Sagay: Private Sector Fraud Eclipses that in Public Sector

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  • Says annual N2trn subsidy scam stopped, stolen assets recovered

Demola Ojo
The Chairman of the Presidential Advisory Committee against Corruption (PACAC), Prof. Itse Sagay (SAN), has said that private sector fraud is far higher than that recorded in the public sector in Nigeria.

The professor of law, who called for anti-corruption agencies to beam their searchlights more on the private sector, made the assertion weekend in Abuja at the Conference on Financial Systems Integrity Improvement, jointly organised by PACAC, the Association of Chartered Certified Accountants (ACCA), the Convention on Business Integrity (CBI) and the Chartered Institute of Bankers of Nigeria (CIBN).

According to him, “Huge as fraud in the public sector may be, my feeling – from the few things I’ve read – is that it’s not even as huge as that in the private sector. Private sector fraud, particularly in the banking sector, is enormous. I’m therefore glad that we’re here today to look at aspects of that.”

The don also noted that the President Muhammadu Buhari-led APC government was elected by Nigerians during the 2015 election to put a stop to corruption in the country.

“This administration was elected mainly to pull down corruption, fraud and economic and financial crimes. Much has been achieved, although this is not appreciated by the general public,” Sagay said.

The conference, which proffered solutions to help tackle fraud and corruption in the country’s banking and finance sector had Nick Leeson as its keynote speaker. Leeson’s dealings and unauthorised speculative trading at Barings Bank led to the collapse of one of Britain’s oldest financial organisations in 1995.

Reeling out some of the achievements of the present administration, Sagay continued, “There’s nothing like subsidy scam anymore. At its height, over two trillion naira a year was being siphoned out of the country. People were collecting the money with the names of sea vessels that were either nonexistent, or in faraway territories. That leakage has been stopped.

“Much has been recovered in terms of stolen assets. Although not much has yet been achieved in the area of conviction for corruption and financial fraud, there has been some which tend to be overlooked,” he explained.

Addressing the audience which drew bigwigs from the banking sector, government circles, law enforcement and the diplomatic community, Sagay pointed out that progress was being made in prosecuting offenders.

“There have been cases in the subsidy scam in which the defendants have been sentenced to 10 years imprisonment. We’ve had the case of a governor, although he has avoided prison custody for now. But he was sentenced to five years; and quite a lot of non-high-profile cases in the hundreds.

“Our problem is with the high profile cases and I can assure you a lot of review is being done about how to tackle it.”

Leeson, who has paid for his crimes and uses his experience to help financial institutions plug holes that might be exploited by would-be fraudsters, said for there to be financial integrity, banks need to be held to account.

“You need a deterrent. Systems need to keep people in check because it’s human nature to push barriers,” he said. “If you see people doing stuff and not getting punished, there’s a possibility you might do the same. Or someone close to you.”

According to him, some of the things that aid financial crimes include a disparate system, poor communication and a complete lack of challenge.

“If your systems and policies are the same as two years ago, rest assured someone is already circumnavigating them. You need to keep them fresh,” he said .

ACCA’s Regional Head of Policy for Sub-Saharan Africa, Mrs. Jane Ohadike, explained that the global body for accountants was supporting the event which she described as “a noble cause” because the organisation has a mandate which goes further than developing quality finance professionals.

“We measure our success as an organization, not by how many professional accountants or financial managers we produce, but by product distinction in technical competence, by the ability of these professionals to apply their acquired skills to the effective service of the public, and thirdly – which is quite core to the profession and ACCA’s value code – the unconditional ethical code that is expected of professional finance managers and accountants globally.”