Nine days have passed since the supposed date for publishing the fortnightly budget, which the Banque du Liban used to disclose in the middle and beginning of each month, without the bank having published this budget until now. And on the official website of the Banque du Liban, the budget that was published at the end of July is still the same, in the absence of any update to the data that was announced on the site since that time.
More clearly: Since Riad Salameh left office at the beginning of this month, this semi-monthly budget has not been published, despite the passage of its date last week, which gives this step a special symbolism in terms of the current directions of the Central Council of the Bank. Noting that the bank has not previously missed the due date or date for updating the semi-monthly budget, since its publication on the bank’s website.
Distorted budget
To be honest, what the Central Bank used to call the “fortnightly budget” throughout Riad Salameh’s term does not really deserve this designation, because this financial statement does not meet the simplest conditions and rules for preparing the budget.
What one could need of meaningful numbers in this statement, which does not exceed half a page in size, are only a few items: the value of gold that is updated according to the price of an ounce in the global markets, and the volume of assets in foreign currencies that indicate the value of reserves after writing off The value of its Eurobonds, and the volume of paper liquidity in the markets in pounds outside the Banque du Liban.
As for tracking the rest of the items, it often refers to unfamiliar accounting rules, or “forgery” operations, as described by judicial investigations in Lebanon and Europe, which were adopted by Riad Salameh in the past, without these items giving any idea about the real financial position of the bank. As a result, all that is required of these accounting maneuvers, which the forensic and accounting audit reports ridiculed, is to reach a balance between the volume of liabilities and capital with the volume of assets, without the numbers reflecting another meaningful result or financial meaning.
Take, for example, the item on public sector debt for the account of the Banque du Liban: On a dark night in the middle of last February, the value of this item was replaced from “zero” to 16.5 billion dollars, without any explanation or justification, except for a small sentence that says that Salameh “understands.” With the Ministry of Finance in 2007 on a strange procedure according to which the dollars he sells to the public sector, in exchange for cash pounds, are calculated as debts on the state. In this sense, Salameh woke up like a bankrupt merchant in 2023, so he went back 16 years, and counted all the cutting operations that took place on behalf of the state as debts on it.
What is the meaning of the previous number in the item of debt owed by the state, i.e. “zero”? What is the meaning of the new figure, which is close to 83% of the GDP, or 16.5 billion dollars? What is this strange bi-monthly budget, in which the numbers jump in this suspicious way? And what financial abstracts can one benefit from, in the face of these strange financial acrobatics?
In the assets section, one finds the item of other assets, that is, the famous fictitious assets that Salameh used to inflate without any accounting support, to hide the accumulated losses in his actual and real assets. What we are saying here is not an accusation, but a fact that has been revealed and confirmed by all the accounting and forensic audit reports that have been prepared so far.
At the beginning of February, the value of these fictitious assets was equivalent to 49.5% of the total budget size, which indicates the foolishness of considering this financial buffoonery as an actual “balance”. Then things take a more strange turn, after the value of this item increased slightly in mid-February, while its percentage of the total budget decreased to 10%, as soon as a new exchange rate was approved for preparing the budget (15 thousand pounds were approved for the dollar instead of 1507.5 pounds for the dollar). . Is there anyone who can seriously read this budget and its numbers, after all this fraud in percentages and numbers?
Then, in the same period, a new item, called “revaluation,” rises, as the value of this item rises from “zero” at the beginning of February to $36.5 billion in the middle of the month, after adopting the new high exchange rate. The increase in the value of this item, which in turn expresses fictitious assets as well, came without any explanation or explanation, to swell with it the total assets of the budget.
From this angle, it is possible to understand the decrease in the percentage of other assets (also imaginary) of the total budget size, although their value did not decrease, after the total budget size increased when the new high exchange rate was adopted, and after the “budget” columns were filled with other imaginary assets.
What is required of all this maneuver is to continue to hide the losses of Riad Salameh. The adoption of the high exchange rate raised the value of the Bank of Lebanon’s obligations towards commercial banks in hard currency, which imposed on Salameh the creation of new fictitious assets in mid-February, so that the volume of assets is once again equal to the volume of liabilities. This also forced Salameh to recall the $16.5 billion debt, which he recorded as a state obligation in favor of the Banque du Liban.
Mansouri does not fingerprint the numbers
The reader may feel some loss when reading the above explanations about revaluation items, other assets, and so on. As a matter of fact, one need not try to understand the significance of these shifts in numbers, because they do not really reflect any useful financial or accounting fact that can be discovered or understood. In all accounting and forensic audit reports, sentences are repeated that indicate that all these numbers were nothing but estimates that Salameh made himself, without relying on any actual value that was expressed. In short, there is not even something to be understood until the reader tries to analyze what he is reading.
Perhaps for all these reasons, Mansouri chose to stop publishing the strange financial statement, which Riad Salameh has always called “the fortnightly budget of the Banque du Liban.” Perhaps for the same reason, Mansouri replaced the budget by publishing reserves figures and gold assets, in exchange for the obligations that the Central Bank owes in the short term, in hard currency. This currently indicates, however, that Mansouri refuses to fingerprint Riyad Salama’s old accounts, by completing the publication of the fortnightly budget, as was the case previously.
Finally, the Lebanese are supposed to await the alternative accounting principles that Mansouri and his deputies will rely on, to complete the periodic publication of the budget, with more transparent standards. Replacing the distorted budget with the non-budget, that is, not publishing any budgets at all, will be worse and less transparent than the financial disclosure mechanisms adopted in the previous stage. Of course, the Lebanese will not wait for Mansouri to be able to complete the task of correcting the distorted budget within a few days or even a few weeks, but transparency requires that the Lebanese Central Council declare its next destination, at the level of financial disclosure in the Bank of Lebanon.
2023-08-24 13:14:57
#Mansouri #abandon #Riyad #Salameh #budget
