A notice announcing the Social Security Board’s proposal to lend $7 million to a private company has raised public concern and prompted a response from the Ministry of Health & Wellness.
By Khaila Gentle
BELIZE CITY, Sun. July 24, 2022
A Public Notice of Investment by the Social Security Board of Belize has raised public concern once again, after it was revealed that the Board intends to lend $7 million to a private company, Pharmacy Express Ltd. In the notice, the SSB states that the funds it intends to provide to the company would be used for “refinancing and inventory purchases.” Additionally, the SSB notes that the loan facility is for a term of ten years, with principal and interest payments to be made monthly.
A little over a week ago, the Social Security Board (SSB) gave notice of a proposal to lend the Development Finance Corporation (DFC) $20 million. It was a move met with similar criticisms that prompted a response from DFC in the form of a press release stating that the financial institution “recognizes the public concerns” in relation to that notice.
“The DFC routinely secures such funding for lending to Belizeans. Such funds come from financial arrangements with both national and regional institutions. The SSB is one of those partners,” said DFC.
The press release goes on to state that the Government of Belize has placed “unprecedented confidence” in the DFC’s role in economic recovery and that the new credit line of $20 million will further enable the institution to provide affordable home loans.
This time around, however, the proposal for a $7 million loan to Pharmacy Express Ltd has, in addition to raising the concerns of contributors who know little about the company named in the notice, prompted a response from the Government of Belize through the Ministry of Health & Wellness.
A press release issued by the Ministry on Sunday evening states, “the ministry places on record some concerns related to this loan.”
According to the release, the Health Ministry hopes to meet with SSB to relay its concerns before a final decision is made regarding the proposed loan. Since SSB is an autonomous body, however, it can proceed with the loan regardless of the Government’s disapproval.
In response to the recent controversy, Deborah Ruiz, the CEO of the Social Security Board, spoke with the media. She said that while the SSB is autonomous, the Government’s objections regarding the loan “will merit consideration” by the Board.
Ruiz explained how the vetting process for loans proposed by the SSB is carried out:
“Normally once the applications come in, the investment services internal to SSB would look at the business proposal, would look at the collateral that is being put up, and they review the financials and in-house projections. They look at the loan agreements that may be in play — bank statements, articles of association, and the like—all the required documentation is reviewed for completeness and then it goes to the investment committee,” she said.
She also noted that the purpose of publishing the Public Notice of Investment is to have the public weigh in with any objections they may have.
According to Ruiz, the decision to approve a loan proposal for Pharmacy Express Limited was not a unanimous one. Nevertheless, the information that the investment committee received regarding the company, indicated that the company satisfied the requirements needed to qualify for funding from SSB.
“The Ministry of Health might have information that we are not privy to, so we wait to hear from them, whatever information they have or the nature of their objection,” said the SSB CEO. AMANDALA understands that the company Pharmacy Express Limited may have ties to Julius Zabaneh, as he is named as one of the company’s shareholders and Directors in a 2013 court case brought against him. The background information from that case also indicates that the company leases four stores in the Fort Street Tourism Village, and supplies those stores with pharmaceutical goods, which they sell to cruise ship tourists.
This revelation has led much of the public to ask the question: what will the pharmaceutical company, reportedly owned by the relative of a member of Cabinet, be doing with seven million dollars of contributors’ money?
In response to the controversy, the United Democratic Party issued a press release decrying SSB’s decision to fund the company.
“Social Security funds [are] an investment by the workers of this country into their future. It is a social safety net for the sick, vulnerable, and aged – not a crutch for bankrupt PUP cronies,” said the release.
The UDP also asserted that a $7 million loan to a “failing pharmacy” does nothing for the development of Belize, and calls it an investment that is “too risky” for the workers of the country to approve of.
Julius Zabaneh made the news most recently in August of 2021 when it was reported by 7News that the pharmaceutical company, Medigen International Limited, which he owns, had been awarded tender for the importation of Pharmaceutical and Related Medical Supplies shortly after appearing on the list of licensed pharmaceutical establishments in that same year.
The SSB, which continues to look for viable projects to invest in for the sake of maintaining and increasing its reserves, is hoping that, despite the objections, it does not lose a viable project.
“I must state that, for the Social Security Board, investment is a key objective in terms of the availability of and increasing the reserves in order to pay all long-term benefits. Contributions that insured persons make towards their pension are not enough to pay a lifetime pension. We depend on investment income to do that. So that is critical for us to invest,” said CEO Ruiz.
“But if that is the decision, based on the objections, then so be it,” she later added