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Gov’t Insider invalidates allegations against Gambia and Central Bank

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Insider’s Comments.

I refer to your news report captioned Banjul Born Insurance Broker Bai Ndongo Faal Accuses The Gambian State of Witch Hunt.

I must first start by refuting all the allegations against the Gambian State and Central Bank in particular, as total lies, fabrication, dishonest, malicious, fraudulent and total lack of respect to authority. My reactions are summarised as follows:

  1. Disappointed in Mr. Faal – First, I am disappointed in Bai Ndongo making all the personal attacks with INSULTS on distinguished personalities like Dr Seeku Jaabi and Bai Senghor, both senior officers of high repute instead of stating between him and Allah his contributions to the problems of his companies that were contrary to CBG regulatory requirements. We respect him as a senior man with his age but not his poor attitude. Those who know Mr Faal he has ever been like this – stubborn, uncompromising, dishonest in his dealings, cunning …..name them that’s his whole life.
  2. Licensing of Gamsavings – In the first place, Bai Ndongo’s application for Central Bank of The Gambia (CBG) to licence Gamstar Savings and Credit Company (Gamsavings) as a microfinance Company was regretted in 2002 because Gamstar Insurance Company, a 30% shareholding was in a poor financial state to float another company. He was asked to put his house in order i.e for the insurance company to be profitable. Again, the Gamstar insurance company, the life assurance company and himself were the three shareholders and Bai Ndongo owns 100% at the time of both the assurance and insurance companies. He used his position as Chairman of Jammeh Foundation for Peace to meet Clarke Bajo, the Governor then to be given the chance promising to comply with CBG directives. It was when Governor Bajo recalled the file and stated ‘’ APPROVED WITH CLOSE MONITORING’’. From there Gamsavings never complied with any CBG prudential requirements from capital to liquidity, reserves requirements, approval before expansion, fit and proper persons’ before appointments. To my knowledge, there has never been a company under CBG regulation operating like that not in banking, insurance, microfinance or bureau De Change.
  3. Poor financials of Gamsavings – Gamsavings never break-even, it was a total loss making company, which got capital eroded due to accumulated losses. Temporal injections could not safe the company this coupled with continuous butchering of the finances of the company. He uses finances in Gamsavings to bail out, pay salaries of the insurance company, the life assurance company, his life style and his family even his daughter one Sainabou Faal going to the USA to deliver to her child, she took money from Gamsavings. These are known to CBG and steps were taken to redress it. Insurance staff will take 1 by 6 loans from Gamsavings, deductions were made each month collected at the Insurance company not returned to Gamsavings until CBG raise the RED FLAG and force the insurance company to pay off.
  4. Poor Capital – The capital of Gamsavings reached NEGATIVE D9.5 million and Bai Ndongo borrowed D6 million from Ecobank to capitalize Gamsavings in 2009/2010. Those of us familiar in regulated financial institution, IT IS NOT ACCEPTABLE TO BORROW FUNDS TO CAPITALISE A FINANCIAL INSTITUTIONS. This is because there will be undue pressure on the company probably to forge records to make profit in order to pay dividend to pay the loan interest and principal. Even if that is allowed, Bai Ndongo made Gamsavings to pay the loan to Ecobank D115,000 monthly. When CBG raised the RED FLAG he abandoned that but then increased his salary from less than D20,000 to D115,000 so that when he is paid, he will forward the amount to Ecobank to meet loan payment requirements. This again CBG did not accept because the company on its knees cannot afford such outrageous increase in salary, these showed CBG’s continuous trouble with Bai Ndongo. If Mr Faal is to secure a loan to recapitalise a company, he MUST pay the loan personally NOT the company, he is ONLY entitled to receive his dividend if the company makes a profit and declare dividend which the company never made profit moreso declare dividend.
  5. BULLYING TENDENCIES OF Mr FAAL – Mr Faal is expanding the branches of Gamsavings without authority from CBG as required. He expanded to 10 locations without the required capital and approval from CBG. As we know capital finances expansion and absorb losses. Depositors funds CANNOT BE USED TO FINANCE EXPANSION. He went ahead because he is CHARIMAN JAMMEH FOUNDATION FOR PEACE, the position he often uses to bully CBG Governors from 2002 to 2010 when Gamsavings was in operation.
  6. ABUSES OF GAMSAVINGS BY FAAL – Mr Faal abuses the finances of Gamsavings on a daily basis knowing he can always mobilise savings from the public and divert those funds to finance his life style and family. Gamsavings used to borrow funds from banks to bail out the insurance company and other entities of Mr Faal when the Insurance company is highly indebted in the banks GRATISwhen it should have charged interest rate on the loan. Members of his family employed in the company do whatever they like. I can remember one of his sons sold more than 20 laptops to finance his trip to USA with no stap taken by Faal to address it
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  8. POOR CAPITAL OF GAMSAVINGS– With Gamsvings in NEGATIVE CAPITAL, CBG wrote to the Ministry of Finance to give full information on the unsafe and unsound operations of Gamsavings and suggesting steps to address it including seize the company to restructure and turn it around like CBG did to several financial institutions like Meridien BIAO now Trust bank, Keystone now Mega bank, Continent bank among others. At the time Mr Momodou Foon was the Minister and Momodou Sabally was then Director of Budget but surprisingly there was no reply to CBG’s three letters. There remains the only OPTION to revoke its licence. The company was first put under PRESCRIPTION and appointed one of the best Examiners at the time Dr Seeku Jaabi now the First Deputy Governor as ADVISOR not LIQUIDATOR
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     as Mr Faal was wrongly stating it. Mr Faal knows Dr Jaabi is no NON-SENSE MAN he can bully CBG past management but not Dr Jaabi. Mr Faal once attended one of the series of meetings on his company to talk about how to address the numerous troubles of Gamsavings at the office of Bamba Saho then General Manager (number 2 of the CBG). He was totally not cooperating with CBG and finally stood up to say this ‘’I DON’T CARE WHAT CBG WANTS TO DO WITH MY COMPANY BUT I CAN TELL YOU THAT I BAI NDONGO FAAL CAN DO ANYTHING IN THIS COUNTRY AND NO ONE NOT CBG CAN DO ANYTHING ABOUT IT’’ . He walked out followed by his General Manager and Accountant. The accountant one Saikou Jarju is around a living witness.
  9. 3 million CBG funds to pay Depositors- Customer lined up in May 2010 to make a withdrawal from their deposits but there was no money to pay not only from Head Office but from all its branches. There was chaos, one can hear the shouting from a distance, immediately CBG came to know about it. Immediate send in the CBG Advisor to use the D5million earlier blocked in Ecobank to pay off depositors their money. This block was done to disallow Mr Faal to use the funds being depositors monies for personal sue. At the end of the exercise, CBG paid D14.3 million to pay off depositors minus D5 million of Gamsavings funds, meaning CBG own funds of D9.3 million were used to protect the financial stability and avoid CONTAGIOUS EFFECT – a run on other banks.
  10. Court Case – the case is now in court to recover D9.3 million from Mr Faal as shareholder subjecting to the company to MASSIVE ABUSE. He refused to received a court sermon to appear in court citing his ill health to appear in court. This has frustrated proceedings to continue in court. In law, though Gamsvings is a limited liability company BUT if the company is subjected to such poor governance, fraud and abuse of finances, the court can LIFT THE VEIL – i.e extend the liability from company residual assets to personal assets of shareholders, this is what Bai Ndongo is fearing.
  11. Gamstar Insurance Abuse Continues – Mr Faal in 2006 sold 60% of his shares to Industrial General Insurance (IGI) Nigeria PLC yet still the same abuses continue. He brought his sons and daughters to the company as I earlier said to finance his and the family’s life style. He is paying himself what he called CONSULTANCY FEES of USD3,200 MONTHLY. Somebody with STOKE confined to in bed be doing consultancy and be paid such an outrageous amount of money when the company is zero capital. He does not care about the POLICY HOLDERS, NOR THE STAFF POSSIBLE REDUNDANC..With zero capital of the insurance company, CBG came again to put the company under PRESCRIPTION just as Gamsavings at the time. By CBG Act and financial laws of this country, if the capital adequacy ratio reached 50% below the requirement, it requires CBG intervention without NOTICE.
  12. FIT AND PROPER OF BAI NDONGO FAAL – in regulatory circles, if any person is involved in a collapse or bankruptcy of a regulated financial institution, you are barred to be a shareholder, Managing Director, senior Manager or even a branch Manager of any financial institution under Central Bank supervision. THIS IS NOT CBG ALONE BUT GLOBAL STANDARDS. The capital of Insurance company dropped to zero and requires recapitalization. If it was WITCH HUNTING as he referred CBG could just operationalise the provision and subject him to it long long time when Gamsavings collapsed but no. But now with the recapitalization of Insurance company, the provision is relied upon and bar persons like Bai Ndongo Faal a RISK TO THE ENTIRE FINANCIAL SECTOR FROM PARTICIPATING IN THE FINANCIAL SECTOR AS A SHAREHOLDER. The rest will be handle in court when he makes himself available. Let him stop calling names, get the Press Trial and sympathy from the public. This is a country of laws and we are all equal before the law. Let him throw the stick and walk to the courts to clear his name. He is a senior man by age no longer a teen boy capable of doing some of these things.
  13. BAR FROM FINANCIAL SECTOR – Mr Faal is fortunate to be in Gambia if he was in Nigeria, he would have been barred from the financial sector not even a bank account he can hold with any bank. No savings or current account he can open with any bank because he is a serious risk, a systemic risk to the financial sector.

I rest my case.

From: Freedom Newspaper

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