Lebanon’s central bank seeks extra powers

A Lebanese protester carries a child as he takes part in a rally in front of a bank in the southern city of Sidon on December 30, 2019 to protest against nationwide imposed restrictions on dollar withdrawals and transfers abroad. (AFP)
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Updated 12 January 2020

Lebanon’s central bank seeks extra powers

  • Measures imposed by Lebanese commercial banks needed to be regulated and unified, a central bank letter said

BEIRUT: Lebanon’s central bank is seeking extra powers to regulate and standardise controls which commercial banks are imposing on depositors, the governor said on Sunday, saying his intention was to ensure “fair relationships” between banks and customers.

Seeking to prevent capital flight, commercial banks have been tightly controlling access to deposits and blocking most transfers abroad since October, when anti-government protests brought a long-brewing Lebanese economic crisis to a head.

The Lebanese authorities have not, however, introduced formal capital controls regulating these measures.

Central bank governor Riad Salameh, in a text message to Reuters, confirmed sending a letter to Lebanon’s finance minister on Jan. 9 seeking “exceptional powers necessary to issue regulations pertaining” to conditions in the sector.

He said no new measures were planned.

The letter, reported by Lebanese media late on Saturday, said the measures imposed by commercial banks needed to be regulated and unified “with the aim of implementing them fairly and equally on all depositors and clients.”

Lebanon’s caretaker government has not issued any statement on Salameh’s request, which was set out in a letter to caretaker Finance Minister Ali Hassan Khalil.

In the letter, Salameh said implementation of the controls by commercial banks had “on several occasions led to prejudicing the rights of some clients, particularly with respect to the unequal approach with other clients.”

He urged Khalil to work with the government “to take appropriate legal measures ... to entrust (the central bank)” with the necessary extra powers.

In justifying this, he cited the need to “secure the public good, to protect banking and monetary stability ... and to protect the legitimate interests of depositors and clients.”

Reflecting a hard currency shortage, commercial banks have gradually reduced the amount of dollars customers can withdraw since October. For most, the cap is now a few hundred dollars a week.

Lebanon is facing the worst economic crisis since its 1975-90 civil war, rooted in decades of state corruption and bad governance that have landed the country with one of the world’s heaviest public debt burdens.


NMC Health removes CEO amid investigation of UAE firm’s finances

Updated 27 February 2020

NMC Health removes CEO amid investigation of UAE firm’s finances

  • Chief Executive Prasanth Manghat was dismissed with immediate effect
  • Chief Operating Officer Michael Davis was appointed as interim CEO

NMC Health has removed Chief Executive Prasanth Manghat with immediate effect and granted its finance chief extended sick leave, as more details emerge from an investigation into the UAE health care firm’s finances.
Abu-Dhabi based NMC said after Wednesday’s market close that it had appointed Chief Operating Officer Michael Davis as interim CEO to succeed Manghat and said Chief Financial Officer Prashanth Shenoy had been placed on longer leave.
Manghat had been with NMC for about 10 years in various roles, including deputy CEO and CFO, and had seen the company through its 2012 listing on the London Stock Exchange.
The moves are the latest blow for the firm whose shares have lost about two thirds of their value since US-based short-seller Muddy Waters late last year questioned its financial statements.
NMC had said at the time that the report was “false and misleading,” but had opened its own investigation into company finances. The review is being led by Louis Freeh, who was director of the Federal Bureau of Investigation in the United States from 1993 to mid-2001.
NMC on Wednesday said the investigation committee had identified supply chain financing arrangements that were entered into by the company and “which are understood to have been used” by entities controlled by founder BR Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi.
Reuters was unable to reach Manghat, Shetty and Muhairi for comment outside business hours on NMC’s latest statement.
The company, which operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes in 19 countries, said the committee was reviewing a drawdown of its facilities that had not been disclosed or approved by the board.
Its shares closed 6.6% higher before Wednesday’s statement.
NMC also said it had suspended a member of its treasury team over possible discrepancies in its bank statements and ledger entries, and said it would be unable to publish its annual results till at least the end of April.
Indian billionaire Shetty resigned as NMC’s co-chairman this month, after British regulators said they were looking into NMC following a disclosure that he had misstated the size of his stake.
Shetty had said this month that his NMC shareholdings were under a legal review looking into a large portion of his shares signed to two of NMC’s top investors in 2017, while some of his other stock had been pledged as security against loans.