Danpullo-MTN affair: BEAC Governor’s letter to MINFI sparks controversy.

Following the freezing of the accounts of MTN Cameroon, MTN Mobile Money and CHOCOCAM SA, the Governor of the Bank of Central African States, BEAC, Abbas Mahamat Tolli, has written to the Minister of Finance, Louis Paul Motaze, raising serious concerns as to the investment climate in Cameroon.

However, Tolli’s letter to MINFI, with subject: “Court decisions against banks established in Cameroon”, has sparked controversy as it has not gone down well with Danpullo and his cronies. 

Tolli, in his letter, had stated that he was prompted to write to the Minister of Finance sequel to a correspondence to him by the President of the Association of Banking Institutions of Cameroon, known by its French acronym, APECCAM.      

The BEAC Governor noted that APECCAM evoked “various judicial orders, accompanied by very high daily penalties against seven banking institutions, aimed at forcing them to transfer to the registry of the Bonanjo High Court, designated receiver of funds confined in the framework of pending precautionary seizure procedures”.

“The correspondence specifies that the large sums confined under said precautionary seizures are funds registered on the ‘mobile money pool account’ belonging to mobile money customers. Under the terms of article 52 of regulation 04/18/CEMAC/UMAC/COBAC of December 21, 2018 relating to payment services in CEMAC,...They are protected against any recourse from other creditors of the payment institution, including in the event of enforcement proceedings or collective debt settlement proceedings opened against the payment institution,” Tolli wrote.

“It therefore appears that the community rules, in particular the regulation mentioned above, or applicable national rules, particularly those governing deposits and consignments in Cameroon are not respected,” he said. 

Tolli continued that: “Indeed, Law 2008/003 of April 14, 2008 governing deposits and consignments provides in its articles 3, 5 and 6 that deposits, consignments and judicial actions can only be ordered for the benefit of the Deposit and Consignment Funds, which enjoys a monopoly regarding said deposits, consignments...”

“I particularly draw your attention to the risks posed by such court decisions on the banking and financial system, given the significant financial stakes, decisions which do not have a legal basis. I would be grateful if you would contact the Minister of State, Minister of Justice and Keeper of the Seals, to make him aware of the rules governing the banking and financial system, the poor application of which could contain the seeds of a systemic risk...,” he urged the Minister of Finance.

Danpullo’s camp fires back

Meanwhile, Danpullo’s lawyers have fired back, describing the statements made by the BEAC Governor, Abbas Mahamat Tolli, as “unacceptable, risky, reckless, and contrary to diplomatic norms”.

In a declaration, a copy of which The Guardian Post has seen, the lawyers faulted Tolli’s declarations that the court decisions are not based on legal bases.  

“In a correspondence addressed to Cameroon’s Minister of Finance that went viral on social media, the Governor of BEAC, in flagrant violation of the duty of non-interference and respect for the independence of the Cameroon judiciary, declared that ‘decisions which do not have a legal basis...’,” they wrote. 

“It is nothing more and nothing less than an unfortunate outing that could have been done without the Governor of the BEAC, which is reckless, risky, and contrary to the customs governing diplomatic relations,” the declaration stated.

“First of all, in terms of form, it is difficult to believe that this is a document prepared by BEAC, which is accustomed to prudence,” the lawyers added.

The declaration by Danpullo’s lawyers added that: “It is unacceptable that for such a sensitive issue, the Governor of the BEAC, who castigates the Cameroon court decisions is wrong about the registry of the court designated as receiver, proof that he did not take the trouble to read the court order that he criticises”.

“Furthermore, what elements does the Governor of BEAC count on to assert that the penalties are ‘very high’?” the lawyers questioned.

“BEAC statement risky”

Meanwhile, the lawyers said the statement by the BEAC Governor is risky in that “the Governor of BEAC takes at face value the assertions of APECCAM, concerning the Mobile Money pool account, the careful examination of which could reveal surprises and put himself in a situation of complicity...”. 

“Having in-depth knowledge of this file, we think this statement is risky. Even if an elusive account is seized, it goes to the victim of the “abusive” seizure to refer the matter to the Dispute Judge to exercise an appeal for release,” they noted.

“The Governor of the BEAC now wants to replace the Judges to the point of making value judgments on decisions rendered and on legal proceedings which are still ongoing,” they said. 

“We would have understood that the Governor is talking about funds from the Mobile Money pool account, but to speak of the illegality of the appointment of the Registrar-In-Chief as receiver is simply an unacceptable interference in the Cameroon court decisions...,” the lawyers added.

Talking about diplomatic implications of the BEAC Governor’s letter to the Minister of Finance, Danpullo’s lawyers write: “BEAC is linked to Cameroon by a headquarters agreement dating from 1985. It is unacceptable for the Governor of BEAC to make value judgments on the decisions rendered by the Cameroon justice system”.

“At a minimum, the Governor of BEAC should be called to order by the Minister of External Relations to explain this attack on the sovereignty of Cameroon and the independence of its judiciary,” they added.

Origin of the saga

It should be recalled that FNB, in an action which observers say smacked of xenophobia, had seized and liquidated all of Baba Danpullo’s properties in South Africa, valued at more than 250 billion FCFA. 

This came after the bank granted a loan to BESTINVER Company South Africa Limited, “which resulted in a significant misappropriation of assets from the consortium of BESTINVER companies, for which Baba Ahmadou Danpullo is the promoter in South Africa”. 

A source close to Danpullo had disclosed that: “Following a loan of 22 billion FCFA, of which Danpullo personally contributed 2 billion, obtained from First National Bank (FNB) for the purchase of a property in Cape Town by BESTINVER Company South Africa Limited, secured by a mortgage, with a repayment period of 10 years, the bank terminated the loan agreement and demanded immediate and full repayment of the credit”. 

“Despite having already made payments for three years and with seven years remaining, during which Baba Ahmadou Danpullo was deciding to repay the said credit, he not only saw his company subjected to a payment cessation procedure, along with the guarantors, but also faced forced liquidation through questionable procedures,” the source had recounted. 

Danpullo’s justification in freezing, MTN Cameroon, CHOCOCAM SA accounts

Months back, a source close to Baba Danpullo, justifying the freezing of accounts of MTN Cameroon, CHOCOCAM SA, had said “considering the organised dispossession by First National Bank, the only recourse available to the requesting parties for the recovery of their claims was to pursue a conservatory seizure of debts on the accounts of the companies, Mobile Telephone Networks Cameroon Limited (MTN CAMEROON SA) and CHOCOCAM SA to obtain what is rightfully theirs”. 

The source had noted that the freezing of the accounts of MTN Cameroon and CHOCOCAM SA, according to Baba Danpullo, is “because these two companies have connections with FNB Bank”. 

According to the source, South Africa-based, First National Bank, a subsidiary of First Rand Bank Ltd, in which Public Investment Corporation Ltd is a shareholder, “is also the majority shareholder of Mobile Telephone Networks Cameroon Limited (MTN Cameroon SA)”.