Introduction:
At Verity News, we take our responsibility to inform, inspire, and enlighten seriously. This investigation is a culmination of our efforts to provide you with a clear and simple explanation of a technically complex issue that has far-reaching implications for Liberia’s financial system and governance. What happened to depositors’ money at SIBLL? Who approved the Central Bank of Liberia (CBL) to hand over US$8 million in liquidity support to SIBLL? Why does this government have so much interest in bailing out SIBLL? Who really benefits from this bailout amid legitimate IMF concerns? We break it down into 21 key pointers to help you understand the situation.
- The Origin of the Crisis
1. Licensing of SIBLL: On June 3, 2016, the CBL issued a license to GN Bank Liberia Limited/SIB Liberia Limited (SIBLL) to operate as a commercial bank.
2. FIBLL’s Collapse: During this period, First International Bank Liberia Limited (FIBLL) was on the brink of collapse, unable to service its legacy deposit liabilities.
3. Purchase and Assumption Agreement (P&A): To address the crisis, CBL and SIBLL entered into a P&A agreement, allowing SIBLL to take over FIBLL’s assets and deposit liabilities.
4. SIBLL’s Licensing Condition: SIBLL’s license was conditional upon the P&A agreement, as FIBLL had been declared insolvent.
5. Transfer of Assets and Liabilities: Under the P&A agreement, SIBLL inherited FIBLL’s assets, including a US$13.5 million loan portfolio, but excluded major debts owed to creditors like AFREXIM and CBL.
6. Loan Assets: SIBLL acquired loans worth US$6.5 million, deemed to have a high recovery prospect, alongside other assets valued at US$913,809.36.
7. Legacy Deposit Liabilities: SIBLL assumed a total of US$23 million in legacy deposit liabilities, including deposits from NASSCORP.
The Financial Strain and Government Intervention
8. Amended Agreement: The P&A agreement was amended in November 2017, leading to a revaluation of assets and liabilities.
9. Revaluation Results: The adjusted total assets stood at US$14.5 million, while liabilities amounted to US$23.1 million.
10. SIBLL’s Investment: SIBLL committed US$18 million to revive the ailing FIBLL and met the minimum paid-up capital requirement of US$10 million.
11. Loan Recovery Shortfall: SIBLL could only recover US$2 million of the US$6.5 million loan assets, resulting in a loss of US$4.5 million.
12. Write-Off: In December 2022, SIBLL wrote off the unrecoverable loans, in line with CBL regulations.
13. Asset Devaluation: The assets purchased by SIBLL were later found to be worth much less than initially estimated.
14. NASSCORP Withdrawal: The withdrawal of US$8 million by NASSCORP further weakened SIBLL’s liquidity, exacerbating the bank’s financial troubles.
15. Remaining Liabilities: Of the US$23 million in liabilities, SIBLL was only able to pay US$14.4 million, leaving US$8.6 million unpaid.
16. CBL’s Dilemma: Faced with the prospect of SIBLL’s collapse, the CBL had to decide whether to intervene to prevent a banking crisis.
The Controversial Decision
17. SIBLL’s Petition: On December 2, 2021, SIBLL submitted a petition to the CBL, requesting US$8 million in liquidity support to cover the remaining deposit liabilities.
18. CBL’s Approval: The CBL approved the payment in 2021, citing the need to maintain trust and confidence in the banking sector.
19. Presidential Involvement: In December 2023, SIBLL informed President-elect Joseph Boakai of the situation and the 2021 agreement.
20. Boakai’s Inquiry: President Boakai requested an update from CBL Governor Aloysius Tarlue on April 18, 2024, seeking clarity on the US$8 million payment.
21. CBL’s Resolution: The CBL Board adopted a resolution in May 2024 to proceed with the liquidity support, fulfilling the agreement with SIBLL.
The Hard Questions:
The series of events relating to SIBLL sudden bailout raises more questions than answers:
Why did the government hurriedly proceeded with paying US$8 million to SIBLL? Was this truly about protecting depositors and preventing a failing bank from collapsing, or were there other motivations/interests at play? Why wasn’t this done also for SIBLL, and other banks in Liberia that are also failing? Did the CBL even consult the Legislature before proceeding?
Who were the key decision-makers behind this agreement? What role did political influence and connections play in the CBL’s decision to allocate such a substantial sum of CBL’s reserves to bailing out a failing commercial bank amid liquidity crisis and exchange rate volatility facing CBL?
Why hasn’t the government been more transparent about the beneficiaries of SIBLL’s outstanding loans reportedly owed by “big shots”? Are there influential figures who still owe money to SIBLL but have evaded repayment?
Our Call to Action
Verity Newspaper has uncovered a list of prominent individuals, including senior government officials, who still owe SIBLL significant amounts of money. We urge President Boakai to make this list public. These debts represent public money, and the Liberian people have a right to know who is responsible and to demand that these loans be repaid in full. Verity News calls on the National Legislature to open an independent investigation into this SIBLL’s US$8 million bailout deal.
We are committed to pursuing the truth and ensuring that those in power are held fully accountable. Stay informed, stay engaged, and share this story. Your vigilance is essential in holding national leaders to account and ensuring justice for all.
