An audit of the Central Bank of Lebanon’s accounts has led to actions being taken to mitigate the financial risks arising from “misconduct.” The audit indicates that the former Central Bank governor wielded “boundless” authority, while employing costly financial engineering policies.
Conducted by Alvarez & Marsal, the audit revealed that “illegal commissions” amounting to $111 million were paid from a Central Bank account between 2015 and 2020. This seemingly perpetuates a plan that prompted investigations into the former bank governor, Riad Salameh, domestically and internationally.
Donor nations had demanded a forensic audit after Lebanon experienced a financial collapse, preventing most depositors from accessing their savings since 2019. This resulted in the currency losing 98% of its value and exacerbated poverty.
The audit, of which Reuters gained access to a copy, covers the period between 2015 and 2020.
Salameh, who left his post last month, defended the policies in written statements to Reuters. The central bank’s media office informed Reuters that the “relevant parties are no longer at the bank.” Fares Al Gemayel, media advisor to Prime Minister in the caretaker government, Najib Mikati, declined to comment, stating the report was “confidential.”
Salameh, who left his position at the end of his last term on July 31, denies accusations of misusing his powers to embezzle public funds in Lebanon. France and Germany issued arrest warrants for Salameh.
On Thursday, the United States, United Kingdom, and Canada announced sanctions against Salameh, accusing him of corruption for personal enrichment, along with his associates.
Alvarez & Marsal highlighted the “absence of good governance in general and risk management arrangements” at the central bank. They called for enhanced oversight to “mitigate any further financial risks arising from misconduct at the Central Bank of Lebanon.”
In written statements to Reuters, Salameh described the characterization of misconduct as “arbitrary,” adding that the central bank acted in accordance with the law.