Guaranty Trust Bank (GT Bank) Liberia has documented how it was compelled to reverse multiple financial transactions after Liberian businessman Cllr. George Kailondo complained that thousands of dollars had been siphoned from his account at GT Bank.
Through a communication dated 28 June 2021 and addressed to Cllr. Kailondo’s lawyer, Dr. Jallah A. Barbu, GT Bank said it reversed the transactions of US$50,000 and US$62,500.00 it debited on Kailondo Petroleum (KP’s) account due to the absence of duly signed Letter of Credit (LC) Agreement and the Offer Letter.
In the communication, GT Bank Liberia said it has been unable to trace copies of the LC Agreement and Offer Letter regarding how money has been siphoned from Cllr. Kailondo’s petroleum firm account in the tune of US$50,000.
The bank’s decision to reverse these transactions followed Kailondo’s complaint which was filed with the office of the Solicitor General of the Republic of Liberia on 15 June 2021.
GT Bank noted that following Cllr. Kailondo’s complaint, the Solicitor General convened two conferences with the Bank and the Kailondo Petroleum.
The last conference ended on a request by the bank for ample time to thoroughly review its internal records and provide a more detailed response to the complaint.
The bank said it reviewed its internal records and obtained confirmations requested from some of the parties to the Letter of Credit transactions, including one of its confirming banks-Banque de Commerce et de Placements (BC) of Geneva, Switzerland.
Based on the review concluded, the bank said it acted on a “without prejudice” basis to accept responsibility for records not currently available in responding to each of the material claims contained in KP’s letter of 22 May 2021.
“Despite diligent search, the Bank has been unable to find copies of the LC Agreement and the Offer Letter in connection with which it charged KP’s account with the amount of US$50,000.00 … as 2% commission on the value of the LC amount,” GT Bank wrote.
The bank believes that the transaction was legitimate, and the charging of the commission was not arbitrary.
However, it argued that based on requisite authorization at the time, the absence of the duly signed LC Agreement and the Offer Letter leaves the bank with very little option but to reverse the transaction and credit KP’s account with the corresponding US$50,000 debited.
Additionally, the bank said it did not succeed in finding copies of the LC Agreement and Offer Letter for the LC in respect of which it charged KP account US$62,500.00, representing 2.5% commission of the LC amount of US$2.5m.
GT Bank insisted that it firmly believes that the transaction was legitimate and supported by the required authorization at the time of the execution.
Notwithstanding, GT Bank said in the absence of the duly signed LC Agreement and the Offer Letter, it was left with very little option but to reverse the transaction and credit KP’s account with the corresponding US$62,500 debited.
Cllr. Kailondo and GT Bank have been in a case in which the bank has accused him of owing US$1.2m debt. But Kailondo has accused the bank of defrauding him instead.
Court documents filed by GT Bank on 29 September 2017 indicated that the bank entered into a Novation Agreement with Kailondo for the latter to pay the full of amount of ACE Global, a collateral management agency’s financial obligation to the bank under a Collateral Management Agreement entered into by Kailondo Petroleum and GT Bank Liberia in the tune of US$791,458.21.
In that case, the bank alleged that Kailondo failed to make payment, leaving it with no option but to institute an action of debt to compel Kailondo Petroleum to pay the amount of US$1.2m which includes other charges and penalties.
But Kailondo has fought back, accusing the bank of trying to defraud him.
He said he demanded an audit to establish whether he owed that amount because he had already initiated payment on the US$791,458.21 in the tune of over US$414,000.
With that alleged payment, he insisted that he should have been left with the amount of US$377,000.