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Feb 9, 2016

S.S.B. Chairman Clarifies Loans to Companies Allegedly Linked to John Zabaneh

Douglas Singh

In June 2015, the S.S.B. approved loans to Meridian Enterprises Limited and Diverse Development Limited in the amount of millions of dollars. Both are companies allegedly affiliated with U.S.-vilified banana grower John Zabaneh. The applications passed due diligence, but shortly after Zabaneh’s banana farms were forced to close down after Fyffes pulled out under pressure from the US. Perhaps with the news of the loan to Santander, there is renewed interest in those loans. Today, S.S.B. Chairman confirmed on the record that while the loans were approved, only a very small portion was disbursed, and the approvals are on indefinite hold.

 

Douglas Singh, Chairman, Social Security Board

“There were two loans approved and no loans were approved to john Zabaneh; for the record let’s get that straight. There were two companies; one was Meridian and I can’t remember the name of the other entity…in fact, I probably have it here. I think Meridian; I can’t remember the name of the other one. One, there was a very small portion of one of those loans that had been disbursed; I think we had all the securities in place. I think it was under a hundred thousand, maybe a hundred and fifty thousand dollars of possibly a two million dollar loan and there has been no further disbursement. So Social Security, the only amounts that has been actually disbursed on those two loans is about a hundred and fifty thousand dollars. And at this point of time, any advances under those loans have been suspended.”

 

Mike Rudon

“And in terms of that hundred and fifty thousand, is that being repaid?”

 

Douglas Singh

“Well it would be under the terms and conditions of the loan. There might have been grace period during certain portions of it and it would be interest only. So that would be subject to the terms of the existing loan. But unless certain situations would change, I would believe that there would be no further disbursement under those loans. So if anybody is making statements that there were all these monies disbursed; that’s not the circumstance. I think I heard someone comment with respect to the due diligence of the S.S.B.  Should S.S.B. not be obligated to check with the Central Bank, relative to the macro-credit risk element, etc.? I think that’s a good point to a certain degree and in fact Social Security has embarked on such exercises. In fact, in March 2014, we wrote to the Central Bank of Belize with respect to the Zabaneh loans—ironically that you should bring that up—and we asked them about…it says, in which we inquire if the Central Bank of Belize would object to the favorable consideration of granting two loan facilities, those were the two loans. They responded as follows…please be informed that the Central Bank of Belize is not responsible for compliance or enforcement of any notice issued by the U.S. Treasury. We do not make lending recommendations to any institutions; such decisions are for the discretion of the Board of Directors and Management of the Social Security Board. So that pretty much puts it in its proper context in any capacity and that is actually with respect to the two loans that you asked. In fact we did consult with Central Bank and the Government of Belize if there would have been any objections with respect to the extension of loans to those two particular companies mainly because of the sensitivity.”

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