The Solicitor-General on behalf of Assets Investigation, Restitution and Recovery Team (AIRReT) writes ECOBANK Liberia Limited to restitute over US$4m into the Government of Liberia Account. This amount, according to AIRReT, represents cash performance bond posted by ECOBANK Liberia on behalf of the Chinese Company CNQC for the renovation of the Execution Mansion which the company defaulted. See below AIRReT’s letter to ECOBANK Liberia.
August 12, 2019
The Managing Director
ECOBANK Liberia Limited
Re: Directive for the Return of Performance Bond in the tone of US$4,378,245.49
Dear Mr. Managing Director:
We present our compliments and hereby officially direct that you unconditionally return and deposit into the coffers of the Government of Liberia the amount of US$4,378,245.49(Four Million Three Hundred Seventy Eighty Thousand Two Hundred Forty Dollars Forty Nine Cents) representing the performance bond (indemnity bond) that you executed on behalf of the Chinese company CNQC on manager’s check N0. 0158998 for the renovation of the Executive Mansion on 19 December 2012.
Further, you will recall that the original of the manager’s check together with the duplicate copy representing the performance bond was given back to you for renewal or reissuance or for you to make good its monetary value and have same deposited into government’s account on 20 March, 2017, by the then Minister of State without Portfolio, Hon. J. Fonati Koffa. It is now clear that you took repossession of the manager’s check(performance bond) and its duplicate copy after you intentionally rejected its photocopy, contending that the government return the original copy, and in good faith, the manager’s check was subsequently transmitted to you in a letter dated 20 March, 2017, to be either renewed or reissued, but you deliberately failed and strangely chose to unilaterally dismiss its(performance bond) validity on grounds that it was no longer valid or operational or it had expired.
It must be noted that the Government of Liberia did not have any form of contract with you whether directly or indirectly regarding the performance bond; and moreover, the manager’s check representing the performance bond was, is, and remains the exclusive property of the Government of Liberia, and this is further demonstrated by the fact that the government held onto, and did exercise full and uninterrupted actual possession over the manager’s check up to, and including 20 March 2017, about three years after the cancellation of the contract with CNQC on 31 December 2014.
Therefore, this communication constitutes the official directive for and on behalf of the Government of Liberia to you, for the return and deposit, without any precondition, of the original manager’s check value of US$4,378,245.49(Four Million Three Hundred Seventy Eight Thousand Two Hundred Forty Dollars Forty Nine Cents), without any further delay. The basis of this directive is due to the fact that the contractual intent and purpose for which the performance bond was tendered by you, was after all, never achieved; CNQC inarguably defaulted in the performance of the Executive Mansion renovation contract, and same was subsequently terminated by mutual consent.
However, a careful review of the records, shows that the contract had a lifespan of 18 calendar months, and was valued at US21, 891,227.49(US Dollars Twenty One Million Eight Hundred Ninety One Two Hundred Twenty seven Forty Nine Cents), and the Government of Liberia, unaware of whatever intent you had in store to repossess the manager’s check by whatever means in later years, and unilaterally absolve yourself of any and all liabilities, relied on the purported financial sufficiency of the performance bond tendered, guaranteeing CNQC’s performance of the contract, and sequentially disbursed or caused to disburse during the period of the alleged implementation, taxpayers’ money in the amounts of US$7, 661,929.62(US Six Million Six Hundred Sixty One Dollars Nine Hundred Twenty Nine Sixty Two cents), US$8,756,491( US Dollars Eight Million Seven Hundred Fifty Six Four Hundred Ninety One Sixty Two cents) and US5,472, 806.87(US Five Million Four Hundred seventy Two Eight Hundred Six Dollars Eighty Seven cents) respectively, totaling USD 21,891,227.49. (US Dollars Twenty One Million Eight Hundred Ninety One Two Hundred Twenty seven Forty Nine Cents) See Article IV (a, b & c) of the contractual agreement.
Further, we also note that Article IV (d) of the contract, provides that the renovation work should have commenced or did commence on 2 January 2013, and should have ended or effectively ended on 30 June 2014, but remained in force and effect up to, and including 31 December 2014 which is the effective date of cancellation as contained in the Memorandum of Understanding (MoU) of 2015. This means the performance bond guaranteeing CNQC’s execution of the renovation contract was incontestably valid and operational up to, and including 31 December 2014, about five (5) months after it should expired upon the completion of the renovation works and same had remained in the possession of the Government of Liberia up to and including 20 March 2017.
It is important to stress that ECOBANK was at liberty to inform CNQC that the performance bond tendered on its behalf which was in the possession of the government of Liberia up to 20 March 2017 had expired or had become invalid and thereby seek its repossession but woefully failed to do so because it knew or had reason to know that the cancellation of CNQC’s contract on 31 December, 2014 did not in any way injure or conclude the right of the government from exercising full control over or taking possession of the performance bond.
Besides, the purported execution of a Memorandum of Understanding(MoU), cancelling the renovation contract in 2015 as in keeping with Article V section 1 made no reference to either ECOBANK or the performance bond; it did not retrieve or nullify the performance bond in the possession of the Government of Liberia and did not preclude the Government of Liberia from exercising control over, or from claiming or demanding the deposit of the performance bond or its monetary value into its coffers. Article V section 1 of the agreement states: “If the contractor should be adjudged bankrupt, or if the contract should make a general assignment for the benefit of the Contractor’s creditors, or if a receiver should be appointed on account of the contractor’s insolvency, or if the contractor should persistently or repeatedly refuse or fail to observe laws or ordinances or the instructions of the general consultant or project manager, representing the OWNER, upon the issuance of a certificate by the general consultant or project manager, indicating that sufficient cause exists to justify such action, the OWNER may without prejudice to any other right or remedy, and after giving the Contractor seven days written notice, terminate the employment of the contractor take possession of the premises including all materials, equipment, tools, machinery and appliances thereof and finish the work by whatever means the OWNER may deem expedient.”
It must be noted that the expression:“…the OWNER may without prejudice to any other right or remedy…” terminate employment of the contract after giving the contractor seven days written notice, clearly supports the intent and purpose of this Letter Demand for the deposit of US$4,378,245.49(Four Million Three Hundred Seventy Eight Thousand Two Hundred Forty Dollars Forty Nine Cents) into the account of the government of Liberia for the fact that the manager’s check representing the performance bond was acquired or repossessed by tricks and artifice by ECOBANK Liberia Limited from Hon. Koffa. Also, the word “may” as used in Article V Section 1, which is meant to protect and not to prejudice “any other right or remedy” of the Government of Liberia, is after all discretionary; and it provides no time-bar or no statute of limitations as to when the government should exercise such right or demand such remedy.
Furthermore, the waiver of claims against CNQC are indisputably exclusive of, or did not cover or extend to the performance bond which was, and had been in the possession of or had been the exclusive property of the government, and therefore, the Memorandum of Understanding (MoU) of 2015 was executed “without prejudice to any other right or remedy” as in the case of the performance bond—it should have been returned by ECOBANK only upon the issuance of a certificate satisfying the completion of the renovation work but was never done because CNQC defaulted.
That said, and in good faith, the Government of Liberia hereby directs and advises you, as before, to unreservedly, and in the spirit of good partnership, deposit the amount of US$4,378,245.49(Four Million Three Hundred Seventy Eighty Thousand Two Hundred Forty Dollars Forty Nine Cents) into government consolidated account at the Central Bank of Liberia(CBL), and after that, you are further directed to proceed to the Assets Investigation, Restitution and Recovery Team(AIRReT) offices located on Center Street, downtown Monrovia, and present the bank slip showing the payment or the deposit of the amount in question within fourteen(14 )working days as of the date of this communication to avoid any embarrassment.
As Solicitor-General of this Republic, it is also important to remind you that the diplomatic harmony highlighted in the fourth paragraph of the preamble of the Memorandum of Understanding(MoU) executed in 2015 which somehow suggests a reciprocity recognition of sovereign immunity as a basis of not pursuing any and all further claims arising from or growing out of the cancelled contract, did not extend to ECOBANK Liberia limited as a private party, and same did not annul or cancel the legitimacy of the performance bond which was already in the possession of government or did not prejudice the right of government in exercising control over or enjoying the cash benefits thereof. See Article V section 1 of the contract.
Finally, while the government of Liberia through the office of the Solicitor-General has mandated AIRReT to investigate the alleged termination of CNQC’s contract on December 31, 2014, and the purported waiving of taxpayers’ money in the amount of US21,891,227.49(US Dollars Twenty One Million Eight Hundred Ninety One Two Hundred Twenty seven Forty Nine Cents), which was secured from legislative budgetary allocation for the renovation of the Executive Mansion, as well as all claims arising from poor performance, underperformance, lack of ingenuity in engineering designs and specifications, and the provisions of cheap materials for the renovation works, on the basis of good diplomatic relations between the contractor’s(CNQC’s) country and government, it must be emphatically clarified that such waiver, however, did not extend to the performance bond or ECOBANK which was not a party to any of the agreements; and the waiver of claims did not prejudice the “…any other right or remedy” provision of Article v section 1 of OWNER’s possession of the performance bond.
We are therefore confident, as always, and as our viable economic partner, that you will humbly comply with this directive in good faith unconditionally, and ensure that our endeavour to recover the US$4,378,245.49(Four Million Three Hundred Seventy Eighty Thousand Two Hundred Forty Dollars Forty Nine Cents) for and on behalf of the struggling taxpayers of Liberia, and have same deposited into government’s account is duly and forthrightly respected, and same shall not easily be distracted by multiple administrative excuses.
Cllr. Sayma Julius Syrenius Cephus
SOLICITOR-GENERAL/ Certified Counsel, ICC, STL, ADC-ICT, ECBA,EFCL, AEA, JL & IAP
CC: Minster of Justice/ Attorney-General
“Minister of State /Presidential Affairs
“Minister of Finance & Development Planning (MFDP)
“Cllr. Arthur T. Johnson, Chairman, AIRReT