By: Kemo Kanyi
Hon. Buah Saidy, the governor of the Central Bank of The Gambia, has given comprehensive explanation on the sale of a state-owned commercial bank, the MegaBank.
The bank was reportedly sold by the country’s apex bank in 2019. Lamin Manneh of the United Democratic Party has recently been challenging the authorities to clear the air on how this commercial bank was sold, especially its bidding processes and the amount involved.
In a recent appearance on Coffee Time on West Coast Radio, the governor stated that the bidding was on a public tender, and several firms applied to lobby for potential buyers of the bank, saying it’s not the responsibility of the Central Bank to purchase commercial banks. He explained that the apex bank seizes banks to prevent them from liquidation, refuting rumours that MegaBank was purchased by CBG and later sold to private investors.
Hon. Saidy shed light on how the bid was tendered and the interested applicants, stating that it was never done clandestinely.
“To prevent losses, the CBG in November 2014 petitioned the High Court of The Gambia for an order to seize Keystone Bank. The High Court, on December 8, 2014, granted the order. The CBG, acting in accordance with said order, reorganised Keystone Bank and obtained approval from the registrar of companies to change the name to MegaBank. After this, the CBG reorganised and had a plan that was approved by the High Court to sell the bank,” he explained.
According to governor Saidy, the CBG made several attempts to disburse the bank and privatise it, adding that in 2019, invitations for expression of interest were sent to local audit firms.
“Sahel Investment Management International, AA & Co., DT Associates and Accord Associates… The contracts committee of the Central Bank considered the bids and recommended DT Associates based on their demonstrated competence and experience. However, the fee they recommended for consultancy was high, and the CBG rejected it. Two subsequent tenders were also cancelled because both of them didn’t fulfil the Central Bank’s requirement,” he explained.
He further explained that in September 2021, the CBG received approval from the Gambia Public Procurement Authority (GPPA) to appoint DT Associates [as consultants] to provide sale services advisory on privatisation of MegaBank following a competitive bidding process, which also attracted the same bidders of 2019.
“Following an evaluation of MegaBank by DT Associates, a competitive bidding process for the sale of the bank in 2022 was done, and DT Associates received five bids, which were: Access Bank Gambia Limited, Vista Bank Group Holding SA, VFD Group PLC, Yes Brazil Bank, AfroBoard Investment/GLM Investing Consulting and Real Estate SA. This bidding process resulted in the selection of the most responsive bidder, the Vista Bank. The current shareholders of the Vista Bank Gambia Ltd through an independent assessment of the institution, the interested bidders [Vista] offered to pay D900,000,000 after discussion of the purchase agreement,” he stated, adding that conditions were laid for the potential buyer [Vista Bank] to fulfil before signing the agreement.
“That a full payment of the negotiated amount of D900,000,000 must be made by the bidder prior to the signing of the share purchase agreement, and the deadline was December 15, 2022, failure of which the transaction will be null and avoid. Unfortunately, both conditions were breached by the potential buyer, Vista Group Holding SA, when they made an initial payment of USD 5,000,000, which was equivalent to D120,000,000 at an exchange rate of D60 per dollar on December 30, 2022. They made another payment of USD 2.5 million. The CBG was informed by the consultant [DT Associates] that the terms of the contract were varied by the potential buyer due to their decision to make three different instalments,” governor Saidy explained.
He went on to explain that the consultant, DT Associates, was later instructed to commence another bidding process with a view to identifying a new buyer.
“DT Associates ran a second bidding process for the sale of the MegaBank, and this attracted bids from the following investors: KM Holding Limited, Master Financial Group, and Oakwood Africa Investment Limited. After carefully reviewing the submitted bids, DT Associates recommended CBG to explore concluding the transaction for the sale of 100% equity in the MegaBank with KM Holdings. After a protracted negotiation, the CBG, in a letter dated 12, 2023, informed KM Holdings of their successful tender for the purchase of 100% shares of MegaBank Gambia Limited. Subsequently, KM Holdings and CBG signed a share purchase agreement in which KM Holdings has since paid the full amount,” he stated.
