Published: August 5, 2024
MONROVIA – Documents acquired by The Liberian Investigator reveal that President Joseph Boakai was kept informed by his ministers of state about an US$8 million payment from the national reserves to SIB Liberia Limited to prevent its financial collapse.
By Lennart Dodoo, [email protected]
On April 18, 2024, Samuel Stevquoah, who was acting as the Minister of State for Presidential Affairs at the time, communicated with the Central Bank of Liberia’s Governor, J. Aloysius Tarlue, requesting an update on the matter. The communication read:
“Hon. Tarlue:
“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.”
The origins of this issue date back to June 3, 2016, when the Central Bank of Liberia (CBL) issued a license to GN Bank Liberia Limited, now known as SIB Liberia Limited, allowing it to operate as a banking institution. This licensing was part of a Purchase and Assumption Agreement aimed at preventing the collapse of the struggling First International Bank Liberia Limited. As part of this agreement, SIB Liberia Limited assumed significant portions of FIBLL’s assets and liabilities.
According to the Purchase and Assumption Agreement, the Central Bank made several material representations regarding the assets and liabilities of the defunct FIBLL. The agreement stated that SIB Liberia Limited would inherit loans and advances with high prospects of recovery amounting to US$6.5 million, as well as other assets valued at US$913,809.36. It also specified that FIBLL had customer deposits, including those from the National Social Security and Welfare Corporation of Liberia (NASSCORP), amounting to US$24,420,402.23 and other liabilities totaling US$402,950.00. These figures were later slightly amended in an addendum signed on November 14, 2017.
Since entering the Liberian market, SIB Liberia Limited has become a crucial financial institution with services in 16 strategic locations. Despite its growth, the bank has faced significant financial challenges due to the inherited liabilities. So far, SIB Liberia Limited has paid off US$14.7 million of these liabilities but still has US$8.5 million in outstanding debts.
These ongoing financial strains led SIB Liberia Limited to seek government intervention. In a letter dated December 28, 2023, Dr. Papa Kwesi Nduom, Group President and Board Chairman of SIB Liberia Limited, appealed to President Boakai for critical support to sustain the bank’s operations.
“SIBLL has paid off US$14.7 million of the legacy depositors’ liabilities inherited from the defunct FIBLL. This effort notwithstanding, the bank still has US$8.5 million outstanding liabilities to pay off to legacy depositors, with some depositors threatening legal actions on the bank,” Nduom explained in his letter to President Boakai, who was then President-elect.
He emphasized the negative impact of these payments on the bank’s cash flows, stating, “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.”
Nduom further added, “Your Excellency, it is against the aforementioned background, that we are compelled to seek your intervention in this matter.”
On December 2, 2021, a formal petition was submitted to the Central Bank of Liberia by SIB Liberia Limited, represented by its Managing Director, Joseph K. Anim. The petition called for a review of the Purchase and Assumption Agreement to ensure the bank does not suffer irreparable damages as it continues to implement the agreement.
The petition highlighted several key points, including the bank’s financial struggles due to non-performing loans and the withdrawal of major depositors like NASSCORP. It detailed that out of the US$6.5 million in loans expected to be recovered, only US$2 million had been successfully recovered, with the prospects for the remaining amount looking bleak. Additionally, the “other assets” valued at US$913,809.34 were found to be worthless. The bank has applied over US$14.4 million of the US$18.5 million it invested towards the payment of outstanding liabilities inherited from the defunct FIBLL.
The petition requested that the Central Bank provide US$8 million to SIB Liberia Limited to pay off the remaining outstanding legacy deposit liabilities and permit the bank to write off a US$4 million legacy loan balance from its books.
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