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Maladministration and Political Interference of Loans by the Development Bank of Vanuatu [1999] VUOM 12; 1999.12 (13 August 1999)

REPUBLIC OF VANUATU

OFFICE OF THE OMBUDSMAN

PUBLIC REPORT

ON THE

MALADMINISTRATION AND POLITICAL INTERFERENCE

OF LOANS BY THE DEVELOPMENT BANK OF VANUATU

13 August 1999

99/12

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TABLE OF CONTENTS

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PREAMBLE

'Through hand join in hand, the wicked shall not go unpunished'.

Proverbs 11 v 21

It is very clear from the accumulated evidence that there was a very damaging absence of integrity and prudence in the activities of irresponsible officials and those in authority! Public money was dispensed in ways that everyone concerned knew were contrary to honesty, as well as to regulations.

The borrowers obviously held the Bank in contempt and treated it accordingly. Political favour was once again in evidence, as well as personal partiality and slackness. Attempts to remedy the situation were pitifully weak and inadequate.

By deliberately and systematically abusing the loan procedures using inappropriate political influence and non-repayment of loans over many years, the people involved in this report must bear the responsibility for the destruction of the Development Bank of Vanuatu (DBV), the only institution that was providing development funding to ni-Vanuatu.

The DBV has now been legally dissolved by Parliament.

Because of the irresponsible and greedy illegal actions by those leaders, the ordinary man and woman in the outer islands now has no access to such financial assistance to improve their lives by starting projects.

The irony is that many -- perhaps most -- of the political leaders who have ignored their repayment obligations for many years are now repaying following the setting up of the Asset Management Unit.

If these repayments had been enforced in the normal way at the appropriate time, this whole sad story of the destruction of the Development Bank of Vanuatu should not have happened.

SUMMARY