Lebanon’s central bank governor Riad Salameh on Friday responded to accusations that he had inflated his institution’s assets by $6 billion in 2018, saying that the measures he took were “not meant to make its financial position seem stronger or to conceal losses.”
His actions, he said, were “in line with accounting policies approved by its board of directors”.
Mr Salameh’s response was published on the website of Lebanese television network LBCI a day after Reuters published a report claiming that Mr Salameh had balanced his books while helping to fund an ever-widening government deficit by recording a 10.27 trillion Lebanese pound ($6.82 bn / Dh25 bn) asset described as "seigniorage on financial stability".
The Financial Times broke the story on Tuesday, describing Mr Salameh's move as an "unorthodox accounting measure" to "swell the bank's assets and balance its books as risky liabilities grew".
The accounts were signed off with qualifications by EY and Deloitte last month and have not been made public, both Reuters and the FT reported.
Most central banks record seigniorage, usually defined as a profit made from printing money, as an income stream.
But Lebanon's central bank was recording expected seigniorage profits as an asset, according to the annual financial statement for 2018, prepared by the central bank and reviewed by EY and Deloitte.
"The item that deals with seigniorage is total fiction," Steve Hanke, Professor of Applied Economics at the Johns Hopkins University, told Reuters.
Two independent experts told the FT that they had never heard of such an accounting measure and said that the accounting measure “might be being erroneously used to obscure losses”.
Neither the BDL, Deloitte or EY responded to either publication.
Explaining why they were signing off on the accounts with qualifications, EY and Deloitte listed a number of factors including being unable to confirm all deposit balances and being unable to conduct an in-person inventory of the bank's gold reserves, Reuters reported.
In addition, Deloitte and EY said the central bank used an accounting and financial reporting framework adopted by its own council, rather than International Financial Reporting Standards (IFRS). They said their own audit was conducted in accordance with International Standards on Auditing.
The most recent central bank data show it had assets of $152 billion last month. According to research by Credit Libanais, that included "other assets" valued at $48.2 billion in mid-June, 61 per cent higher than a year before, a rise the investment bank attributed to seigniorage, open market operations and an appreciation in gold reserves.
The 2018 statements showed the central bank held gold worth 10.61 trillion pounds, although the auditors said they were unable to perform a physical inventory due to a "policy which gives access exclusivity to top executives of the bank".
Asked about the 2018 report, Alain Bifani, the second member of Lebanon's IMF team to quit last month, after 20 years as director general at the finance ministry, said auditors had not carried out a physical inspection of the central bank's gold reserves for years.
"As far as I know in the last 30 years they haven't been allowed to do an inventory of the gold reserves," he said.
"The most glaring thing is how they're hiding the losses. He is trying to inflate his assets as much as possible."
In his statement on Friday, Mr Salameh said that “many central banks resort to delaying costs to achieve their goals” and that for the past 15 years, the BDL had been operating under “exceptional circumstances”.
The BDL did not elaborate on these circumstances. In 2011, the Syrian civil war disrupted the Lebanese economy and caused the inflow of over 1 million refugees.
Mr Salameh also said that the central bank had to financially support the government which was “under pressure from increases in the wages of employees of the public sector and the economic consequences of the influx of Syrian refugees since 2011”.
Once revered as one of the best central bank governors in the world, Mr Salameh, who has held his job since 1993, has been the object of public anger since Lebanon’s economic meltdown began last summer.
In April, Mr Salameh gave a rare televised speech to defend his record after being publicly accused by Prime Minister Hassan Diab of failing to take action to stop the crisis.
He complained that there was a co-ordinated campaign against him, arguing that the bank’s role was to finance the state but that ultimately, politicians controlled how it was spent. The bank’s “accounting systems are not hidden from anyone,” he said at the time.
On Tuesday, the government agreed 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”.
What is a black hole?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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KILLING OF QASSEM SULEIMANI
BRAZIL SQUAD
Alisson (Liverpool), Daniel Fuzato (Roma), Ederson (Man City); Alex Sandro (Juventus), Danilo (Juventus), Eder Militao (Real Madrid), Emerson (Real Betis), Felipe (Atletico Madrid), Marquinhos (PSG), Renan Lodi (Atletico Madrid), Thiago Silva (PSG); Arthur (Barcelona), Casemiro (Real Madrid), Douglas Luiz (Aston Villa), Fabinho (Liverpool), Lucas Paqueta (AC Milan), Philippe Coutinho (Bayern Munich); David Neres (Ajax), Gabriel Jesus (Man City), Richarlison (Everton), Roberto Firmino (Liverpool), Rodrygo (Real Madrid), Willian (Chelsea).
Ammar 808:
Maghreb United
Sofyann Ben Youssef
Glitterbeat
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Bareilly Ki Barfi
Directed by: Ashwiny Iyer Tiwari
Starring: Kriti Sanon, Ayushmann Khurrana, Rajkummar Rao
Three and a half stars
Tori Amos
Native Invader
Decca
UAE currency: the story behind the money in your pockets
Company%C2%A0profile
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Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Three-day coronation
Royal purification
The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.
The crown
Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.
The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.
The audience
On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.
The procession
The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.
Meet the people
On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
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THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
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Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Test squad: Azhar Ali (captain), Abid Ali, Asad Shafiq, Babar Azam, Haris Sohail, Imam-ul-Haq, Imran Khan, Iftikhar Ahmed, Kashif Bhatti, Mohammad Abbas, Mohammad Rizwan(wicketkeeper), Musa Khan, Naseem Shah, Shaheen Afridi, Shan Masood, Yasir Shah
Twenty20 squad: Babar Azam (captain), Asif Ali, Fakhar Zaman, Haris Sohail, Iftikhar Ahmed, Imad Wasim, Imam-ul-Haq, Khushdil Shah, Mohammad Amir, Mohammad Hasnain, Mohammad Irfan, Mohammad Rizwan (wicketkeeper), Musa Khan, Shadab Khan, Usman Qadir, Wahab Riaz
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Honeymoonish
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How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
Brief scores:
Barcelona 3
Pique 38', Messi 51 (pen), Suarez 82'
Rayo Vallecano 1
De Tomas Gomez 24'
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