MedTech Scientific Limited Hooked: Senate Committee Recommends Renegotiation Or Cancellation Of Contract

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MedTech Scientific Limited, a company providing destination inspection (DI) service for the Government of Liberia (GOL) from 2021—2031, has been hooked by an ad-hoc committee established by the Liberian Senate to investigate its operation in Liberia.

   In a report submitted to the Liberian Senate on Thursday, September 19, 2024, the ad-hoc committee reported that, consistent with the objectives of the investigation, they found out that there is no evidence of the submission of a request by the Liberia Revenue Authority (LRA) for the initiation of the concession process by MedTech, which brings to question the legality of the company’s operations in the country, as there was no evidence of a Public Private Partnership (PPP) Concession Certificate as stipulated in Section 88 (2) of the PPCA.

   According to the report, even though MedTech Scientific Limited was selected as the most responsive bidder, however, it was established during the public hearings by MedTech Scientific Limited Ghanaian partners that MedTech misled the evaluation panel by falsely presenting BIVAC’s facilities and technical experience in Beirut and Mali to justify its claims of operational experience.

   The Senate committee said it established that the MedTech Scientific Limited contract is well above the US$10 million threshold and subject to the granting of investment incentives (tax exemptions), and that Section 10.2 of the signed DI Contract grants tax and duties exemptions to MedTech Scientific Limited under Section 9 of the Liberia Revenue Code of 2000, necessitating Legislative ratification, but the committee could not establish that the National Legislature ratified the contract.

  Also, the company could not provide detailed financial report for the execution of the DI Contract, and the committee received no evidence of payment of GOL’s share to the Transitory Account.

   According to the contract between MedTech and the government, a Transitory Account (TA) would be established by GOL and MedTech Scientific Limited jointly through which payment of all fees will be made by importers and exporters. The opening of the TA is consistent with Section 34(4) of the Public Financial Management Act of 2009, which states, “The Minister may, in agreement with the Central Bank of Liberia (CBL), authorize the opening of additional bank accounts and other accounts other domestic and foreign commercial banks, to act as transitory bank accounts to facilitate the collection of revenues and processing of payments.”

   On July 1, 2021, the government, represented by the LRA, MFDP and CBL, and MedTech Scientific Limited, entered into a memorandum of understanding (MOU) with Ecobank Liberia Limited for the opening of the TA, consistent with Section of the DI Contract. But, contrary to Section 9 of the contract and the MOU, the LRA instructed MedTech Scientific Limited in a letter on February 2, 2022, signed by the Commissioner-General, to open a separate bank account and manage the GOL’s 20 percent revenue on its behalf to fund LRA’s capacity building activities outside of established GOL public financial management framework.  According to the report, this is a violation of the contract, the MOU, and PFM Act 2009 and Amended 2019, which states that “All funds in Revenue Transitory Accounts be transferred daily, and bank reconciliations be done once every month to avoid errors in transmitting these transitory accounts.”

   Amidst these inconsistencies, the Senate ad-hoc committee, headed by Senator Amara Konneh, has recommended that the Executive should immediately seek the opinion of the Attorney General on the legality of the DI Contract to determine if it should be reviewed and renegotiated to ensure conformity with Liberian laws or canceled, considering the violations the committee has uncovered.

   The committee further recommended that MedTech Scientific Limited must be held accountable for its management of the Transitory Account. Specifically, the company should immediately remit all funds held on LRA’s behalf they were required to deposit into the Government of Liberia’s Transitory Account at Ecobank Liberia, as explicitly required by the contract. Additionally, MedTech must provide the government with complete bank statements detailing all financial transactions from the inception of the account until the date of this report to facilitate a full audit and recovery of potentially misappropriated funds.

   MedTech Scientific Limited, the report said, has acted as a spending entity on behalf of the Liberia Revenue Authority (LRA) without proper oversight; as such, the General Auditing Commission (GAC) should conduct a comprehensive audit of all funds managed by MedTech. “This audit should verify all revenues and expenditures to ascertain if the company’s spending, on behalf of the government, aligns with the PFM Act. It should also determine how the Government of Liberia’s share of the collected revenues was spent: official versus unofficial activities,” the committee recommended.

   Giving his opinion on the matter, the President of the Fula Business Association, Mohammed Majah Barrie, commended the Senate’s committee for the effort, and further emphasized that MedTech’s contract needs to be terminated with immediate effect before they do more harm to the country. He said he has been raising the alarm for a very long time, but the authorities were not listening.

   According to Barrie, MedTech is causing more harm than good for the business community, and that their function is infinitesimal to the growth of the nation’s business climate, and it will be a win for the business community if the government can cancel the company’s operation.

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