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BANK GOVERNOR & FINANCIAL SECRETARY

Lebanese Blackmails for 30-Yr Debt

Whether it is out of financial frustration or desperation to intimidate and cow the current political administration to succumb to his financial demand in the sum of Thirteen Million Dollars for the supply of unverified materials and equipment allegedly used for the construction of water supply stations to the various provincial towns in the country or genuinely demanding legitimate payment remains completely absurd.

Lebanese born Mouffic of the International Construction Company (ICC) could be described as an individual who has unfortunately found himself in a state of “day dreaming” that has subsequently resulted into calculating his profits and losses. Seeing himself in such a predicament he assumed that his losses could be recovered through the effort of blackmailing the Financial Secretary, Mr. Edmund Koroma and the Governor of the Central Bank, Mr. Sambadeen Sesay and presents the current Ernest Bai Koroma administration to the public as a celebrated and notorious debtor.

Mr. Mouffic’s allegation of supplying the political administration of the 70s with construction materials and equipment for water stations in the provinces had left many critical minds in a state of doubts and shocks considering the fact that there is succession in governance and the APC Government was sent out of the political wilderness for over fifteen years.

It was during the absence of the APC Government of the late Siaka Stevens and Joseph Saidu Momoh that he claimed to have supplied those materials and equipment for which he is now demanding payment in the 21st Century.

In his allegation, he claimed that promissory notes were issued to him by the Government in power by then that awarded him the contract, but has failed to explain why he did not demand payments from the NPRC and SLPP, but waited for the APC to assume the political leadership of the state?

It may appear that for the past twenty to thirty years, the Lebanese born had kept the promissory notes in a special suitcase and patrolling with it between Lebanon and Sierra Leone, waiting for the return of the APC to State House.

According to sources close to Mr. Mouffic, he has deemed it comfortable to attack the APC party and further threaten a civil suit against its key players. He may have estimated the political strength of the party and has concluded that he can subdue the current political administration into any form of embarrassment for payment that is raising several doubts.

The unverified materials and equipment that Mr. Mouffic is claiming legitimate payment for may have been fulfilled through the “debt-by-buyback”, a scheme launched by the World Bank at the time when Mr. Samura Kamara was the Country’s Financial Secretary.

What apparently may have propelled Mr. Mouffic into raising a false alarm is news about the visit of World Bank officials to Sierra Leone anytime from now and presenting the Government in a bad light would imagine will be an advantage to him.

Promissory notes. What is it all about?

A promissory note is a formal contract between parties. It is a written, signed and unconditional promise to pay a certain amount of money on demand at a specified time or over a period of time. A promissory note is used to memorialize a promise to pay a sum of money by a future date in exchange for a loan or various financing at present. The individual who promises to pay is the maker and the person to whom payment is promised is called the payee or holder.

For example, if two people enter into a promissory

note, the maker and holder each have legal obligations to perform certain duties under the contract. Typically, the maker will borrow money

from the holder, and will have a payment schedule

detailed within a promissory note to return the

money loaned to the holder at a later date.

A promissory note can be either secured or

unsecured. A secured promissory note is one that

specifies collateral securing the amount loaned

to the note maker (the borrower). This means

the holder (lender) protects his interest in the

borrowed money by loaning money to the maker

against the maker’s collateral. For example, if the

maker (borrower) owns a piece of property, the

holder (lender) can loan the maker money and,

in addition to the promissory note, requires the

maker (borrower) to grant the holder (lender) an

interest in the property until the promissory note

is satisfied (i.e. the maker fully pays his/her debt with

the holder). If the maker fails to pay according to

the terms of the promissory note, the holder can

foreclose on the property that secured the note,

thereby recovering the unpaid principal of the

note, interest, fees and expenses. An unsecured promissory note is one that is not secured by any collateral. With this type of promissory note, the maker borrows money from the holder without relinquishing any interest in his property. The holder’s recourse in the event of non-payment will be through the debt collection process. A promissory note may contain other terms such as the right of the holder to order payment be made to another person, penalties for late payments, a provision for attorney’s fees and costs if there is a legal action to collect, the right to collect

payment in full if the note is secured by real property and the property is sold (“due on sale” clause), and whether the note is secured by a mortgage or deed of trust or a financing statement (a filed security agreement for personal collateral).To avoid potential liability, it is important to consider whether the loan transaction falls within state securities and

regulations. Whether a promissory note is a security is a complicated legal question. The answer will involve an assessment of the investment scheme of which the promissory note is a part. When seeking investments or loans in the form of promissory notes, businesses should consult legal counsel to be sure that their plan either would not be considered a security or whether an appropriate exemption from state rules

would apply. Generally, promissory notes are presumed to be securities, especially when they are not secured with collateral. Remember, the general intent of securities regulation is to provide anti-fraud protections for members of the public contributing capital.

Does a promissory note have to be recorded?  Generally, a promissory note does not have to be recorded.

Who must sign a promissory note?  All borrowers must sign.  The lender is generally not required to sign but may sign.

A negotiable instrument is a check, promissory note, bill of exchange, security or any document representing money payable which can be transferred to another by handing it over (delivery) and/or endorsing it (signing one’s name on the back either with no instructions or directing it to another). A negotiable instrument is a contract and subject to the rules governing contract law. However, a negotiable instrument may be distinguished from an ordinary contract by the fact that a negotiable instrument may be written in a way that makes it transferable. This quality of negotiation generally allows the instrument to be used as a substitute for money by holders in due course, despite the defensive claims between the original parties who drafted the negotiable instrument. In order to be negotiable, the bill or note must be payable to order, or to bearer. Some promissory notes contain a clause making them non-negotiable.

Quite simply, a promissory note is a promise to pay or IOU. It is a formal commitment (also known as a loan agreement or contract) between two parties that is usually necessary when money is borrowed and lent between them. All business loans secured from a bank or other lending institution have some sort of promissory note, but they are also recommended for loans between two individuals (even if the loan is between family members or close friends) to avoid any misunderstandings or possible legal troubles.

A promissory note should have several essential elements, including the amount of the loan, the date by which it is to be paid back, the interest rate, and a record of any collateral that is being used to secure the loan. Other interest-rate options, like discounting or compensating balance requirements, can also be included. When the promissory note is discounted, the interest is taken off the principal amount at the beginning of the loan. The borrower pays back the entire amount, even though he only received the principal minus the interest. This practice is not very common because it is a higher effective rate of interest than the stated rate for the borrower. A compensating balance is usually required for large loans or lines of credit. It requires that the borrower maintain an account with a specified minimum level account balance at the lending institution (usually a bank). This account balance earns little or no interest and also raises the effective interest rate of the loan.

When signing a promissory note, both the lender and the person receiving the loan should be fully aware of the note’s language. One obvious way to do this is to read the promissory note carefully and in its entirety before committing a signature to it. If there are any questions or confusion regarding the contents of the promissory note, a certified public accountant or lawyer should be called upon to make sure everything is understandable.

Another point that businesses may want to consider when drafting a promissory note is what to do in case the business does not succeed. If the business is a corporation or limited liability company, it should be determined if the corporate shareholders or limited liability members will personally guarantee the loan. If this is not the case, they have no personal legal obligation to repay the loan in a worst-case scenario.(See next edition and read how Mr. Mouffic is trying to implicate the Attorney General and Minister of Justice, Mr. Frank Kargbo and other questions the editorial board may wish to ask. What type of promissory note that was issued to him? What are the terms contained on the promissory note?

 

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