Caretaker Finance Minister Ghazi Wazni denied BDL’s claim that it submitted all the documents requested as part of a forensic audit of the central bank’s transactions during the past five years. (Credit: Anwar Amro/AFP)
BEIRUT — Banque du Liban has still failed to provide all the documents required for a forensic audit, and its claims otherwise are “contrary to reality,” caretaker Finance Minister Ghazi Wazni’s office said on Thursday.
The rebuke is the latest in a volley of conflicting back-and-forth reports regarding the status of the forensic audit meant to lay plain whether any fraudulent activity took place in BDL’s transactions from the past five years.
Earlier on Thursday, BDL announced that it had handed over “all state and banks’ accounts” available at the central bank to the Finance Ministry.
But Wazni’s office said the central bank has provided a mere 42 percent of the documents requested by Alvarez & Marsal, the global consulting firm contracted to perform the audit.
“After that we received nothing,” a Finance Ministry spokesperson told L’Orient Today.
When reached for comment about the Finance Ministry’s statement, a spokesperson for the central bank doubled down on BDL’s claim that it provided all the necessary documents.
Alvarez & Marsal could not be reached immediately for comment.
The forensic audit of the central bank seeks to determine whether the funds used in financial transactions during the past five years matched their intended purpose, and whether any fraud or other illicit activity took place in the financial sector.
Alvarez & Marsal’s audit, contracted by Wazni on Sept. 1 of last year, is part of a list of reforms laid out by the international community in order for Lebanon to receive support that will help kick-start a recovery from its worst financial crisis in decades. The crisis has seen unemployment and inflation balloon, while the lira has lost some 85 percent of its value against the US dollar.
By revealing the causes of Lebanon’s ongoing financial collapse, the audit can serve as a building block for the long road of financial recovery.
However, the audit hit a snag last year when BDL Gov. Riad Salameh refused to turn over documents requested by Alvarez & Marsal, citing legal constraints related to the Code of Money and Credit regulating the central bank. Salameh said a banking secrecy law that protected information about commercial bank accounts prevented him from fully cooperating with the audit.
The firm later canceled its contract to audit BDL.
In an interview with the news station Al-Hadath in early December, Salameh said the law would need to be changed for him to provide the documents requested under the audit.
Later that month, Parliament voted in favor of lifting banking secrecy on all accounts available at the central bank and other public institutions accounts for one year — removing the audit’s primary obstacle.
At the beginning of this year, Alvarez & Marsal inquired about renewing its contract, although it has not officially done so.
In February, BDL said it told the Finance Ministry it would cooperate with Alvarez & Marsal in compliance with Parliament’s decision. But the next day, the caretaker finance minister’s press office denied having received any communication to this effect.
Following this latest hitch in the audit’s process, Alvarez & Marsal, the Finance Ministry and Banque du Liban are set to hold talks on Tuesday, BDL and the Finance Ministry said.