General News of 2013-12-02

Mahama never stopped Merchant Bank from recovering loan from brother – Ayariga

Information Minister, Mahama Ayariga has denied claims the president prevented Merchant Bank from recovering a debt owed it by Engineers and Planners, a company owned by Ibrahim Mahama, brother to the president.

“There was no attempt by the president to stop Merchant Bank from recovering its loan from Engineers and Planners” he stressed.

Mahama Ayariga’s comment comes after it emerged that officials of Merchant Bank were questioned by President Mahama as they attempted to recover a debt of 38 million dollars from Engineers and Planners.

This was after lawyer for Engineers and Planners, Tony Lithur, petitioned the President on July 4, 2012 to intervene on behalf of the company. The Presidency then demanded explannation from the Board of the Merchant Bank on their loan recovery activities, especially in respect of Engineers and Planners.

The Bank's board in a letter written to the president, a copy of which Joy News has sighted, described Engineers and Planners' debt as too substantial and has to be recovered. The letter said the debt constituted 30 per cent of its 50 per cent non-performing loan portfolio.

The board, in that same letter, also referred to various meetings its chairperson had with President John Mahama and his predecessor, the late President John Mills explaining why they had to recover the debt and more importantly why they refused to release more funds to Engineers and Planners.

With the imminent sale of Merchant Bank to Fortiz who have promised to recover only 30 per cent of debts owed by Merchant Bank, critics are accusing the presidency of scheming to have Fortiz take over Merchant Bank so that 70 per cent of all debts, including the ones owed by Engineers and Planners would be considered as bad debt.

Joy News has also intercepted documents suggesting the presidency intervened in the loan recovery activities by Merchant Bank.

But speaking on Joy FM’s Top Story Monday, Mr. Ayariga explained that President Mahama only intervened in the matter because lawyers of Engineers and Planners petitioned the presidency and not because the debtor is his brother.

He added that, lawyers of Engineers and Planners believed the erstwhile Kufuor government unfairly varied the terms of the loan and so they sought an intervention at the presidency but nobody gave a directive to Merchant Bank not to recover their loan.

“The president will not be an obstacle in any banks way in retrieving loan from people who have taken loans from them not even if they are his brothers” he noted.

The Information Minister noted that Engineers and Planning could not pay back the loan because the terms of the contract were varied by the erstwhile Kufuor administration for political reasons.

He described as unfortunate how the issue has been blown out of proportion when in fact the president’s brother is not the only one owing the bank.

“People are trying to personalize and misrepresent this whole Merchant Bank transaction in relation to this loan the president brother took during the New Patriotic Party (NPP). Merchant Bank has so many people who have taken loans and have not been able to repay, why are we not talking about all those people?” he quizzed.

Mahama Ayariga assured lawyers of Engineers and Planners are working around the clock to repay the loan.