By Arret Jatta
The managing director of Arab Gambia Islamic Bank (AGIB), Isatou Jawara, and her operations manager, Ousainou Jallow, yesterday appeared before the Local Government Commission to answer questions about the bank’s role in financing the procurement of KMC’s ‘Mbalit’ trucks.
The trucks were provided through a joint venture between AGIB, Espace Motors and a local vehicle supplier.
The top AGIB executives presented key financial documents, including the joint venture agreement, the financing application, and swift transfer records for payments made to suppliers in China.
According to them, four separate transfers were processed to cover the truck purchases, totaling D122 million and the bank’s profit margin from the deal stood at D13 million, while Espace Motors was set to receive D8 million.
However during questioning from Lead Counsel Patrick Gomez, concerns emerged over the bank’s due diligence processes.
Managing Director Isatou Jawara acknowledged that no independent financial assessment of Espace Motors had been conducted before entering into the joint venture. Rather, according to her, the financing was based on trust in the longstanding business relationship between the bank and Espace Motors, also known as Quantum.
“The project had no specific collateral though Espace Motors had sufficient collateral with the bank to cover any potential losses,’’ MD Jawara told the commission.
Operations Manager Ousainou Jallow too echoed this sentiment, stating that AGIB holds a memorandum of deposit with Quantum covering all transactions.
However, Jallow admitted that the bank management’s credit committee had not reviewed or approved the truck financing deal, and that the bank proceeded solely under the framework of its general partnership with Espace Motors.
Lead Counsel Patrick Gomez questioned the AGIB executives on why there was no formal agreement specific to the ‘Mbalit’ project and why no risk assessment was conducted.
“Was it sufficient to rely on an MoU to finance the purchase of the trucks without collaterals, no approval by the credit facility committee, no assessment, and other requirements,” he asked.
Jallow replied that due diligence was done, arguing that the bank saw Quantum as a partner rather than a regular customer.
Counsel Gomez put to it the AGIB officials that from the onset, the primary source of repayment, funds from the wards, failed to generate the necessary revenue and that AGIB ultimately had to obtain authorisation from Quantum to pursue KMC for payment.
In response Jallow conceded that the expected funds had not materialised at that time.
“If the funds were coming as expected, it would not have been necessary to follow the KMC,” he admitted.
Gomez further argued that AGIB had miscalculated the financial viability of the ‘Mbalit’ project, failing to establish a clear path for repayment.
“This is possible because there was no due diligence done,” he argued.
