Verity News investigation has uncovered a complex and controversial decision involving the approval of an $8 million payment by the Central Bank of Liberia (CBL) to SIB Liberia Limited (SIBLL) for settling legacy deposit liabilities.
This decision, which dates back to the administration of former Presidents Ellen Johnson Sirleaf and George Weah, has been brought back into the spotlight by the current President, Joseph N. Boakai, who has requested an update on the matter.
Background
On June 3, 2016, the Central Bank of Liberia issued a license to SIB Liberia Limited, allowing it to operate as a commercial banking institution. As part of this licensing process, SIBLL agreed to assume certain assets and liabilities from the now-defunct First International Bank Liberia Limited (FIBLL). The intent was to stabilize the banking sector and prevent the complete collapse of FIBLL, which would have caused significant damage to Liberia’s financial industry.
The Legacy Liability Issue
Since acquiring FIBLL’s assets and liabilities, SIBLL has paid off $14.7 million of the legacy deposit liabilities. However, an additional $8.5 million remains unpaid, with depositors threatening legal action against the bank. SIBLL claims that these payments have significantly strained its cash flow, leading to an appeal to the Central Bank for intervention.
The Weah Administration’s Approval
During the administration of President George Weah, SIBLL’s challenges were addressed by the Central Bank’s Board of Governors. A petition dated December 2, 2021, from SIBLL’s Managing Director, Mr. Joseph K. Anim, outlined the bank’s struggles and proposed solutions, including the provision of $8 million to pay off the remaining legacy deposit liabilities. The Board of Governors, after a thorough review, approved this payment. However, despite this approval, the funds were never disbursed.
Boakai Administration’s Inquiry
With the transition of power to President Joseph N. Boakai, the issue resurfaced. On April 18, 2024, Acting Minister of State, Semuel A. Stevquoar, transmitted a request to the Executive Governor of the CBL, Hon. J. Aloysius Tarlue Jr., under the directive of President Boakai. This request sought updates on the progress made in addressing the claims and emphasized the urgency of the matter.
Correspondence from SIBLL’s Group President and Board Chairman, Dr. Papa Kwesi Nduom, dated December 28, 2023, reiterated the bank’s gratitude for the President’s audience and stressed the need for support in settling the legacy deposit liabilities. The letter highlighted that SIBLL had already paid a substantial portion of these liabilities and emphasized the need for the remaining $8.5 million to prevent legal actions and maintain confidence in the financial sector.
Detailed Petition to the Central Bank
The detailed petition submitted to the Central Bank on December 2, 2021, by SIBLL’s Managing Director, Mr. Joseph K. Anim, provides a comprehensive overview of the bank’s struggles.
The petition outlines that the initial agreements with the Central Bank included assurances about the value of assets and liabilities assumed from FIBLL.
However, the bank encountered significant challenges, including non-performing loans and the withdrawal of major depositors, which undermined the transaction’s success.
The petition proposed two primary solutions:
1. The provision of $8 million to pay off the remaining legacy deposit liabilities.
2. Permission for SIBLL to write off a $4 million legacy loan balance from its books to improve its financial standing.
Current Status and Implications
Despite the approval from the Central Bank’s Board of Governors during the Weah administration, the $8 million payment has not been executed. President Boakai’s administration has now taken up the issue, seeking clarity and resolution. This delay raises concerns about the decision-making process within the Central Bank and the influence of executive directives on financial matters.
This case underscores the need for greater transparency and accountability in financial decisions involving public funds.
The involvement of high-level officials and the substantial amounts at stake warrant a thorough investigation to ensure that all actions taken are in the best interest of Liberia’s financial stability.
As Liberia continues to navigate its economic challenges, the government and financial institutions must prioritize transparency and effective communication with the public.
Resolving this issue will be crucial in maintaining confidence in the country’s banking sector and ensuring that similar situations are handled with greater scrutiny in the future.
