-Weah, Boakai & CBL Conspiracy Detected In SIBLL US$8.5 Million BAILout, New Leak Reveals
— Was former President George Weah Superfluous, Deceitful or Political WHEN HE SPOKE OF HIS SUCCESSOR BEIGN INVOLVED IN CORRUPTION AS IT RELATES TO HANDLING OF the BAILOUT? As Central Bank Refutes Insolvency Claims of Dr. PAA Nduom’s SIB Bank
IPNEWS: Amidst controversy as to whom granted the US$8.5 million bailout of SIB Bank Liberia Limited, a leak document in the possession of the authoritative Independent Probe Newspaper, tells how the bill-out process began as far back in 2020, with the Administration of former President George Manneh Weah, but negotiations continued into the Administration of President Joseph Nyuma Boakai.
A communication to by the Central Bank of Liberia on the bailout unveils how President Boakai was fully briefed on how the negotiations started between the Central Bank of Liberia, SIB and the Executive Mansion on processes leading to the final bailout of the bank since 2020.
IPNEWS understands that lengthy discussions were held in Accra, Ghana, between President-elect Joseph Nyuma Boakai and Dr. Paa Kwesi Nduom, owner of SIB Bank in the presence of his soon-to-be counterpart Ghanaian President Nana Addo Dankwa Akufo-Addo, in late December 2023.
IPNEWS also understands that a follow-up meeting was held with Liberia’s Vice President Jeremiah Kpan Koung and Dr. Paa Kwesi Nduom at the famous Nduom Resort in early February 2024. This has not been independently verified, though.
However, an excerpt from the letter written by Dr. Nduom, Chairman of the Board of SIB Bank, to then President-elect Boakai reads: “In line with the discussion held with you, please find attached the formal request we submitted to your Office on 28th December 2023 on the matter. In addition, we have also attached the full petition we submitted to the Executive Governor of the Central Bank, Honorable J. Aloysius Tarlue Jr., on the same matter dated December 20, 2021. I am confident that these two letters would be adequate to inform your action on the matter.”
IPNEWS understands that negotiations for the takeover of FIB by Sapelle International Bank Liberia Limited (SIBLL) started in 2020, during the regime of former President George Manneh Weah.
Recently, the government particularly the CBL, has come under criticism for its role in providing guarantees under the guise of financial sector stability without proper procedures, with mounting concerns as to whether or not both the Executive and Legislative branches of government were involved in the negotiations.
A leaked communication further reveals that both former President Weah and President Boakai were fully knowledgeable about this deal but kept it secret from the Legislature.
In the letter addressed to President Boakai under the subject line “Gratitude and Request”, the SIBLL President expressed gratitude for granting them audience. He also expressed “deep appreciation for the time and the genuine attention he spent listening to them.”
The letter revealed that the bank had submitted a formal request (for the CBL’s guarantee) to the President on December 28t, 2023 when Boakai was still president-elect.
An additional communication was sent the CBL expressing confidence that the two letters would be adequate to guide the President-elect’s decision for final approval of the bailout.
“We wish to express our gratitude for the audience you granted to us today. We deeply appreciate the time and the genuine attention you spent to listen to our appeal.
In line with the discussion held with you, please find attached the formal request we submitted to your office on 28th December 2023 on the matter.
In addition, we have also attached the full petition we submitted to the Executive Governor of the Central Bank, Honorable J. Aloysius Tarlue Jr., on the same matter dated December 20, 2021.
I am confident that these two letters would be adequate to inform your action on the matter.
Once again, be assured that Group Nduom believes in your vision and remains committed to continue its investment in Liberia. We also wish to assure you that SIB Liberia Limited remains committed to build a sound and resilient bank that retains the trust and confidence of the general public.”
Acting as though he didn’t know anything about this transaction, former President Weah projected the bailout as strange and without knowledge.
Weah addressing a press conference late July 2024, questions the transparency of the Boakai’s Administration to fight corruption when it approved the bailout of a commercial bank with taxpayers’ dollars of US$8.5 million without the approval of the Legislature as required by law.
Meanwhile, the Central Bank of Liberia has unequivocally and resolutely dismissed reports suggesting that two commercial Banks, including SIB Liberia Limited (SIBL), owned by Dr. Paa Kwesi Nduom, are on the brink of collapse.
Recently the International Bank Liberia Limited (IBLL) also mentioned in the alleged insolvency, denied media reports.
On August 8, 2024, reports emerged that both banks would face severe financial difficulties, leading to a rush of customer’s withdrawals.
The report suggested that SIBLL began encountering problems after acquiring the troubled First International Bank Liberia Limited and assuming it’s liabilities which amounted to approximately US$23 million.
According to the reports, SIBLL had earlier paid US$14.7 million of these liabilities and requested the CBL to cover the remaining US$8.5 million, citing cash flow issues.
After two years, the CBL Board of Governors reportedly approved the outstanding US$8.5 million payment, which has now become the subject of controversy in the public.
The delay in payment of the US$8.5 million according to sources within the SIBLL saw resistance from the George Weah Administration but was allowed immediately upon the takeover of President Joseph N. Boakai.
The CBL Board according to sources authorized the payment on May 17, 2024, following evidence that customers found it difficult to make withdrawals of their funds.
Amidst the uncertainties of the SIBLL’s ability to disburse customers’ funds, and spread of rumors of the SIBLL’s insolvency, the CBL categorically rejected these reports as untrue and urged the public to disregard the misinformation, providing solid reassurance to the public.
The Central Bank’s statement described the reports as impulsive, misleading and damaging to public confidence to Liberia’s financial system.
It has assured that both SIBLL and IBLL are in a robust financial position, with liquidity and capital reserves well above the regulatory requirements, stressing a sense of security to the public concerns.
“The CBL informs the public that the financial positions of these banks are robust, with their liquidity and capital reserves exceeding regulatory thresholds.”
“These banks fully comply with the CBL’s regulatory standards and continue to operate effectively under our supervision,” the CBL statement read.
SIB Liberia’s history
On 3rd June 2016, the Central Bank of Liberia, exercising some of the powers vested in it, issued a license to GN Bank Liberia Limited/ SIB Liberia Limited (SIBLL) to function as a financial institution and to do commercial banking business in Liberia. The CBL during the licensing process also tabled and negotiated the matter of the troubled bank then (now defunct), First International Bank Liberia Limited with the owners of SIBLL. The CBL saw the need to prevent the total collapse of the legacy Bank (FIBLL) and to protect the soundness of the Liberian Banking System.
Accordingly, the CBL and SIBILL agreed and signed a Purchase and Assumption Agreement that sought to protect the parties involved and also reach that objective. In line with that objective, the Central Bank approved the liquidation of First International Bank Liberia and endorsed that SIB Liberia Limited should assume significant portions of the Assets and Liabilities of the now defunct First International Bank Liberia Limited.
“The transaction maintained the nation’s confidence in the financial industry and prevented a complete collapse of the former bank, which event, would have caused significant damage to the financial industry,” the bank said in a letter to then President-elect Boakai, dated December 28, 2023.
Since its entry into Liberia in June 2016, the bank says it has grown into a key financial institution providing financial services 16 strategic locations and offers full branch banking services to customers from their 11 main branches across Liberia.
What was the issue?
In the communication to the President-elect, SIBLL said it had paid off US$14.7 million of the Legacy Depositors’ liabilities inherited from the defunct FIBLL, but the bank still owed US$8.5 million outstanding liabilities to pay-off to legacy depositors, with some depositors threatening legal actions on the bank.
The payment of the US$14.7 million, out of the working capital of GNBLL/SIBLL has significantly impacted the cash flows of the bank negatively. Accordingly, the bank appealed to the Central Bank to intervene in the repayment of the outstanding liabilities to the legacy depositors since that debt rightfully belongs to the Government of Liberia and the Central Bank.
The bank noted that the CBL Board of Governors saw the need and upheld the request of the Bank after a thorough review of the matter for over two years. The board has concluded and approved the payment of the outstanding legacy deposits liabilities of US$8 million to the Bank, but this was yet to be executed at the time of the letter.
The appeal
Owing to the CBL delay in executing the board’s mandate, the bank said it was compelled to seek the President’s intervention.
“As a Bank, we have done all we can do to maintain the nation’s confidence in the Financial Industry, an effort without which this country would – have experienced significant damage to its Financial Industry. The Bank has made significant strides to ensure sustained operations and we seek your intervention and collaboration to ensure that the gains made so far are not eroded.”
President Boakai’s response
As FPA reported, President Boakai did not disappoint the bank. In a communication dated April 18, 2024, on behalf of the President, Acting Minister of State for Presidential Affairs, Samuel A. Stevequah, instructed Executive Governor Alloysius Tarlue (now suspended) to provide an update on the progress made and the path to address the claims by SIB Liberia.
“By directive of the President, I am transmitting the attached documents from SIB Liberia Limited. His Excellency asks for an update on the progress made and the path to address the claims,” Stevequah wrote in his communication to Tarlue.
The implication
Just as was the case of the FIBLL- GNBLL/SIBLL, takeover, the Central Bank played an important role in the takeover of the Global Bank by Bloom Bank. Global was sold to Bloom Bank, but the Central Bank once again provided carte blanche guarantees to cover losses, including a lawsuit against Global Bank by one of its customers, businessman George Kailondo for damages due to failure to reconcile the customer’s account. Bloom Bank lost the case, and now the plaintiff is seeking payment.
The CBL is now required to pay an initial amount of US$2.3 million (SC) and potentially more for other lawsuits.
Additionally, FPA had learned that the CBL has paid US$705k representing 25% to George Kailondo. However, there is concern around weak supervision, with a recommendation for the Central Bank to review the liquidity and capital positions of commercial banks daily and not wait until they are in trouble before intervening.
Furthermore, some economists and financial analysts say there is a need for the CBL and the shareholders of the banks to recapitalize based on their liquidity position.
This is why criticisms are being voiced against the CBL’s role in providing guarantees in the name of financial sector stability without proper procedures, suggesting that the Executive and Legislative branches should be involved in such decisions.
There is also a growing call for accountability for those breaking the laws and a mention of the reserve requirements policy. All of this has serious implications for the CBL reputation and could negatively affect GOL’s new program with the IMF.
