Questions to banks

Dear Sir Last week, I was able to purchase a copy of the Central Bank (CB) 1996 annu al report and its quarterly report ending March, 1997 at $lO each. Before going to the CB Office, I did presume that, as a Solomon Islander, I’d be given a free copy of this report so I could fully understand the true financial situation of our country. I was mistaken. Anyway, what’s $20.00 for these two reports if, by reading them, I can find out the actual reasons why: • as a landowner with a felling licence to export almost 60,000 cubic metres of round logs per year, valued approximately at $26 million per year, I was declined by three commercial banks when I sought financial assistance from them to finance my intention to purchase logging equip ment for less than SSI2 million (not men

tioning the fact that I have over SUS 2 mil lion in letters of credit from my overseas buyers to ship to them around 13,000 cubic metres of round timber logs); • last week, when I asked one of the banks to issue an international bank draft in US dollars in favour of an American publisher as payment for some trade books I’m trying to order by mail, the bank insist ed that the SUS2OO (in US dollar notes) I had on hand would have to be converted first to Solomon Islands dollars (at a rate of $513.48 to SUSI) then purchase US cur rency (at a rate of $513.71 to SUSI) plus a SSI3B bank fee so they could issue the bank draft. I realised that for this small transaction alone, I was losing $510.23 to every SUS 1 which I already have, or a total of SSI46, excluding bank fees.

I understand that the current CB rate is an average of $513.36 to SUSI for the last three years. So, these commercial banks already cheated and robbed me of $510.15 for every SUSI I have in my personal pos session. I’m wondering if these banks will report such earnings in their books and income statements.

Several years ago, I met a banker from Asia who told me: “Don’t ever think that piracy has been eradicated in this time of modern history. Bankers are the elusive pirates that will fleece you naked of your hard-earned monies.” I didn't believe him then, but since I heard about the roles played by Swiss bankers in hiding those deposits/assets rightfully belonging to the Jewish community during the WW 11, I really began wondering if those bankers I usually meet in downtown Honiara are among the latter days pirates and white collar conrnen. After reviewing both of the mentioned CB reports, I discovered that the three commercial banks in the country as of March 31,1997 had combined; • total assets of $81409,282,000; • total liabilities of $81377,055,000; and • total capital and reserve of $8132,227,000.

Meanwhile, according to the CB, the; • foreign exchange receipt (one year to March 31,97) was $81988,436,000; and • foreign exchange payment (for the same period) was $51954,216,000.

These foreign exchange (forex) transac tions are not fully reported by these banks.

Thus, I asked myself if local ’shell money' bank in Auki, Malaita Province, is now the one handling all of our country's forex

transactions? Based on my previous expe rience, these banks are supposed to earn: • income on forex receipts of $5142,605,000; • income on forex payments of $5163,066,000; or • a total combined income of $81105,671,000.

This income is only for their forex transactions. What about their earnings on loan fees and interests, and other charges?

ANZ Bank and Westpac Bank never provide a copy of their annual report to the general public of their operations in the country except a consolidated report of their holding company operations around the world wherein their Solomon Inlands operations are not reflected individually as it was grouped together with their other branches within the Asia-Pacific region.

NBSIL provided me a copy of their 1996 annual report - and it’s really quite surpris ing to leam the following: • interest income - $818,443,942; • forex earnings - $814,977,515; • other non-interest income - $514,102,089; and • total assets - $81229,101,399.

I understand that NBSIL is almost the same size as the total combined assets of both Westpac and ANZ banks. So, assum ing that both Westpac and ANZ have the same forex earnings as the NBSIL at a total average of SSI 10 million, what happened to almost SSI9O million in forex earnings that these three commercial banks were supposed to be earning last year? The gov ernment losses runs to about SSI3O million in uncollected taxes on this hidden income - income that is badly needed to increase the government financial resources. Is there anybody out there who can explain to me this discrepancy? Can someone in higher authority allow me to look and dig deeper into these commercial banks’ activ ities and into their account books?

NBSIL has a paid-up capital of SSI2 million but in 1995 and 1996 it paid a total of $818,500,000 in dividends to its share holders - a return of almost 425 per cent within a two-year period while poor Solomon Islanders are getting a maximum of five per cent per year on their hard earned monies. It is unfair, isn't it?

I believe that it is now the right time for the new government to initiate an investi gation into these commercial banks.

Isn't it time that the government nation

alise these commercial banks - in order for Solomon Islanders like me to get the nec essary assistance to start my logging oper ations, which are a forex earner? Those

foreign companies operating in the country

are not forex earners as they continuously send their earnings to their mother coun tries overseas.

I hope and urge the government to have these banks open their books of accounts to the proper incorruptible officers and have them audited - not only for the last year but since they started their operations - to find out how many billions of dollars they fleeced from our country.

I challenge the new govemmlent to have this matter taken as a national priority and fully investigate if they really want to have changes in the country’s economy.

Establish a commission of inquiry immedi ately into this matter and let us all work together for the betterment and upliftment of our country and of our people so that in the days to come we can tell our children that during the start of Prime Minister Bartholomew Ulufa’alu’s term, we, the people of the Solomon Islands, were able to take our country to prosperity.

I will much appreciate it if you publish this letter in order for our new government to realise that out there in the vastness of Solomon Islands are people who care.

Andrew Lagwaeano Loboi

Honiara Solomon Islands