Capitol Hill — A 10-year contract signed by the Coalition for Democratic Change (CDC) led-government of former President George Manneh Weah and Medtech Scientific Liberia Limited has been characterized by gross violations of the Public Procurement and Concession Commission (PPCC) and Public Financial Management (PFM) Laws of Liberia, leading to the unofficial diversion of the country's share of funds being collected under the agreement.
In July 2021, the immediate past government signed a contract with MEDTECH to conduct Destination Inspection (DI) of containers and to provide Verification of Conformity services at the Freeport of Monrovia.
The company replaces BIVAC whose contract with the government expired in July 202, but the leadership of the Senate established an Ad-Hoc committee to launch a probe into two significant contracts with implications on commerce and industry, and therefore the economy including the Destination Inspection (DI) services provided by MedTech Scientific Limited, and the Container Tracking Notes (CTN) services offered by Global Tracking and Maritime Solutions (GTMS), Incorporated.
The objectives of the review were to ensure transparency by confirming that all processes related to the contracts were carried out transparently and in compliance with Liberian laws and regulations, evaluating the service provider's adherence to the contractual terms and the services' effectiveness, and reviewing the financial transactions associated with these contracts to ensure proper management and disbursement of funds, amongst others.
The Senators' action to launch a probe and review the contracts stemmed from two separate communications from the Committees on Public Accounts and Commerce and industry signed by Amara Konneh, Alex Tyler, Dabah Varpilah, Jonathan Sogbie, Edwin Snowe, Nathaniel McGill, Crayton Duncan, Abraham Darius Dillon and Albert Chie of Gbarpolu, Bomi, Grand Cape Mount, River Gee, Margibi, Sinoe, Montserrado and Grand Kru respectively.
In its findings, the ad-hoc committee, headed by Senator Amara Konneh of Gbarpolu County highlighted the materiality of the transactions and processes that characterized the initiation and execution of the procurement and financial management of the services of MedTech Scientific Limited during the period under review.
It pointed out that there is no evidence of the establishment of the LRA Concession Committee as called for under Section 77 of the Public Procurement and Concession Commission (PPCC) Act, but there was only a joint ministerial meeting minutes attended by authorities of the National Investment Commission (NIC), Ministry of Justice (MOJ), and the (LRA).
It pointed out that it could not also establish evidence of the submission of a request by the LRA for the initiation of the concession process according to Sections 87 (3) and 88 (1) of the PPCC Act.
It maintained that there was also no evidence of a Public Private Partnership (PPP) Concession Certificate as stipulated in Section 88 (2) of the PPC Act.
The committee stated that there is evidence of a Letter (MOS-RL/NFM-COS/0701/2018) dated September 25, 2018, from the Office of the President establishing an IMCC for the DI Contract negotiations, signed by former Minister of State Nathaniel F. McGill, fulfilling Section 83 (2) of the PPCA, but there was also no evidence of LRA's Draft Procurement Plan for the concession, violating Section 79 of the PPCC Act.
It added that during the investigation, there was also no evidence of the LRA submitting a draft PPP Procurement Plan to PPCC, violating Section 79 (2) of the PPCC Act, and a draft PPP Bidding Document as required under Section 104 of the PPCC Act.
The committee recalled that on January 8, 2019, the IMCC constituted a Bid Evaluation Committee comprising representatives from the Ministry of Finance & Development Planning, National Bureau of Concessions, Ministry of Justice, Liberia Revenue Authority, Ministry of Labor, Ministry of Internal Affairs, Ministry of Commerce & Industry, National Port Authority, and the National Investment Commission in fulfillment of the Section 82 (1) (c) and 111 (1) of the PPCC Act.
It stated that evidence of evaluation of bids by predetermined published criteria and submission of bid evaluation report selected MedTech Scientific Limited as the most responsive bidder, meeting Sections 112, 113, 114 & 115 of the PPCC Act was not established.
"However, it was established during the public hearings by MedTech Scientific Limited Ghanaian partners that MedTech misled the evaluation panel by falsely presenting BIVAC's facilities and technical experience in Beirut and Mali to justify its claims of operational experience."
The committee unearthed that there was no evidence of negotiation notes of the negotiable issues with the exclusion of non-negotiable items, consistent with Sections 118 (8) and 119 of the PPCC Act.
Award and signing of DI Contract
The committee reported that MedTech Scientific Limited and the Government of Liberia (GOL) represented by the late Thomas Doe Nah, Commissioner-General of the Liberia Revenue Authority (LRA), Molewuleh Gray, Esq., Chairman, National Investment Commission, Mawine Diggs, Minister of Commerce and Industry (MOCI), and Samuel D. Tweah, Minister of Finance and Development Planning (MFDP) signed a DI Contract on July 1, 2021 that was attested to by Cllr. Frank Musa Dean Jr., Minister Justice.
According to the committee, the revenue sharing ratio was 20 percent for the GOL and 80 percent for MedTech Scientific Limited.
It disclosed that the MedTech Scientific Limited contract is well above the US$10 million threshold and subject to the granting of investment incentives (tax exemptions).
"Section 10.2 of the signed DI Contract grants tax and duties exemptions to MedTech Scientific Limited under Section 9 of the Liberia Revenue Code of 2000, necessitating Legislative ratification. The Committee could not establish that the National Legislature ratified the contract. However, in a Ministry of Justice's Legal Opinion issued on November 19, 2020, the Attorney General opined that "There are no general legal requirements for the ratification of concession agreements valued above 10 million United States Dollars." See the MOG's opinion in the exhibits."
Financial Management
Section 9 of the DI Contract calls for the establishment of a Transitory Account (TA) by GOL and MedTech Scientific Limited jointly through which payments of all fees will be made by importers and exporters.
The opening of the TA is consistent with Section 34(4) of the Public Financial Management Act of 2009 which states, "The Minister may, in agreement with the Central Bank of Liberia, authorize the opening of additional bank accounts and other accounts other domestic and foreign commercial banks, to act as transitory bank accounts to facilitate the collection of revenues and processing of payments."
The committee recalled that on July 1, 2021, the GoL, represented by the LRA, MFDP and CBL, and MedTech Scientific Limited entered into a Memorandum of Understanding (MOU) with Ecobank Liberia Limited for the opening of the TA consistent with the DI Contract.
Contrary to Section 9 of the Contract and the MOU, the committee disclosed that the LRA instructed MedTech Scientific Limited, in a letter dated February 2, 2022, signed by the former Commissioner-General to open a separate bank to manage the GOL's 20 percent revenue on its behalf to fund LRA's capacity building activities outside of established GOL public financial management framework.
"This is a violation of the Contract, the MOU, and PFM Act 2009 and Amended 2019, which states that "All funds in Revenue Transitory Accounts be transferred daily, and bank reconciliations be done once every month to avoid errors in transmitting these transitory accounts." The risks associated with not transferring and reconciling the transitory account, in this case of MedTech, are non-detection of errors, omissions, misstatements of transactions, misappropriation of GOL funds, and potential fraud that could lead to MedTech Scientific and LRA's management failure to fully account for all transactions."
No financial report
The Committee reported that it was unable to receive a detailed financial report for the execution of the DI Contract and received no evidence of payment of GOL's 20 percent share to the Transitory Account.
It added that it was also unable to receive performance reports for the period since the DI Contract was consummated, and no administrative note from LRA regarding the procurement process.
Ownership Transparency
The Committee maintained that it could not also establish the domestic ownership of MedTech Scientific Dubai from their representatives in Liberia.
"MedTech, in their response through their law firm HPA (attached) , referred us to its parent company MedTech Scientific Dubai, a registered company in the United Arab Emirates."
However, the committee stated that MedTech Scientific Dubai is a foreign company, and it is stated in the contract that they would utilize a local Special Purpose Vehicle (SPV), MedTech Scientific Liberia Ltd, as operator of the contract in Liberia.
"This would then be the local company that is operating the contract. MedTech did not provide business registration documents for MedTech Scientific Liberia Ltd. The Committee was, however, able to obtain the ownership information for MedTech Scientific Liberia Ltd, the SPV for the execution of the DI Contract in Liberia, through the Liberia Business Registry, which caused significant delays in our investigation."
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
According to the committee, one of the documents submitted only established that MedTech Scientific Liberia Ltd. was incorporated on August 3, 2018, with 100% ownership by Abdodakpi Agnes, a Ghanaian national with code N8299 (other business support service activities) and Business Registration Number 052109795.
The committee disclosed that it later discovered that another company was incorporated at the Liberia Business Registry (LBR) by the name of MedTech Scientific Inspection Services Ltd for the sole purpose of executing the DI Contract while the owners of MedTech Scientific Liberia Ltd were going through arbitration to settle a dispute on financial management in Liberian courts.
"MTS Inspection Services is located at Eid Compound, Mamba Point, Montserrado County, Liberia on the 17th of November 2022 under the same business code N8299 (other business support service activities) Business registration number 051459094 with 100% ownership of MedTech Scientific Limited located in Dubai owned by a British National to perform the same function as MedTech Scientific Liberia Ltd. without a note of dissolution of the contract of the previous company awarded to perform the same services as stated in the contract. This is the point of departure from the DI Contract in addition to all the violations of Liberian laws in the contracting process and financial management."
It noted that the relevance of establishing the ownership of MedTech Scientific Liberia Ltd, the SPV, was to help the Committee understand the company's corporate governance structure as well as why the operating company was changed from MedTech Scientific Liberia Ltd to MTS Inspection Services in clear violation of the terms of the contract.
The Committee pointed out that it repeatedly reached out to Mr. Ramsi Abou-Hassan, owner of MedTech Scientific Dubai, a shareholder in MedTech Scientific Liberia Limited which is the primary party responsible for executing the agreement with the Government of Liberia.
Despite numerous efforts, the committee recalled that, the individual remained uncooperative and unavailable, citing medical reasons and making it impossible to obtain critical testimony and documentation necessary for a comprehensive review., noting that, "Mr. Abou-Hassan's action obstructed the Committee's work, causing delays in concluding our work."
