was either the banks were awarded A+++++ or AAAAA or some stupid figures by their collaborating foreign rating agencies without looking at facts behind the figures published.

“We wholly support this uniform accounting year-end for banks since it will enable Nigerians and the whole world to be able to separate the chaff from the grains but this laudable and well-thought-out policy by the CBN is being killed before it is born and therefore every attempt must be made to stop the unwarranted and self-serving shift or cancellation of the uniform account year-end.”

“It cannot be disputed that the capital market in Nigeria has lost over N3.5 trillion due to depression with the Nigerian banks accounting for over N2 trillion thereof. You will also admit that this was what led the CBN to issue a guideline allowing the banks to reschedule margin accounts by at least one year. We sadly note that even with this understanding, the CBN is yet to fully inform Nigerians as to the extent of the loss incurred by the banks as a result of their participation vide gambling with depositors and investors monies in the capital market.

“Our submission is that with the full implementation of this uniform accounting year-end policy by the CBN; Nigerians will be able to know the healthy banks from unhealthy or dead-woods because as things currently stand, the adopted scattered year-ends gives latitude for fraudulent and creative accounting manipulations, which undoubtedly amounts to corrupt malpractices which the CBN is now advocating and encouraging through the back door.

“It is an understatement to say that if you are allowed to have your way by shifting or out-rightly canceling the uniform accounting year-end of these banks, you would have succeeded in postponing the doomsday, which would eventually come considering the whole lots of unwholesome and unprofessional malpractices being daily perpetuated by these banks unrestrained.

“We cannot but state once again that the financial state of these banks is in sordid state and the earlier that the CBN and the banks come clean to tell Nigerians the truth the better.” The petitioners concluded.

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