Sunday, November 24, 2013
Will Trust Bank underwrite Jammeh's $10 million Taiwan loan?
The Ministry further revealed that in contracting these types of loans, a clause was inserted in the loan agreements that gave local banks the right to bring up lawsuits against the borrower in the event of a default. Loans contracted this way, that is, through local commercial banks, are treated by the government as ordinary or regular business loans.
Following the severance of diplomatic ties with Banjul, the government of Taiwan revealed that The Gambia had such similar loan contracted through Taiwan's Export-Import Bank in the amount of US $10 million. This loan should not to be confused with a similar amount demanded of the Taiwanese in cash by Jammeh that was subsequently turned down in January this year because it was against Taiwan's foreign aid policy to dish out unreceipted cash loans
Trust Bank Ltd. is the only known local bank that is government-controlled. Social Security and Housing Finance Corporation and the Gambia Ports Authority are two government entities that constitute the single biggest shareholding voting block or 42.46%. The next single biggest shareholder is Databank Securities with 22.12%. The balance of the voting power is shared among groups of investors, both publicly and privately shares, who are friendly to and stalwarts of, the ruling APRC of Yaya Jammeh.
If Trust Bank is effectively the guarantor of the loan, will it underwrite it or pursue the regime of Yaya Jammeh in court with the view to ensuring that it fulfills its financial obligation to its former friend and diplomatic ally? It is unimaginable, in my estimation, that Trust Bank will take the lawsuit route given the nature of the Jammeh regime, and its symbiotic relationship with Trust Bank. So the most likely scenario is for Trust Bank to underwrite the loan to keep the Jammeh regime happy rather than risk default and its attendant consequences. Meanwhile, we will still want to know the authority for the loan, legislative or otherwise, and its proper accounting. We hope this is not too much to ask of our friends in Banjul.