Fiji Banking Scandal: “Deceitful Loans” and “Corruption” Exposed

A Scathing Rebuke to Fiji’s Financial Sector

In a strongly worded address, Fiji’s Prime Minister Voreqe Bainimarama recently warned the nation that it cannot afford to forget or repeat its darkest banking scandal. Speaking at the 7th Pacific Credit Union Congress in Lami, Bainimarama echoed the sentiments of then Director of Public Prosecutions Nazhat Shameem, who had exposed the National Bank of Fiji’s (NBF) catastrophic collapse in the late 1990s.

The NBF Debacle: A Trail of Debt and Corruption

The NBF debacle, which left a trail of debt worth $220 million or 8% of Fiji’s gross domestic product, was precipitated by reckless lending practices and corruption. Shameem revealed that between 1987 and 1994, more than $200 million was lent to individuals with no or inadequate securities, primarily benefiting wealthy businessmen, Cabinet Ministers, and political cronies.

The Investigation: A Case of Fraud, Corruption, and Abuse of Office

The scandal was further exacerbated by the Reserve Bank, Ministry of Finance, and police investigations, which uncovered:

• Fraud
• Corruption
• Abuse of office
• Obtaining by false pretences
• Obtaining credit by fraud

Despite these findings, many high-ranking officials, including Ministers, senior bank officials, lawyers, and businessmen, were acquitted in court.

The Attempt to Bring Justice: Hobbled by Bureaucratic Obstacles

Shameem’s attempts to bring those responsible to justice were hindered by:

• The Attorney General’s refusal to seek international cooperation
• A sudden 40% cut to her department’s budget, effectively crippling her office’s ability to summon witnesses

The outcome was that no one was convicted, and no one was held accountable for their actions.

The Legacy of the NBF Collapse: A Cautionary Tale

The Prime Minister’s warning comes as Fiji struggles to recover from the devastating impact of the NBF collapse, which left many innocent citizens financially ruined. His call for vigilance serves as a reminder of the need for:

• Transparency
• Accountability
• Robust regulations in the banking sector
• To prevent such calamities from happening again.