Lebanon central bank audit pending as firm yet to receive requested info, say sources

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Restructuring consultancy Alvarez & Marsal has yet to receive all the information it has requested to conduct a forensic audit of Lebanon’s central bank, according to three sources familiar with the matter.

The Lebanese government hired the turnaround specialist this year to audit the central bank as the country grapples with a financial meltdown on a scale it has never seen before.

Alvarez & Marsal declined to comment.

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The central bank said this month that it had provided “all the documents and information which Lebanese laws allow.”

Lebanon’s crisis has hammered the local currency, paralyzed banks and prompted a sovereign default. The audit is a key demand of the International Monetary Fund and of foreign donors, with France at the forefront, which have pressed the indebted state to tackle waste and corruption.

A Lebanese official source and two other sources familiar with the matter told Reuters on Wednesday that a team from Alvarez & Marsal, which visited Beirut this month, did not receive all the information it requested from the central bank.

The bank had cited legislation and banking secrecy, said the sources, who all declined to be named due to the sensitivity of the matter.

The sources said Alvarez & Marsal had sent a new set of questions to the central bank. It was not clear if they covered information already requested.

Saad Hariri addresses the media on Aug. 18, 2020. (AP)
Saad Hariri addresses the media on Aug. 18, 2020. (AP)

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A spokesman for Lebanon’s central bank, in response to a Reuters request for comment, said it had provided all its accounts for the audit, but added it “can not provide the accounts of its clients, by law not by choice.”

He added that the contract signed between the company and the finance ministry was subject to Lebanese law, so it was “no surprise” that some information could not be disclosed.

Central Bank Governor Riad Salameh did not respond to a request for comment.

Local broadcasters cited MP Ibrahim Kanaan, head of parliament’s budget and financial affairs commission, as saying on Wednesday that the contract was subject to Lebanese laws including banking secrecy, and that it should be amended. He did not elaborate on how it should be changed.

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