Where is the Alvarez & Marsal forensic financial audit of Lebanon Central Bank?

LBC reported last December that Alvarez & Marsal promised to submit its financial audit report of Lebanon Central Bank

Here is what LBC wrote on December7, 22

Alvarez & Marsal has yet to release any official report or communicate with the Finance Ministry about the forensic financial audit it carried out at the Banque du Liban (BDL).

However, sources in the ministry confirmed that the company is still working on putting up the initial report, and members continue to frequently visit their office in the Finance Ministry to review some of the data provided by BDL.

Furthermore, the company had assured Finance Minister Youssef Khalil that he would receive the initial report before the end of this year, noting that it was scheduled for delivery on September 27, especially since the company had begun its work on June 27. 

The Finance Minister will examine this report with a specialist team to determine whether any errors have been found in the accounts through the data included.

This initial report will also address BDL work between 2015 and 2021. Alvarez & Marsal will, however, be paid the remaining 10% of the contract’s overall value, or $2,700,000, when it submits its report.

No information has been leaked regarding what Alvarez & Marsal discovered in BDL up to this time. Still, sources monitoring the situation have noted that the report may not reveal any bank fraud.
Thus, it is not expected that the Alvarez & Marsal report will be different from the reports of the accounting and financial auditing firms.

However, interested actors have called to wait and avoid speculating on this matter, especially since this preliminary report will only touch on a portion of the issue.

The concerned government authorities would ask the company to resume operations and clarify more information if any gaps were reported in BDL work.

Nothing since has been heard about the report

About A&M

The International Monetary Fund and France are among creditors that demanded an audit of Lebanon’s central bank as part of urgent reforms to unlock financial support, as the country faces a grinding economic crisis.

As allegations of mismanagement and corruption began to mount at the central bank, the Lebanese government commissioned consulting firm Alvarez & Marsal (A&M) to conduct a forensic audit in September 2020.

The audit was plagued by delays and setbacks, amid political disputes and a lack of compliance by the central bank, which cited banking secrecy.

Speaker Nabih Berri reportedly was against conducting the forensic audit and since the ministry of finance is headed by an Amal minister Berri was able to prevent A&M from conducting its audit

A&M quit a month after the initial agreement, and In September 2021, was commissioned again by caretaker finance minister Youssef Khalil.

The company was supposed to hand over a preliminary report in September 2022, but it has yet to appear.

The forensic audit was “supposed to scrutinise the financial transactions with regard to the law, to shed light on how and why depositors’ funds were lost”, said Sibylle Rizk, director of public policies at advocacy group Kulluna Irada.

“The question is will Minister of Finance finally make the report public ? Sami Haddad , a Lebanese analyst told Ya Libnan

He added : “I am 100 % sure Berri will never allow minister Youssef Khalil to make the report public and the whole world knows exactly why ”

Sources, LBC , National , YL