Augustine Sorie Marrah, lawyer representing former Bank Governor Kelfala Marrah, in the ongoing Commission of Inquiry (COI) said there were no procedural blunders in the award of an Le80 billion loan from the Sierra Leone Commercial Bank (SLCB) to the Road Maintenance Fund Administration (RMFA). The loan from SLCB to RMFA was approved by Kelfala Marrah, while working as the Governor of the Central Bank of Sierra Leone. The loan received an exemption approval of a single obligor limit by the central bank with no objection from the then Governor despite the fact that the Minister of Finance then approved of it. Counsel Marah directed the Commission to page 4 of his written closing submission where he argued on whether the exemption approval of the Single Obligor Limit by the central bank was legal or illegal by referencing Section 35 of the Bank of Sierra Leone Act 2011, which set out the said provisions. Marah submitted that only a person or financial institution can break the said section but the Central Bank cannot fall within the provision provided under the section. He said, “By the testimony of witnesses before the Commission, the granting of exemption has always been an institutional decision by the Central Bank.” Counsel for former Governor of the Central Bank submitted, “In the absence of procedural irregularity and noting the fact that both witnesses, Director of Banking Supervision and the Relationship Officer for all Government funded projects and MDAs, concurred that the loan to RMFA is still performing well, any act by the Governor or his Deputy in their rightful duty cannot be construed as a personal act as prescribed in Section 75(b) of the Bank of Sierra Leone Act.” He continued, “By virtue of Section 15 the former bank governor acted within the law in regards to the approval of loan to RMFA, and the exemption was granted by the Central Bank and not the Governor as a personal act, hence, the approval letter was signed by the then Director of Banking Supervision.”
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He concluded that there has not been any case of wrongdoing. His client did not act outside of his scope as Governor. He did not act alone in discharging his responsibility with regards the no objection exemption to the loan, that witnesses said the loan is doing perfectly well and is not costing the State. He said the State did not show that his client acted negligently to the exemption. Counsel for the State, Musa Mewa, said the Single Obligor Limit cited in Section 35 of the Banking Act says State actors need to have an assessment before given approval to loans under such a category. He said if the Commercial Banks are going above it is the responsibility of a regulator to review the said Single Obligor Limit exemption to the loan before approval. Mewa said RMFA lacks the capacity to repay the Le80 billion loan at the time of acquisition, hence they are still paying even beyond the loan period. He said Section 75(b) of the Banking Act 2011 provides, “Unless it is proven that the act of omission construed wrongful conduct or gross negligence…” State counsel said based on the section the former Bank Governor was in gross negligence with no due diligence in approving the loan because according to him, the country’s economy was in bad form with companies folding as a result of the Ebola scourge. He emphasized, “Approval of Le80 billion loan to a State institution like RMFA, was ill-advised and negligent on the part of the Bank Governor for a non-objection approval to the loan,” noting that even in the evidence led there is sufficient proof that persons who were in authority have failed to protect State funds per law.
By Mohamed Kabba
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