Forensic audit exposes fraud, procedural abuse in NEXIM Bank

More details have emerged concerning why a faceless group, Awareness for Good Governance Group, called for the removal of Dr. Okwu Joseph Nnanna as the Chairman of the Nigerian Export-Import Bank over allegations of fraud in the Bank.

Investigation revealed that the call for Nnanna’s removal might not be unconnected with the forensic audit commissioned by the new Board, which exposed different levels of procedural abuse fraught with high level of fraud in the disbursement of the loans by the former management.

Findings from sources within the Bank and those close to the audit firm, Price Waterhouse and Coopers, indicated that there were several violations of laid down procedures, which increased the risk burden of the bank to the extent that non-performing loans of NEXIM rose to about 91 per cent of loans granted by the bank.

According to the source,  prior to Nnanna’s assumption of office as chairman in March 2018, the NPL of the bank stood at about N48.9 billion out of a total loan portfolio of N53 billion, which negated the corporate pursuit of the bank to have NPLs at a maximum level of 10 per cent.

The sources, who alleged wrongdoings by a former Company Secretary of NEXIM, further revealed that about 181 out of 191 loans granted before the assumption of the Nnanna board were non-performing, adding that as many as a third of the documents also did not have supporting or verifiable documents to justify the loan applications and subsequent disbursements.

“That level of fraud within the system is perhaps why the Central Bank of Nigeria is yet to activate the N500 billion Export Stimulation Fund, which was set up to promote non-oil exports in Nigeria,” the source said.

While the source revealed that the Management of NEXIM will brief the media on the situation on May 6, 2019, a statement issued by the bank on May 2, 2019 dismissed the allegations by the AGGG, describing them as misleading and targeted at tarnishing “the reputation of Dr. Nnanna as well as diverting attention from the ongoing efforts by the board to address cases of gross mismanagement and poor state of affairs of the Bank under the old management, which had since been sacked by the government of President Muhammadu Buhari.”