Sierra Leone govt. sues bank over unfulfilled agro-contract

Sierra Leonian minister of agriculture Sama S. Mondeh has disclosed plans to sue Rokel Commercial Bank for the bank's "failure to meet its guarantor obligation" in repaying a 1.6 billion leones ($500,000) debt owed by a defaulting investment company. In a loan guaranteed by the bank, Strand Investment Limited was paid for the supply of 30 rice milling machines. The contract, which according to Mondeh amounted to a total cost of Le 3.6 billion ($1.2 million), was awarded to Strand in September 2005 but he maintained that since then the company, "has made no attempt to comply with the contractual agreement."

Mondeh explained that the ministry did not just direct the part payment of the contract to the company, but ensured that a reputable bank, Rokel, presented itself as guarantor of the contractor, Strand. A condition of the agreement between the ministry and the bank stipulated condition that upon failure by the contractor to deliver the machines bidded for, the bank stands to repay the initial payment which was made to it on behalf of the contractor.

Mondeh expressed "deep regret" for having to take the decision against the bank, saying the contractor's action was "a very disturbing disappointment. This is an anomaly we are determined to address," he stressed, adding that the court action against the RCB will serve as a deterrent to other people who find pleasure in running away with government money when they would have been given a job to perform. "This is very much unacceptable," he said.

However, the minister noted that in spite of the non performance of some contractors, the National Programme on Food Security is "effectively on course," adding that the matter under review "has not in any way stalled or obstructed the programme. It has registered huge successes," Mondeh declared. He said that the state of hunger in the country now has been drastically reduced as compared to the situation before, during and immediately after the country's recently ended civil war.

Meanwhile, the bank expressed regret over the issue and said it would honour its responsibility and "normalise" the situation. It denied that it had operated in concert with Strand to rob the state of millions of leones, explaining that a bank official had had to go to the UK to track down Strand company officials involved in the unfulfilled contract.

Awareness Times