Financial Standing of Mysterious Firm in Liberia Singapore Loan Uncovered
Monrovia – In a communication making a plea for the swift passage of the controversial US$536 million loan being engineered by a makeshift Asian conglomerate, led by Eton Finance Private Limited, last week, Liberian President George Manneh Weah stated: “Honorable Pro-Tempore and members of the Senate, I trust that the Legislature will ratify this agreement, which seeks to provide employment, build infrastructure, strengthen our union, and drive our pro-poor agenda for the good of our Liberian people.”
Report by Rodney D. Sieh, [email protected]
The loan, according to the administration is geared toward the construction of a coastal corridor connection of counties’ capitals road project, via the construction of the Buchanan-Cestos City to Greenville to Barclaryville Road, the Barclayville to Sasstown Road and the Barclayville to Pleebo Road. Other roads to benefit from the loan include; the Medina to Robertsport Road and the Tubmanburg to Bopolu Road. Also to be constructed are ‘rest stops’ and ‘roadside service areas.’
According to the President’s communication to the Senate, the loan will also include the construction of a vocational training center in Greenville, Sinoe County; construction of a mini soccer stadium in Harper, Maryland County; Barclaville, Grand Kru County; Greenville, Sinoe County, Cestos City, Rivercesss County; Zwedru, Grand Gedeh County, Robertsport, Grand Cape Mount Count and Bopolu County.
The principal amount of the loan is said to be payable in 15 years by level payment at an interest rate of 1.46 percent per annum, with a seven-year interest and principal free grace period.
Both the International Monetary Fund and the World Bank have previously advised against borrowing above the country’s budget ceiling.
At the end of a recent meeting to Liberia, an IMF delegation wrote: “Debt levels have been rising steadily in recent years. While the risk of debt distress remains moderate, borrowing space has clearly been reduced over time. Looking forward, future obligations will need to be undertaken with caution, specifically with respect to securing favorable terms and conditions.”
Still unclear in the loan arrangement from a private entity, is what will Liberia be given up in return. It is a question many are hoping members of the Senate will put before Public Works Minister Mabutu Nyenpan when he appears before them this week.
The president’s communication also noted that contractors for the projects have already been identified as the JVC or Consortium Comprising MAEIl Liberia Construction Co., Ltd a major Chinese Engineering, procurement and construction company and subcontractor(s) comprising Liberian-owned and operated construction and engineering company(ies), all to be vetted and confirmed by the Ministry of Public Works in respect of their technical capacities.
Last Thursday, the Senate voted to instruct its committees on Judiciary, Lands, Mines, Energy and Natural Resources and Ways, Means and Finance to jointly investigate the loan document and come up with a suggestion for the instrument to be passed.
In a motion filed, Senator Milton Teahjay(Unity Party, Sinoe County) moved that the first reading of the document constituted the second reading and that the document be sent to the relevant committees to work with the House’s Committees to recommend suggestions in seven days.
Smoke & Mirrors – The Elton Finance Fiasco
While the administration has been shy in making a Memorandum of Understanding recently signed with the conglomerate public, FrontPageAfrica has now come in possession of several documents including Eton’s tax filings and request from a Strike Off as well as full financial records out of Singapore, which provides more details on the company’s financial history and standings.
The 2016 Annual Return of Eton Finance Private Limited lodged with the Accounting and Corporate Regulatory Authority (ACRA), an Agency of the Singapore Government, on February 5, 2016, reveals shocking and frightening details about the company purporting to be arranging a US$536 million loan for Liberia.
Eton Finance Private Limited, with registered Office Address located at 2 Balestier Road #4-665 Balestier Hill Shopping Center, Singapore 320002 and with Unique Entity Number 200510984K, declared in its 2016 Annual Return that it was “Dormant (for the entire financial period)”. The Directors of the company further made the following statement, “that the company has been dormant for the period from the time of its formation or since the end of the previous financial year, as the case may be”.
Elton Finance Private Limited was registered as an “exempt private company limited by shares”. The amount of “paid-up share capital” was $1,000 Singaporean Dollars which is equivalent to $750.00 United States Dollar. The Total 1,000 Ordinary Shares are divided among the company’s three shareholders.
Kono Shigesato, a citizen of Japan with passport number MN9303435, with 900 ordinary shares
Paul Stephen Widlak, a citizen of the United States with passport number 212211611, with 50 ordinary shares and Patrick Koh Ley Boon, a citizen of Singapore with ID Number S7617689B, with 50 ordinary shares.
Elton Finance Private Limited listed as its directors the following individuals: Yen Keng-Cheng, citizen of Taiwan, passport number 211322644, Director, Appointed on April 24, 2013; Kono Shigesato, citizen of Japan, passport number MN9303435, Director, Appointed on August 10, 2005; Patrick Koh Ley Boon, citizen of Singapore, ID number S7617689B, Director, Appointed on August 10, 2005 and Yamano Kenji, citizen of Japan, passport number TH7794716, Director, Appointed on March 2, 2010.
‘Application for Striking Off
Elton Finance Private Limited stated as its primary activity, “Other Investment Holding Company (SSIC Code 64202) and lists as secondary activity “General Wholesale Trade (including general importers and exporters) (SSIC Code 46900).
On September 5, 2016, seven months after it declared in its Annual Return that it was dormant since its formation, Elton Finance Private Limited with the unanimous consent of all the Directors of the Company and all the shareholders of the company filed an “Application for Striking Off” under its Unique Entity Number 200510984K, essentially delisting and/or dissolving itself as a company. The reason given by the company in its dissolving is “company has not commenced trading since the date of incorporation”. The company claimed further in its “Application for Strike Off” that the company a) has no outstanding tax liabilities owing to the Inland Revenue Authority of Singapore (IRAS) and is not indebted to any other Government Agency; b) is not involved in legal proceeding within or outside Singapore and c) has no existing assets and liabilities as at the date of application and no contingent assets and liabilities that may arise in the future.
Formations Direct, which provides formation services to the accountancy and legal professions explains that an application for Strike Off or dissolution is usually voluntary by the members (shareholders) if they have no further use for the company. “Under section 1000 of the Companies Act 2006 (652 of the Companies Act 1985) the Registrar of Companies at Companies House may remove the company from the register (striking off) if he or she has reasonable grounds to believe that no business is being carried on. Typically this could be due to a failure to submit an annual confirmation statement form CS01 or file accounts on time. A common cause of companies being struck off is due to a change of registered office address that is not notified to Companies House.”
Liberia Deal Prompts Application for Re-Entry
Interestingly, on May 7, 2018, this year several weeks before the Liberia Loan arrangement, Eton Finance Private Limited re-applied to the Accounting and Corporate Regulatory Authority (ACRA) to be reinstated under the same name and Unique Entity Number, 200510984K, and re-naming the same shareholders and directors (Receipt Number ACRA180507174296).
A FrontPageAfrica query of the Singaporean Business Registration Portal (www.bizfile.gov.sg) using the Unique Entity Number obtained from the Eton Finance Private Limited, 200510984K, shows that the company status is still listed as “Struck Off”, raising more questions about their capability to raise the money for the Liberia loan.
What is even more shocking for many industry observers is the mystery surrounding a company that once declared that it was domiciled and dormant since its incorporation; has no assets and liabilities, did not do any business and thus has no experience in arranging loans of any kind and is currently dissolved in Singapore will be allowed to enter into an MOU with the Weah government for a loan of $536 million United Stated Dollars against the advice of the IMF and other International Partners.
Symptoms of Elenlito
The move is reminiscent of another controversial arrangement in the previous administration of President Ellen Johnson-Sirleaf where a little-known Israeli company, Elenilto managed to secure a multi-million deal for Liberia’s entire Western Cluster belt.
At the end of the day, the controversial company used Liberia as a bargaining chip to enhance its image as a concession giant and walked away with US$123.5 million after selling its interest to Sesa Goa, a unit of Vedanta Resources.
In May 2013, the Sirleaf administration, which was keen on attracting foreign investment, after a troubled past in which resource deals and blood diamonds helped to fuel a devastating 14-year-civil war, sanctioned a report, by London-based accounting firm Moore Stephens.
The audit found that almost all the concessions awarded by the government since 2009 were not compliant with the law.
The report found that only two out of 68 resource contracts worth $8bn (£5.1bn) were conducted properly. Concessions granted in agriculture, forestry, mining and oil – including a lucrative deal with oil company Chevron – were either wholly or partially flawed.
Comparisons are now being drawn with the current administration which has been under immense pressure to exercise transparency and accountability amid calls for President Weah to take the lead in declaring his assets.