MONROVIA, Montserrado – Days after his company was named as one of the several Liberian-owned businesses that had defaulted on loan payments, Liberty Party Chairman Benjamin Sanvee has taken a leave of absence to face his accusation.
A leaked document from an ongoing audit report of the Private Sector Development Initiative commissioned by the minister of finance named Sanvee as head of one of the several businesses that improperly received business loans.
The audit, according to the ministry, was to ascertain the reliability of the process, the existence of the businesses, and reasons for delayed repayments.
Sanvee confirmed that his family company, Sanvee Holdings, for which he signed the loan as CEO, had defaulted on the loan.
He clarified that he was never proud of the situation, but blamed economic hardship that brought loss to the company.
Taking a loan, he said, was in the best interest of the business and any business establishment would do so.
“Yes, we defaulted on the loan,” he said. “Of course, we’re not proud of that. It was never our intent.”
He blamed the economic climate and current competition of the market for not being able to pay the loan in the stipulated time.
Sanvee also clarified that his family company received the loan when he was not yet Chairman of the Liberty Party, seemingly in an attempt to distance the party from the fraud allegations.
He said he has requested his party to grant him the leave of absence to have the opportunity to right the wrongs, by discussing with relevant authorities to restructure the loan payment.
“We are at a pivotal moment within our institution’s existence; we’re having elections in a few months, and I will do nothing to be used as a distraction to take the Liberian people’s attention away from the real issues,” he said.
According to the document, Sanvee Holdings, along with several other businesses, have defaulted on their payments. The report also said it could not locate some of the businesses.
“Based on their addresses on books, we did not find or see the twelve 12 businesses at locations stipulated,” it said.
“We tried to contact them using telephone numbers obtained from borrowers’ files, but their phones were permanently switched off.”
The financing initiative was established in 2014 at the Ministry of Finance to financially strengthen Liberian-owned small and medium-sized businesses through loans.
The beneficiaries were expected to repay, and the repayments would be disbursed to other Liberian businesses in order to create jobs and accelerate the participation of Liberian-owned businesses in the economy.
According to the document, the Finance Ministry entered into an agreement with LBDI in May 2014 to partner and establish an account through which the borrowers should have been receiving loans.
The audit established that there was a memorandum of understanding reached between MFDP and LBDI to coordinately run the loan activities of PSDI, However, said customers’ evaluation and vetting was squarely done by MFDP.
The evaluation or vetting conducted by MFDP-PSDI Desk provided many loopholes for default. For example, there was no collateral to back some loans, many borrowers used the borrowed funds as a start-up for their businesses instead to run existing businesses, while there is no evidence of comprehensive market surveys on file.
These conditions, the report said, created a serious impediment to recovery, making it difficult for the funds to be revolving.
Out of the 46 borrowers, only one company – Garson Incorporated, located on 11th Street in Sinkor – paid its full obligation of US$150,000 plus US$10,500 interest. Garson’s account statement revealed that the institution has only US$11 outstanding.
President Ellen Johnson Sirleaf has expressed shock over the initial results of the ongoing PSDI audit.
“We can say with a high degree of confidence that such a scheme set up at the PDSI is clearly a conflict of interest and will be dealt with by the full weight of the law,” a statement from the Executive Mansion read.
The president has already ordered the principal of the program during the period and former finance deputy minister for fiscal affairs, James Kollie, to return to the country from an official trip to assist in the audit and answer to all of the issues associated with it.
“The minister of finance is to have a full audit report on my desk within two weeks for further action,” the president disclosed in the statement.
“We remain seized of this matter and will leave no stone unturned in the interest of the nation.”
Meanwhile, Kollie has welcomed the opportunity to fully respond to the claims, assertions, and accusations made in the draft audit report.
“Although I was the subject of the audit, contrary to best practice, and until only a few days ago, I was never notified or interviewed by the auditors,” he said. “My first encounter with the auditors was on June 2, a day after the draft report was issued.”
According to him, these are challenging political times for the country, and that it is easier to pass public judgments before hearing all facts.
He assured the public that he would fully cooperate with the investigation.