Forensic Audit: التدقيق الجنائي; Discussions and Updates. Thank You GMA for insisting!!!

Do you support GMA: BDL Forensic Audit is key to identify and fix corruption and the economy?


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Joe tayyar

Joe tayyar

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Eh and one thing I forgot to add in the above post, baddoun you2afo bil saf ybousoulo tizo wij w 2afa la Michael Aoun!
 
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    UPDATE 2-Lebanon to hire Alvarez & Marsal to audit central bank amid crisis


    BEIRUT, July 21 (Reuters) - Lebanon’s government agreed on Tuesday to hire turnaround specialist Alvarez & Marsal to conduct a forensic audit of the central bank as it grapples with a financial meltdown.

    Prime Minister Hassan Diab told cabinet the audit would “represent a drastic transformation on the path to uncovering what happened at the financial level in terms of waste and theft”.

    Ministers also agreed on KPMG and Oliver Wyman for a financial audit, the presidential palace said after the cabinet met there.

    Lebanon needs foreign aid badly to claw its way out of a financial crisis that has slashed the value of its currency since late last year. Banks have shut savers out of their dollar deposits as already critical foreign reserves dwindle and the greenback grows ever more scarce.


    Talks with the IMF have been bogged down by a row over the scale of financial losses that have embroiled the government, the central bank, commercial banks and MPs from the dominant political parties.

    Foreign donors who once helped Lebanon have made it clear that any more help hinges on Beirut enacting reforms.

    “Among the measures that need to be taken..., we are thinking of a complete and transparent audit of the Lebanese central bank, which is a necessity to establish the debt and losses of Lebanon and to build a reform plan for the real needs of Lebanon,” a European diplomat told Reuters.

    After the state defaulted on its hefty foreign currency debt and launched restructuring talks with creditors in March, Diab said there would be an audit of central bank accounts in a bid to show transparency.


    In an attack on central bank governor Riad Salameh’s performance in April, Diab cast him as responsible for the currency crash, mounting losses in the banking sector and lack of transparency.

    Salameh defended the central bank’s practices and said it did not hide information. He has deflected the blame back towards successive Lebanese governments
    for failing to launch reforms or sort out public finances. (Reporting by Ellen Francis in Beirut and John Irish in Paris; Editing by Nick Macfie/Mark Heinrich)
     
    V

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    No, the worst case is not discovering anything or anybody and clearing them
    Let's face it, they are getting paid $2.3m to find out how the money went missing. If they can't do it they shouldn't get paid.
    There are two possibilities: The money got stolen or someone gambled with it. Either way it's a crime and more than one will be held responsible.
    Political crooks including Presidents and Prime Ministers have been jailed even in third world countries. I'm confident Lebanon will follow suit with the support of its suffering people. The more we suffer now the better the chances to nail even the so called “untouchables”
     
    Danny Z

    Danny Z

    Legendary Member
    Let's face it, they are getting paid $2.3m to find out how the money went missing. If they can't do it they shouldn't get paid.
    There are two possibilities: The money got stolen or someone gambled with it. Either way it's a crime and more than one will be held responsible.
    Political crooks including Presidents and Prime Ministers have been jailed even in third world countries. I'm confident Lebanon will follow suit with the support of its suffering people. The more we suffer now the better the chances to nail even the so called “untouchables”
    It doesn’t take a genius to know that Salameh should at least be fired for his failed policy, i am not saying be accused of wrong doing and maybe he should, but the minimum you change the guy because he didn’t do a good job. Yet they’re keeping him around, just like they’re keeping themselves around.
     
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    It doesn’t take a genius to know that Salameh should at least be fired for his failed policy, i am not saying be accused of wrong doing and maybe he should, but the minimum you change the guy because he didn’t do a good job. Yet they’re keeping him around, just like they’re keeping themselves around.
    I think Salameh’s post not the person is the most important link for the network to function. He’s the Bank’s security guard who opened the back door for the thieves who gave him a tip on their way out with the lootings. Salameh had no choice but to do what they wanted him to do or quit. It must have been hard decision but very tempting since they were powerful enough to protect him or to destroying him.

    I think if it wasn’t Salameh, it would have been any other guy not that I’m defending him…

    But what’s stunning to me the arrogance of those who are still threatening and defending him publicly like Rai and Hariri. They can defend him in private and try to make a deal for him since he’s got their monies and their secrets but insisting on insulting our intelligence publicly is a little too much.
     
    Muki

    Muki

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    It doesn’t take a genius to know that Salameh should at least be fired for his failed policy, i am not saying be accused of wrong doing and maybe he should, but the minimum you change the guy because he didn’t do a good job. Yet they’re keeping him around, just like they’re keeping themselves around.
    Salameh will turn out to be the fall guy.
     
    Danny Z

    Danny Z

    Legendary Member
    They should give him immunity to tell the story as it is but then again, look at what happened to Jeffrey Epstein. Hard to know Prince Andrews secret and live long.
    Can’t envy Ghislaine Maxwell situation either…
    Prince Andrew is the go get guy for the media as his fall is useless... the big guns will never be known
    about salemeh i am merely suggesting to fire him, let alone try him, yet none of this is happening. what is his job now and how can anybody still trust him with doing a good job?
     
    Iron Maiden

    Iron Maiden

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    Is the company assigned reputable? Twitter has lots of people claiming it is not...
    wont we find dirt on every big auditing firm if we dig enough through their past?

    as long as they can show us the dreadful theft that was being done through majles el e3mar and majles el janoub and majles el 2ighatha w sandou2 el mohajarin i’ll gladly call it a success
     
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    Lebanon central bank chief in spotlight over $6bn boost to assets

    Lebanon’s central bank

    Lebanon’s central bank. Analysts say it is highly unusual that the governor’s judgment should be used to determine an asset’s value © Aziz Taher/Reuters

    Leaked documents add to concerns Riad Salame relied on shifting accounting practices

    Lebanon’s central bank chief arbitrarily boosted the institution’s assets by at least $6bn using unorthodox accounting measures as the country’s financial system careered towards collapse, leaked financial statements indicate.

    The 2018 audited statements, a copy of which was seen by the Financial Times, reinforce concerns that Riad Salame, the veteran Central Bank of Lebanon (BdL) governor, relied on shifting accounting practices to swell the bank’s assets and balance its books as risky liabilities grew.

    The accounts, which were signed off by auditors EY and Deloitte with qualifications on June 30 this year and have not been made public, record an asset worth L£10tn ($6bn) for “seigniorage on financial stability”, whose value “the governor determines . . . as deemed appropriate by him”, according to the financial statements.


    Riad Salame, BdL governor

    Riad Salame, BdL governor, says the bank has not done anything that is ‘not agreed on internationally’ © Mohamed Azakir/Reuters

    Graffiti in Beirut depict the central bank governor with the slogan ‘down with the rule of the bank’,

    Graffiti in Beirut depict the central bank governor with the slogan ‘down with the rule of the bank’, following anti-government protests last month © Joseph Eid/AFP/Getty

    But two independent central banking experts said they had never heard of such an accounting measure and raised concerns that seigniorage — which typically refers to profits made when a bank prints money — might be being erroneously used to obscure losses.

    “This is too bizarre for words,” said Willem Buiter, former Citigroup global chief economist, academic and central banking specialist. “It is just a way of accounting to artificially blow up the assets of the central bank and hide [its] massively negative net worth or capital.” He added: “Many of the assets are inventions.”

    Joerg Bibow, an economics professor at Skidmore College, New York, said it was highly unusual that the governor’s judgment should be used to determine an asset’s value, as they are normally defined by standardised accounting rules. “I’ve never heard that the governor can make up a number,” he said.

    The BdL did not respond to requests for comment. Deloitte declined to comment and EY did not respond to requests for comment.

    For decades, Mr Salame, the BdL’s longest-serving governor with 27 years in the post, has been credited with steadying the country’s finances during the violent conflicts that wracked Lebanon and the surrounding region and in spite of successive Lebanese governments failing to enact reforms.


    Riad Salame, BdL governor, says the bank has not done anything that is ‘not agreed on internationally’ © Mohamed Azakir/Reuters

    Graffiti in Beirut depict the central bank governor with the slogan ‘down with the rule of the bank’, following anti-government protests last month © Joseph Eid/AFP/Getty
    But now he faces some of the blame for Lebanon’s worst economic crisis since its civil war ended 30 years ago. A currency collapse is wiping out savings and fuelling runaway price rises, while unemployment has soared and living standards have slumped. According to the Lebanese government, the BdL holds losses of $50bn.

    Seigniorage profits are usually accounted for as an income stream, said Mr Bibow. However, the BdL took a different approach, recording expected profits from seigniorage as an asset.

    In April, the BdL defended its use of future profits as assets, saying it “does not consider these amounts as losses”. But Hicham Safieddine, lecturer at King’s College London and author of a book about Lebanon’s financial sector, argued that “using projected future profits to balance [BdL accounts] . . . is misleading”.

    Since 2009, even the BdL’s unorthodox definition of seigniorage has gone beyond the conventional connotation of currency production, to add L£18tn in expected future profits from its holdings of Lebanese government debt, and finally in 2018 including an expected profit generated by “financial stability” as valued by the governor.

    Added to that highly unusual version of seignorage accounting is another contentious item on the BdL’s $150bn balance sheet: ‘other assets’, which have sparked controversy and raised concerns about transparency.


    1595397633085.png

    The “other assets” value has almost quadrupled since 2018 — from $10bn to $38.6bn in June 2020, according to Blom Bank research. They now outweigh the BdL’s foreign assets, which have dropped to $30bn, but offset growing liabilities.

    The BdL’s interim balance sheet says “other assets” includes seigniorage, allowing it to book more assets, the 2018 financial statements show.

    It is unclear what else “other assets” includes, besides seigniorage and “open market operations” — the BdL’s trading of currency and government debt — which is “causing more suspicion that the books are cooked”, said Mr Safieddine.

    “Other assets” have grown as on the other side of the balance sheet, the BdL’s debts swelled as Mr Salame turned to an unconventional monetary policy he dubbed “financial engineering” to boost reserves, steady the banking sector, maintain the currency peg and fund the government.

    Starting in 2016, the opaque and complex swaps between commercial banks and the BdL, which involved dollar deposits, loans in Lebanese pounds and sovereign debt purchases, have been labelled by critics as akin to a “Ponzi scheme”. The government’s economic recovery plan says Lebanon’s banking system is insolvent.

    Mr Salame has defended the BdL’s accounting practices, saying in a speech in May: “We had to have the financial engineering to get time so that Lebanon does not collapse” and that “we didn’t do anything that’s not agreed on internationally”.

    The 2018 financial statements suggest how far financial engineering operations were deepening the BdL’s debts as Lebanon’s economic situation started to deteriorate.

    The BdL’s high interest debts to banks and financial institutions leapt by about 25 per cent during 2018, from L£161tn in 2017 to L£201tn in 2018. Two Lebanese economists familiar with the BdL’s finances said the growing liabilities were most likely the result of expanding financial engineering. The people asked not to be named because they work for organisations involved with the central bank.

    The financial engineering involved paying very high interest rates to attract dollars, with one such deal earning banks as much as 17 per cent interest, according to the IMF. That sucked in deposits totalling $24bn between autumn 2017 and February 2019, according to IMF data — equivalent to more than a third of Lebanon’s $56.4bn gross domestic product in 2018. It boosted the BdL’s foreign currency reserves and triggered big profits for often struggling local banks.

    The 2018 statements reveal that the BdL’s relationships with the banks went beyond financial engineering, encompassing multimillion-dollar real estate and asset-backed debt deals.

    Last year, the IMF warned Lebanon that the BdL’s unconventional measures to keep dollars flowing were becoming ever more risky and expensive. Even though commercial banks had locked up more than half their assets in its vaults, the BdL’s efforts to maintain foreign exchange reserves were flagging. It lost about $4bn of hard currency reserves in 2018, the IMF said.

    “The BdL has been the linchpin of financial stability,” the IMF said in its assessment of Lebanon’s economic health published in October 2019, “but at the cost of intensifying sovereign-bank linkages, which pose risks to banking sector stability, and weighing down its balance sheet while protecting banks’ profitability”.
     
    Last edited:
    Nonan

    Nonan

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    wont we find dirt on every big auditing firm if we dig enough through their past?

    as long as they can show us the dreadful theft that was being done through majles el e3mar and majles el janoub and majles el 2ighatha w sandou2 el mohajarin i’ll gladly call it a success
    A&M is not an audit firm, it is a restructuring/ turn around firm like Alix Partners. They wouldn’t have been my obvious choice. The big 4 (E&Y, KPMG, PwC and DT) for instance have forensic accounting and financial crimes units. Similarly surprised to see OW chosen for the audit. In any case these firms typically have very strict internal control and client risk processes. If they accepted the assignment it means they think they can conduct them with a decent level of rigor and accuracy. Their reputation is worth way more than 2 to 3 million $.
    I honestly would have loved to see the client acceptance process they went through.
     
    dyyyy

    dyyyy

    Well-Known Member
    wont we find dirt on every big auditing firm if we dig enough through their past?

    as long as they can show us the dreadful theft that was being done through majles el e3mar and majles el janoub and majles el 2ighatha w sandou2 el mohajarin i’ll gladly call it a success
    And that's one more....


    I think your right you can always find dirt on any company, the only thing i find suspicious honestly is that the finance minister accepted it, and Berri doesn't really seem to fight against it. (ok his ministers and HA didn't vote for it, but nothing noticeable for something this big)
     
    Iron Maiden

    Iron Maiden

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    A&M is not an audit firm, it is a restructuring/ turn around firm like Alix Partners. They wouldn’t have been my obvious choice. The big 4 (E&Y, KPMG, PwC and DT) for instance have forensic accounting and financial crimes units. Similarly surprised to see OW chosen for the audit. In any case these firms typically have very strict internal control and client risk processes. If they accepted the assignment it means they think they can conduct them with a decent level of rigor and accuracy. Their reputation is worth way more than 2 to 3 million $.
    I honestly would have loved to see the client acceptance process they went through.
    @dyyyy check nonan’s reply here, i am no expert on the domain but what he said makes sense.
    on the plus side i think it was a good idea to separate the audits onto different firms
    And that's one more....


    I think your right you can always find dirt on any company, the only thing i find suspicious honestly is that the finance minister accepted it, and Berri doesn't really seem to fight against it. (ok his ministers and HA didn't vote for it, but nothing noticeable for something this big)
    i will be monitoring the panic and the barking of the dogs of the mafia, the more sound they make the better i will sleep
     
    SeaAb

    SeaAb

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    Multiple governments passed the electricity plan years ago and we know how that went. Being the ultimate pessimist that i am, khaleene rayye7kon, sebbo GMA and FPM min hala2 w bala ma tentro l 3ar2ale from the mafia. #Ratesh
     
    Dark Angel

    Dark Angel

    Legendary Member
    And that's one more....


    I think your right you can always find dirt on any company, the only thing i find suspicious honestly is that the finance minister accepted it, and Berri doesn't really seem to fight against it. (ok his ministers and HA didn't vote for it, but nothing noticeable for something this big)
    what zbib is saying is definitely not true. this rumor is circulating far and wide on social media. i am surprised however that zbib himself would be contributing to circulating it, he should know better.

    A&M has a disputes and investigations department that carries out forensic auditing.


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    Frisbeetarian

    Frisbeetarian

    Legendary Member
    what zbib is saying is definitely not true. this rumor is circulating far and wide on social media. i am surprised however that zbib himself would be contributing to circulating it, he should know better.

    A&M has a disputes and investigations department that carries out forensic auditing.


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    He said that they're not specialized in the matter. Which seems to be true given that all you could find was screenshots off of their site, 3ish ma3 description kamen.
     
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