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Aug 19, 2004

S.S.B. loans to private sector look strange

While the spectacle of Civil War in Belmopan has captivated the nation’s imagination over the last week, it is the controversy over misuse of public funds that will likely remain with us long after the last political shots have been fired.

Today, following up on discussions held Monday with Social Security General Manager Narda Garcia and D.F.C. chief Troy Gabb, we have taken a closer look at documents detailing the S.S.B. loan portfolio. While D.F.C. borrowings make up the lion?s share of the bad paper, there are some direct loans on the books to private sector parties that stand out—not necessarily due to non payment, but because of the identity of the borrowers.

One such loan, for two million dollars at ten percent interest, was granted in the year 2000 to Toledo Fish Farming Company Ltd. If the name of the business sounds innocuous, that of its owner may strike a more familiar note. He is Soren Sorensen, a businessman from Denmark, long active in the Banana, Mango and now shrimp farming industries, better known for his chronically bad labour relations and a trail of bad deals as long as the Southern Highway. How a man who most people would not loan five dollars to, could walk out of Belmopan with two million in workers? money is a total mystery? As for the preferential interest rate of ten percent, the S.S.B.?s own guidelines say the rate should be “not less than the going prime rates competitive with developmental lending agencies such as D.F.C. and N.D.F.” Those rates run in neighbourhood of twelve to thirteen percent, with the commercial banks charging fifteen to sixteen. When we asked S.S.B. General Manager Narda Garcia how this loan could have ever been granted, her only reply was that it was properly approved by the Board and Investment Committee.

Another private sector loan that stands out is one for over one point seven million to Belize Odyssey Limited, a tourism venture at Caye Caulker owned by Tony Vega Jr. This one, used to pay off a loan at a commercial bank, has been in and out of arrears and we were unable to determine what, if any, work was being done at the site to–as the D.F.C.’s Troy Gabb would say–”develop the asset.”

It should be noted that not all the questionable S.S.B. loans were granted by the P.U.P. administration. A mysterious seventy-five thousand dollar S.S.B. loan was made to Universal Travel Services in 1996. The owners, William and Jean Jeffrey, stopped paying in 1998 and today, with over fifty thousand dollars uncollected, the board is trying to foreclose on the collateral, a piece of land for which they only had a lease, and not title.

There are many more of these little gems, particularly in the dusty files of the Development Finance Corporation, but we won’t know about them until government makes good on its pledge of full financial disclosure.


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