NASSCORP Gave Cocopa US$1.5M, Not For Campaign

3
2038
Mr. vonBallmoos: "NRI management had approached NASSCORP two years ago about the money"

Dewitt vonBallmoos, the director general (DG) of the National Social Security and Welfare Corporation (NASSCORP), has issued a correction to the Senate’s claim that the corporation funded the Liberty Party’s (LP) campaign activities in the amount of US$1.4 million under the guise of investing in the Cocopa Rubber Corporation in Nimba County.

“A few days ago, it was reported that the Senate queried an investment made by NASSCORP in the Cocopa Rubber Corporation, now Nimba Rubber Incorporated (NRI). Those reports alleged that the corporation gave a sum of of US$1.4 million to the LP under the pretext of investing in Cocopa,” vonBallmoos told journalists yesterday at his 15th Street office in Monrovia.

It is an incredible co-incidence that NRI, a company owned by Liberty Party vice-standard bearer Harrison Karnwea, has a concession agreement with the Government of Liberia to operate the Cocopa rubber plantation. Karnwea, prior to his transition to Cocopa, was managing director of the Forestry Development Authority (FDA) and a stalwart of the ruling Unity Party.  While serving as MD of FDA, Karnwea boldly broke ranks with the ruling party and joined the Liberty Party, whose standard bearer, Cllr. Charles Walker Brumskine, later named him as his running mate for the October 2017 presidential elections.

This is why many are inclined to believe that the US$1.5 million investment in Cocopa by the lucrative state-owned enterprise, NASSCORP, could be an unmistakable endorsement of the Liberty Party’s Brumskine-Karnwea campaign.

Countering the reports on the disbursement  to NRI, Mr. vonBallmoos said NASSCORP is a non-partisan entity that has no direct or indirect link to any political party, and “will never be a part of any spending that is not fiscally prudent for the survival of the corporation, least to dish out money to a political party.”

Last week, the Senate invited NASSCORP to Capitol Hill to explain how the reported amount of US$1.4 million was withdrawn and disbursed to the NRI.

The NASSCORP management responded that the entity was established to administer the country’s pension fund with the mandate to collect contributions, payout benefits and invest in institutions for the sustainability of financial solvency as enshrined in article 89.63 of both the new NASSCORP Act and Decree 14.

In fulfillment of that mandate, vonBallmoos said NASSCORP, after an authorization by its Board of Directors in August 2016, approved an investment in the amount of US$1.5 million in NRI for the rehabilitation of its Cocopa Plantation.

“NASSCORP’s investment involved the purchase of convertible debentures of NRI with a maturity of five years, which provides NASSCORP an annual interest (yield) of 12 percent on its investment,” the director-general told reporters.

He said the debentures also give NASSCORP the added advantage or option of converting the facility into common stocks in the future. The facility, he said, was disbursed to NRI in November 2016 at a ratio of 80:20, in Liberian and US dollars respectively. “The debentures are to be redeemed in full at maturity in US dollars,” the NASSCORP DG said.

Giving the background to the NRI transaction, vonBallmoos said its management approached NASSCORP close to two years ago with a proposal for financing the rehabilitation of the Cocopa Plantation, “but NASSCORP had turned down the request given the lack of clarity of a comprehensive plan for the revitalization of the rubber sector despite intervention of the government and a stimulus package for the sector provided by the Central Bank of Liberia.”

He said the need to revive the rubber sector is “critical from our standpoint as workers’ contributions to the pension scheme have constituted a significant part of NASSCORP’s revenues.”

VonBallmoos explained that a revised rehabilitation proposal from NRI, which was approved by NASSCORP in August 2016, set out four priorities, including the settlement of wage arrears; acquisition of a new modern rubber processing plant; rehabilitation of plant infrastructure; and the establishment of a rubber wood processing facility.

The NASSCORP investment, he said, was primarily used for and targeted the settlement of wage arrears owed to workers of the corporation.

“As a result of NASSCORP’s investment, which successfully abated labor unrest and brought calm to the Cocopa area, NRI has now been able to successfully arrange the acquisition of a rubber processing plant to start the processing of rubber,” he said.

VonBallmoos said as a result of NASSCORP’s intervention, the NRI’s added value through the processing of rubber is expected to significantly increase its revenue generation and further help insulate and hedge the corporation from commodity price fluctuations for raw rubber, adding, “the investment in an integrated processing facility at Cocopa made good and prudent business sense.”

 

 

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3 COMMENTS

  1. The explanation falls far short of any meaningful clarity required in the matter. There is no answer if there was any risk analysis done as part of the loan process/investment process or even if the representation by the NRI management in such a deal is enough or if, in fact, fiduciary stakeholders were involved and to what extent. Or even if the huge amount of money of investment into NRI was consistent with proper portfolio diversification. A lot of questions, a lot of doubts here.

  2. Investing PENSION FUND is always a risky business, especially in THIRD WORLD COUNTRIES. Five years from now, the ROI will be financially depressing as usual. We just imagine the number of back door discussions which led to the disbursement. Will money be available when those paying into the program reach RETIREMENT?

  3. The clarity as provided by the Director General of NASSCORP detailed a substantial and meaningful clarity required in the matter. A risk analysis was done as part of the loan and investment process with the representation of the NRI management in such a deal is enough. Even, in fact, to lend it some degree of cogency, fiduciary stakeholders were involved to that extent. We must now avoid politicizing this Economically Targeted Investment (ETI) initiated by NASSCORP and await its fruitful benefit to accrue.

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