Long-awaited auditor report slams governance at Lebanon central bank

Long-awaited auditor report slams governance at Lebanon central bank

A forensic audit of Lebanon’s central bank found evidence that $111mn in “illegitimate commissions” had been paid from one of its accounts — transactions it said “appear” to be related to a scheme at the centre of the probes into its ex-governor in Lebanon and several European countries.

The report from Alvarez & Marsal also described an institution mired in opaque practices, bad governance and lacking adequate risk management measures, with recently departed governor Riad Salameh exerting “largely unscrutinised authority”.

When Lebanon’s economy imploded in 2019, international donors demanded a forensic audit of the Banque du Liban before it would send aid and loans to the crisis-hit country. 

After pushback from the government, the BdL and some political leaders, A&M was tasked by the government in 2021 to conduct a forensic audit of the central bank’s accounts and practices. It did this despite severe delays, constraints and attempts to obfuscate information, the report noted.

The Financial Times has reviewed a copy of the report, which covers the years 2015-2020 and was recently handed to government officials.

Lebanon’s currency has slumped 98 per cent against the dollar amid the four-year economic meltdown, while its banks have imposed punishing haircuts on depositors’ withdrawals, pushing many people into poverty.

Salameh