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Toribiong asks World Bank to scrutinize government bank

By Aurea Gerundio- KOROR, Palau (Island Times, ) – Palau President Johnson Toribiong has sought the assistance of the World Bank to review the activities of the National Development Bank of Palau.

NDBP is a wholly owned government corporation responsible for promoting economic development in the country. Its charter [says it ] is to act as a development bank and more specifically to provide financial support for new enterprise and projects promoting import substitution.

But Toribiong said in a letter to WB President Robert B. Zoellick Wednesday that allegations of serious irregularities and questionable banking transactions by the NDBP recently surfaced.

NDBP was earlier questioned for the transfer of a part of the land known as Besas back to the ownership of Midcorp when the court in Civil Action No. 10-183 entered judgment on April 1, 2011 which conveyed the entire Besas to NDBP. The bank is believed to have breached its fiduciary duty in returning the land.

Toribiong had already tasked the Attorney General to investigate. However, the president said that Palau has limited resources and therefore seeking technical assistance from WB.

Toribiong expressed concern that the alleged irregularities and questionable banking transactions, if not corrected, will drive the bank into bankruptcy.

"As one of the world’s pre-eminent banking institutions, I hope that the World Bank might be able to assist, or advise of other institution that can assist in this investigation and to make recommendations on how the NDBP can fulfill its mandate as effective instrument of Palau’s economic development going forward," Toribiong said.

While the NDBP is under investigation, the board has placed Bank President Kaleb Udui Jr. on administrative leave effective May 27. Bank’s Asset Manager Cathy Francisco was also placed on administrative leave effective June 6.

Island Times © 2011 Island Times. All rights reserved

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