A prominent Freetown lawyer, Yada Williams has challenged the Governor of the central bank of Sierra Leone, Sheku Sambadeen Sesay over appointments he made during the recent court case involving the top management of the Sierra Leone Commercial bank. Dated 5 August 2013 the letter, which follows, has only just been leaked:
The Governor
Bank of Sierra Leone
Gloucester Street
Freetown
Dear Sir,
RE: APPOINTMENTS OF MANGING DIRECTOR & CHIEF RISK OFFICER OF THE SIERRA LEONE COMMERCIAL BANK LTD.,
I refer to the Bank of Sierra Leone public notice dated 9th July, 2013 published in the Awareness Times Newspaper in regard the appointments made by you of Mr. Idrissa Amadu Kamara and Mr. Mohamed Sajoh Bah as Managing Director and Chief Risk Officer respectively of the Sierra Leone Commercial Bank Ltd. While I hold no brief for neither the Sierra Leone Commercial Bank Ltd. nor its former Managing Director, Crispin Deigh, and deputy, I am however compelled as an officer of the law to respond by analysing the legal implications of your decision.
I note the gravity of the allegations which have triggered the on-going investigations into the fiscal activities of the Sierra Leone Commercial Bank Ltd. and applaud your good self, the Central Bank and the Sierra Leone Police in treating the allegations with the prompt and requisite measure of seriousness. I subscribe to the fundamental principles of corporate governance coupled with the need to promote a safe and sound banking system and to provide an appropriate level of protection for depositors’ interests and also to ensure that a bank’s fiscal transactions are not riddled with precarious activities. Hence the views expressed herein are not an attempt or calculated to deflect attention from the severity of those allegations bordering on pecuniary crisis.
I note that the recent appointments to the positions of substantive Managing Director of the Sierra Leone Commercial Bank and Chief Risk Officer by you as the Governor of the Central Bank were made pursuant to Section 36 of the Bank of Sierra Leone Act 2011 to wit:
“The Bank shall be responsible for the regulation, licensing, registration and supervision, including the imposition of remedial measures and administrative sanctions, of commercial banks and other financial institutions in accordance with this Act or any other enactment”.
With all due respect to you Sir, I disagree with your remotely wide interpretation of Section 36 pursuant to which the said substantive appointments were made. It is my view that this provision is inherently vague and should not be the legislative raison d’être for such appointments especially where there are express provisions in the Banking Act of 2011 in regard the Central Bank’s role in emergencies at any commercial bank. The inherent danger in the employ of such wide provision is that it could potentially lead to you arrogating unnecessary or unwarranted powers to yourself or a floodgate of unlimited appointments or decisions by you and/or the Central Bank.
In the premise, I wish to refer you to Section 52 of the Banking Act, 2011, under the rubric ‘Banking Emergencies and Liquidation’ to wit:
“(1) The Central Bank may appoint a conservator to a bank
if–
(a) the Central Bank determines that the bank has violated a provision of this Act or a direction issued by the Central Bank, or has engaged in any unsafe and unsound practices, in such a manner as to weaken the bank’s condition, seriously jeopardize depositors’ interests, or dissipate the bank’s assets;
(b) the Central Bank has reasonable cause to believe that the bank or its executive officers have engaged or are engaging in criminal activities punishable by imprisonment of one year or more, in a manner to jeopardize depositors’ interests;
… or
(g) the operations of the bank pose a risk to the financial system”.
Section 52(8) further provides that the total period of the conservatorship shall not exceed one year.
It is my view that what you ought to have done if you concluded that the Sierra Leone Commercial Bank Ltd. had violated the provisions of the Banking Act 2011 in the manner specified was to have appointed a conservator at the Sierra Leone Commercial Bank Ltd. to perform the roles specified in Section 52(6) of the Banking Act, 2011 which inter alia includes the following:
“During the term of conservatorship, the conservator shall–
(a) take any actions that are necessary or appropriate to carry on the business of the bank and preserve and safeguard its assets;”
It is my view that the appointments of a substantive Managing Director and Chief Risk Officer at the Sierra Leone Commercial Bank Ltd. rather than a conservator lacks proper statutory justification, hence inappropriate and unlawful considering those specific provisions in the Banking Act. It is a cardinal principle of law that generally express or specific provisions of law should take precedence over general provisions hence it would be unlawful and/or improper to employ general provisions of one statute disregarding specific or express provisions in another enactment. The use of Section 36 of the Bank of Sierra Leone Act 2011 as the basis to make such substantive appointments at the Sierra Leone Commercial Bank Ltd. displaces the role of the board of directors and could be a recipe for chaos if not immediately discouraged, resisted and overturned. Whereas the impugned appointments might not evoke substantial disapproval since the Sierra Leone Commercial Bank Ltd. is a government entity, it is my fear that if such appointments remain unchallenged, it could serve as a precedent which could be used against any privately-owned bank in the country.
It is my candid view therefore, that if the Central Bank is purporting that the Sierra Leone Commercial Bank Ltd. has not complied with the law in regard credit risk exposure or general financial systems at their bank, you as the Governor of the Central Bank must also ensure that your actions are in compliance, lawful and resonate with the spirit and intendment of the law. Apart from the conservatorship provisions in Section 52(1) of the Banking Act 2011, there are other enforcement measures in section 46 of the said Banking Act which do not include appointing substantive managing director or any other executive officer, that the central bank could undertake in instances where, in the opinion of the Central Bank, a director or any executive officer or the bank has engaged in unsafe or unsound banking practices.
I would therefore implore you Sir, to reconsider the said appointments and in the future consider using the appropriate provisions which are contemplated by the law to bring sanity and stability at any commercial bank during emergency crisis.
Yours faithfully,
Yada Hashim Williams.
Cc: The Secretary to the President
The Chairman, National Commission for Privatization.
The Managing Directors of Commercial Banks.
Mr. Idrisa Amadu Kamara.
Mr. Mohamed Sajoh Bah.
The Chairman Board of Directors, Sierra Leone Commercial Bank Ltd
Editor’s Note:
Politico contacted the Governor of the central bank, Sheku Sambadeen Sesay for his reaction to the above letter. He said that he did respond to it denying any wrongdoing. We hope to be able to bring you his reply in our Thursday edition.
(C) Politico 22/10/13
