Senate discovers N14.7 billion proceeds of defunct PHCN ‘hidden’ in commercial banks

Deji Elumoye in Abuja

The Senate uncovered the N14.7 billion proceeds of the defunct Power Holding Company of Nigeria (PHCN) believed to have been hidden in commercial banks by the Bureau of Public Enterprise (BPE).

Its public accounts committee made the discovery in the 2017 report of the Auditor General of the Federation (AuGF) currently being reviewed by the committee led by Senator Matthew Urhoghide.
The report alleged that the said sum was “hidden” in commercial banks as of December 31, 2016, when the privatization of PHCN was concluded in 2013.

The AuGF had in the report questioned the BPE about the reported hidden account.
The petition read as follows: “The audit verification and reconciliation revealed that the sum of N14,720,396,432.43, from the proceeds of the privatization exercise of Power Holding Company of Nigeria (PHCN), was reported in the Bureau’s trial balance as being in commercial bank accounts as of Dec. 31, 2016.

“While the privatization of Power Holding Company of Nigeria (PHCN) was completed in 2013, the proceeds have not yet been paid into the Privatization Proceeds Accounts of the Central Bank of Nigeria (CBN).
“The question was communicated to the Bureau by reference letter n° OAuGF/RESAD/05/2016/07 dated April 19, 2018 and no response was received.

“Unauthorized funds held in commercial banks can be diverted for other purposes, resulting in loss of revenue available for government programs.

“The Managing Director is required to recover the sum of N14,720,396,432.43 from the PHCN and remit it to the CRF and forward proof of disbursement to my office for audit confirmation.”

But, the Office of Public Enterprises (BPE) in its written response said: “Two separate sums of N3,231,984.73 (allegedly held in Fidelity Bank Plc) and N18,199,520.87 (reported as held in Stanbic Bank Plc) are bank balances unaudited accounts that no longer exist at the date of the audited financial statements or the questions asked, the question would have been clarified.

“As for the other two bank balances, N4.4 billion (Access Bank Plc) and N10.2 billion in FCMB.”
“Access Bank’s correct balance as of 12/31/16 was NIL as the bank transferred an inflated balance of $34.1 million to the CBN domiciliary account.

“The bank was initially unable to complete the transfer in September 2015, as required by TSA policy, due to the non-existence of a designated USD Treasury Single Account for balances in dollars.
“The FCMB Bank balance as of 12/31/2016 was only $36,053.55 following a transfer of $65,088,198.53.

“The residual balance remained until 95/18/17 due to the bank’s inability to make the installments required under the TSA policy due to the initial unavailability of the designated TSA for USD balances, as required by the then newly introduced policy”.

About Ruben V. Albin

Check Also

North Korea moves to prevent regional commercial banks from setting high interest rates

The International Commercial Bank in Rason (Daily NK) North Korea is preventing regional commercial banks …