THE FINANCIAL REPORTING COUNCIL OF NIGERIA (FRCN) INVESTIGATIVE PANEL SITTING AS A NEGATION OF THE PRINCIPLE OF JUSTICE

30^st March, 2014

THE FINANCIAL REPORTING COUNCIL OF NIGERIA (FRCN) INVESTIGATIVE PANEL SITTING AS A NEGATION OF THE PRINCIPLE OF JUSTICE

Mallam Sanusi Lamido Sanusi (Ex CBN Governor)

Recently on February 21, 2014 to be precise, the Nigerian public space was jolted with the sack from office of the former governor of the Central Bank of Nigeria (CBN) Mallam Sanusi Lamido Sanusi by President Goodluck Jonathan following the recommendations by the Financial Reporting Council of Nigeria (FRCN), which accused the CBN, under his leadership, of financial recklessness.

The recommendations followed the Council’s review of Mr. Sanusi’s response to its report on the audited financial statement of the CBN for the year ended December 2012 and other related issues, which it described as unsatisfactory and ever since a lot of water has passed under the bridge ranging from commendations, condemnations and even a law suit is pending in court on the matter.

However only last week, the public consciousness was aroused once again with advertorials in some national dailies about (FRCN) investigative panel invitations to Mallam Sanusi Lamido Sanusi and others to in their words, answer questions on some aspects of his tenure between 2011 and 2012.

As a firm believer in the much touted doctrine of respect for rule of law and due process which is crucial for the sustenance of societal peace, stability and progress but which has been observed more in speech than in actions by successive governments, it behooves on us as stakeholders in the Nigeria project to try and find out what the Financial Reporting Council of Nigeria (FRCN) stands for and its statutory functions due to the fact that some public commentators have inundated us with the reality that the agency has gone outside its statutory functions as authorized by law?

On 18 May 2011, the Senate passed the Financial Reporting Council of Nigeria Bill, which repealed the Nigerian Accounting Standards Board Act and replaced it with a new set of rules. The Financial Reporting Council Bill was signed into law on 20 July 2011.

The FRCN according to its Act No. 6, 2011 is responsible for, among other things, developing and publishing accounting and financial reporting standards to be observed in the preparation of financial statements of public entities in Nigeria; and for related matters.

 The Council’s main objects, as defined in the FRC Act, are to:

protect investors and other stakeholders interest

give guidance on issues relating to financial reporting and corporate governance to professional, institutional and regulatory bodies in Nigeria

ensure good corporate governance practices in the public and private sectors of the Nigerian economy

ensure accuracy and reliability of financial reports and corporate disclosures, pursuant to the various laws and regulations currently in existence in Nigeria

harmonise activities of relevant professional and regulatory bodies as relating to corporate governance and financial reporting.

promote the highest standards among auditors and other professionals engaged in the financial reporting process.

enhance the credibility of financial reporting; and

improve the quality of accountancy and audit services, actuarial, valuation and corporate governance standards.

From the statutory functions of the council itemized above after our search, one is at a loss as to where the council derived the powers to investigate financial recklessness in a public organization and so we wonder whose interest the council is serving by allowing itself to be used to serve other purpose at the expense of good corporate governance practices in the Nigerian economy and justice?

For the umpteenth time, it is important to emphasize that the major function of the Financial Reporting Council of Nigeria (FRCN) among others is in developing and publishing accounting and financial reporting standards to be observed in the preparation of financial statements of public entities in Nigeria; and for related matters. It is a standard setting and advisory body on observing standards just like ICAN, COREN and other professional standard setting bodies.

Therefore the present assignment being carried out by the Financial Reporting Council of Nigeria (FRCN) in indicting a public entity of financial recklessness is illegal, null and unconstitutional and it is high time Nigerians place public institutions like this under close watch lest they be used to commit illegality as in the present scenario. 

The power to investigate the financial records of public entities at all levels is constitutionally outside the purview of the financial reporting council of Nigeria and so we wonder whose agenda it is being used to prosecute? Definitely not our national interest.

Again, by inviting Mallam Sanusi Lamido Sanusi to appear before its investigative panel to give account of his stewardship when the man in question has already been sacked based on its recommendations is not only unconstitutional and a negation of the principle of justice but is also an attempt to use back door tactics to justify illegality, in other words, it is akin to putting the cart before the horse and we all know the implication.

The illegality and desperation of the FRCN to nail Mallam Sanusi Lamido Sanusi at all cost was even taken further to a ridiculous height when this same agency invited persons who are standing trial in court of competent jurisdiction for abuse of public trust but which it didn’t observe to implicate then if it were a serious body to come and testify at its illegal sitting, oh, what an absurdity and show of shame.

One cannot but commend Mallam Sanusi Lamido Sanusi for taking the courageous and constitutional step of ignoring the illegal invitation by the FRCN investigative panel, otherwise he would have given legitimacy to what is nothing but a charade and a hatchet job by a misguided and an unserious agency of the state which has lost focus of its constitutional duty.

One would therefore like to use this medium to admonish the management of the Financial Reporting Council of Nigeria and its instigators to take heed and retrace their unholy steps because the sine qua non for a peaceful, orderly and good corporate governance practices in the Nigerian economy is justice and whatever we do today or allow ourselves to be manipulated to do against our conscience and constitutional functions becomes history tomorrow and posterity will judge appropriately.

A word is enough for the wise!