What are the questions from the criminal audit firm that the Central Bank of Lebanon refused to answer?

Loris Constantine –

Since the Lebanese Minister of Finance signed the contract for the criminal audit of the accounts of the Central Bank of Lebanon with the company “Alvarez & Marsal”, rumors have circulated that the process will not pass and will face obstacles that prevent its completion.

The contract that the presidents of the republic and the government insisted on signing and continuing with the process until the end, and the intention was to expand it to include other state departments, seems to be in the process of being suspended after hitting the obstacle of the monetary law and that governs the work of the Central Bank of Lebanon and the bank secrecy law passed in Lebanon.
Two days ago, the media has been circulating confirmed news that the company in charge of the audit asked more than 100 questions and did not receive a response. Reuters quoted a central bank spokesperson that the bank had subjected all its accounts to audit, but added that “it cannot provide the accounts of its clients, according to the law it is not by choice.” He noted that “it is not surprising” that certain information cannot be disclosed, because the contract signed between the company and the Ministry of Finance is subject to Lebanese law.

The information circulating in Lebanon indicates that submitting the contract to the laws in force in Lebanon was not included in the basic contract that was agreed in the Council of Ministers, and that the amendment was made by the Minister of Finance before signing. , in what was considered a “trap” for the contract, which took about 6 months to execute. Weeks after the cabinet decision.

The Lebanese constitution allows any minister to make the decisions he deems appropriate within the scope of his ministry without going back to the prime minister’s reference or cabinet.
In this context, a Lebanese government authority says that the amendment to the agreement, approved by the Council of Ministers and approved by the Legislation and Consultation Commission of the Lebanese Ministry of Justice, came after the relevant minister (the Minister of Finance , affiliated with the President of Parliament Nabih Berri), will report to the Council. Ministers whose authority does not want to conduct a criminal audit.

What do the questions posed by “Alvarez & Marsal” to the BDL include?
Forbes Middle East obtained a document showing the questions from the auditing company, the responses it received with acceptance and full or partial responses, and the questions that were left unanswered.

The document divides the questions into questions related to forensic auditing, others related to governance and controls, and questions related to information technology infrastructure (and these questions were received by the company all responses from the central bank). As for the questions related to what was called an infrastructure installation request, it was called “Not available”, while the last link refers to nomenclatures, so as not to overlook the node of the bank secrecy law, which prohibits disclosure of accounts and related names to a third party.

The government authority that Forbes Middle East spoke with mentioned that Álvarez & Marsal had previously conducted successful criminal audits in countries that adopt bank secrecy, without these laws being an obstacle to the company’s work. However, what happened to her in Lebanon was caused by Refusing to cooperate and disclose the audit results that may expose all the practices that led to large losses in the central bank budget, which can exceed $ 45 thousand. millions.
According to information obtained by Forbes Middle East, the governor of the Banque du Liban, Riad Salameh, admitted a few days ago that the bank had only provided the auditing company with 43% of the information requested to complete its work.

Will the contract be suspended or frozen?
Lebanese government sources in this regard fully blame the Minister of Finance for not proceeding with the contract for various reasons, the most prominent of which are:
1- Minister Ghazi Wazni hesitated four months before the audit process.
2- The Council of Ministers was empowering the minister to take fully into account the opinion of the Legislation and Consultation Commission and consider it binding for him, but the minister, my weight, took only parts of the opinion of the authority.
3- The text of the agreement that was signed would have resulted in a collision with the legislation contract for not completing the audit process, so why did the minister originally sign a contract knowing in advance that it was not applicable?
4- Minister Wazni was the one who chose “Alvarez & Marsal”, although the value of the contract amounts to two million dollars, while the company “Kroll” requested about 500 thousand dollars for the same mission. Why didn’t the minister stop the contract? Will you suspend it within two months to avoid incurring additional treasury expenses?

Sources hope that the criminal audit will be halted and these plans will not proceed in light of the lack of enthusiasm for Prime Minister-designate Saad Hariri on this matter, as is the case for Speaker of Parliament Nabih Berri.

A list of questions from “Alvarez & Marsal” for Banque du Liban

Below is a list of the questions the company posed to the Central Bank of Lebanon and the responses it received. To see all the questions Press here