Lebanon gets more time to meet audit demand by creditors

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Lebanon has three more months to provide data for a forensic audit of the central bank after failing to meet a November 3 deadline, Finance Minister Ghazi Wazni said Thursday.

The International Monetary Fund and France are among creditors demanding the audit as part of urgent reforms to unlock desperately needed financial support.

“The deadline set for submitting documents required for the financial audit has been extended by three months,” the minister said after meeting with a representative of Alvarez & Marsal, the New York-based firm carrying out the audit.

President Michel Aoun and central bank governor Riad Salameh also attended the meeting with James Daniell, A&M’s regional managing director, the state-run National News Agency reported.

Aoun said it was “necessary for the government to commit to the forensic audit”, calling it an integral part of “necessary reforms”.

A&M began its audit in September and set November 3 as the deadline for the central bank to provide it with all information necessary to complete its work, a finance ministry source said.

But the central bank has handed over less than half of the documents needed to proceed with the audit.

It says provisions of the Code of Money and Credit and the Banking Secrecy Law bar it from releasing the rest.

On Tuesday, Lebanon’s caretaker prime minister Hassan Diab urged the central bank to hand over the remaining documents, arguing the Banking Secrecy Law does not apply to state accounts.

The central bank said in a statement on Wednesday that it had submitted its own accounts for audit.

But it insisted that legally only the government could submit state accounts.

Diab’s government has repeatedly accused central bank chief Riad Salameh of being responsible for Lebanon’s worst economic crisis in decades, notably through his failure to stem the collapse of the Lebanese pound.

Critics from across the political spectrum have charged that Salameh’s financial policies led to Lebanon’s ballooning sovereign debt and its first default in March this year.

Salameh has defended himself, saying that the central bank “has funded the state, but did not spend the money”.

France 24

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