FORMER CBN GOVERNOR,PROF. SOLUDO ARRESTED

Prof. Soludo

The immediate past Governor of Central Bank of Nigeria, Prof. Charles  Soludo, was yesterday arrested by the Economic and Financial Crimes  Commission (EFCC) over his alleged involvement in the Australian polymer million-dollar banknotes bribery scandal which occurred between 2006 and 2008 when he was in office . The alleged scandal blew open in 2009 when an Australian newspaper, ‘The Age’, reported that an Australian firm that manufactures polymer used in banknotes in 28 countries, Securency International, paid millions of dollars bribes to secure polymer note printing contracts in some countries, including Nigeria. It was further alleged that N750million was paid to bribe Nigerian officials. It was gathered from sources in the commission that Soludo arrived the EFCC  Headquarters about 2pm from his Abuja residence and  immediately faced a team of operatives who quizzed him for several hours to ascertain his level of complicity in the scandal.  According to the source, “I can confirm to you that Soludo is now with us. He was arrested this afternoon and he is still with us. He is being quizzed over his activities while in office. I can also tell you that some other officials of the CBN are being quizzed over their actions.” the source said

When asked whether the questioning also covers the alleged Polymer notes bribery scandal, the source replied that he could not give details at this stage, saying that the details over Soludo’s interrogation would soon be made public.

The Australian newspaper had further reported that Securency International, a subsidiary of the Reserve Bank of Australia, RBA, paid millions of dollars into the offshore bank accounts of two British-based businessmen for onward transfer to some top Nigerian government functionaries and CBN officials to win the 2006 polymer printing contract.

Securency was said to have supplied 1.9 billion banknotes to the CBN between 2006 and 2008. But the bribe payments for the contract were reportedly deposited in the Seychelles and the Bahamas, listed by the Australian Tax Office as tax havens known for their secretive banking arrangements.

In a media release dated May 23,  2009, the RBA claimed  that “allegations have been made in The Age newspaper today that payments made to agents by Securency International Pty Ltd., a company in which the Reserve Bank is a shareholder, may have been used by the agents to pay ‘kickbacks’ to foreign government officials.”

The RBA added that the Board of Securency had immediately referred the matter to the Australian Federal Police, saying that Securency, which is at the centre of the bribery scandal, is a joint venture between the RBA and Innovia Films, a global supplier of polypropylene films.

When the scandal became public knowledge, the Australian Federal Police and an international audit firm said they had been investigating Securency and its sister company, Note Printing Australia. From the investigators’ preliminary reports, Mr. Peter Chapman, the Africa manager at Securency, had been forced to resign while the firm’s South African middleman, Mr. Donald McArthur, was removed. The Australian Federal Government said it had referred all questions about Securency to the Reserve Bank while the RBA had declined to answer questions about Securency’s activities in Nigeria.

Naira notes and coins are printed /minted by the Nigerian Security Printing and Minting Plc and other overseas printing/minting companies and issued by the CBN. In its 2007 Annual Report, the CBN said the volume of banknotes produced by the NSPM increased from 583.1 million to 1,550 million pieces. But for the printing of the controversial polymer notes, the NSPM only handled 615 million notes while 1.3 billion notes were printed abroad.

Based on the wide public acceptance of the N20 polymer note the CBN released in 2007, the late President Umaru Yar’Adua had, in October 2008, approved the conversion of the other lower banknote denominations on the recommendation of the CBN Board.

But Soludo had then described the allegation as “wild and wicked” and claimed that there could not have been a contract between the CBN and Securency on the grounds that orders for new notes were usually placed by the CBN through the NMSC.

The present CBN governor, Mallam Sanusi Lamido Sanusi, however, said the federal government would look into the matter to determine whether or not CBN officials received the alleged kickbacks.

But contrary to Soludo’s denial, the RBA credited the polymer contract award to the CBN. In its 2006 Annual Report, the RBA stated, “The CBN recently placed orders for its first polymer denomination – a redesigned N20 to be issued in 2007.”

The 2007 report also named Nigeria as one of the 14 countries Securency produced substrate for.