Senate uncovers N30trn forex frauds in commercial banks

THE Senate Committee on Customs and Excise, headed by Senator Hope Uzordinma, on Wednesday, said it had uncovered a forex fraud to the tune of over N30 trillion allegedly perpetrated by commercial banks in the country.

Uzordinma, at a meeting with representatives of all the banks, alongside the Central Bank of Nigeria (CBN) and officials of the Ministry of Finance, said the documents were obtained from the Nigerian Customs Service (NCS).

He said the committee uncovered the alleged fraud through the misuse of Form ‘M’ as well as vessel by vessel liabilities of importers.

According to him, all commercial banks in the country were involved in the alleged scam, including those in operation and those which had been acquired by other banks.

The senator said the alleged fraud spanned the period from 2007 to March 2017.

“We have been able to also go into the database of the operating system in the Nigeria Customs Service. We identified ‘Form M’ by ‘Form M’, import by import, vessel by vessel and liabilities of importers and commercial banks that are yet to be handled. We are talking about money in regions of over N30 trillion.

“There is no bank that is exempted. All the banks are involved. Both the banks that are dead and the ones living. The ones that are no more operating were acquired by some banks. So, the activities of those banks that are no longer in operation, we have been able to tie them to those that acquired them as part of the liabilities,” he said.

The committee, therefore, queried all commercial banks in the country on the non-utilisation of foreign exchange and gave them three weeks to respond.

He also said Minister of Finance, Mrs Kemi Adeosun; Minister of Budget and National Planning, Senator  Udoma Udo Udoma; Governor of CBN, Mr Godwin Emefiele, as well as chief executives of commercial banks had been invited to appear before the committee next month.

The senator also accused the banks of foreign exchange manipulation, adding that the foreign exchange given out by the government to commercial banks and importers for the purposes of importation are not being properly utilised.

Uzordinma said the investigation being conducted by the committee was sequel to a motion adopted at the plenary, which mandated it to probe and identify the sources of forex use.

Speaking to newsmen at the end of the meeting with the bank officials, the senator said the committee took its time to enter into relevant documents.

“The committee started investigation and took time to enter into the import and export value chain. It identified supposedly areas of leakages and malpractices, ranging from unutilised Form ‘M’, abandoned Form ‘M’,  partially utilised Form ‘M’, abandoned assessments of Custom duties and foreign exchange allocation manipulation.

“We have been able to give all these information to the various banks who purchased foreign exchange on behalf of the importers to show us evidence of utilisation of the forex, failure of which they will be compelled to refund those foreign exchange bought from Central Bank or inter-bank, purposely to be used for import.

“What we are saying in essence is that the amount of foreign exchange government is giving out to commercial banks and importers for the purpose of importation are not being utilised as agreed.

“So, we don’t see this as a healthy development because, in the process, some Asian companies are now round-tripping, sending monies that they don’t deserve out of this country without due process,” he stated.

This, he said, was responsible for difficulty in forex deal and fall in the value of the naira, adding that by the time the panel concluded its investigation and action plans, the issue of forex scarcity would drastically reduce.

“I can tell you that the exchange rate will come down drastically because only genuine importers will now enjoy government forex allocation,” he said.

On why his committee picked on banks alone without reference to importers, the senator said “the Foreign Exchange Utilisation Manual prepared by the Central Bank as a regulation guiding import and export has entrusted commercial banks this quantum of responsibilities, because they are purchasing this money on behalf of the importers.

“So, once you are acting on behalf of somebody, the offence or the inaction of that person is your own inaction. We are now calling the banks because they are supposed to be the gateway for us to enter into the stream.

“It is the responsibility of the banks to know, ascertain and confirm that the documents sent as bill for collection that will warrant the release of the forex to the exporters are genuine,” he said.