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BoG Hot Over $24m Drill Ship
 
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29-Oct-2013  
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The Bank of Ghana (BoG) has deepened the controversy surrounding the disbursement of the $24million accrued from the sale of the Ghana National Petroleum Corporation (GNPC) oil drill ship, Discoverer 511.

The GNPC’s Discoverer 511 ship was sold in July 2001 for $24million by the Kufuor Administration, out of which $19.5million was used to settle the state-owned oil corporation’s indebtedness to Societe Generale, $1 million for legal fees with the remaining $3.5 million said to have been paid into a foreign account of Ghana.

However, Paul Kwadwo Djang, a manager at the Treasury Department of the BoG yesterday told the sole commissioner investigating judgment debts and compensation payments to institutions and individuals that the central bank had not been able to locate nor track the transfers of the monies.

Mr. Kwadwo Djang’s claim has raised serious questions about the foreign accounts being operated by the country’s central bank on behalf of the government and people of Ghana.

It would be recalled that Abdul-Malik Kweku Baako Jnr, editor-in-chief of the New Crusading Guide newspaper, indicated on Joy FM and Multi TV last Saturday that there was enough documentation on the disbursement and transfer of the cash accrued from the drill ship sale.

Quoting a July 16, 2001 payment order, Mr. Baako indicated that the document “irrevocably and unconditionally” directed the payment of $19.5 million to Societe Generale.

He further quoted a document which was an order of the government of Ghana for $3.5million to be transferred from the Ghana International Bank in UK into the government of Ghana account in Chase Manhattan, New York.

“That account is available and can be audited,” he emphasised, pointing out that the Judgment Debt Commission had the capacity to check these facts.

Surprisingly, the BoG which is supposed to assist the commission to unravel the so-called mystery surrounding the transfers has not been of any assistance so far.

The BoG treasury manager, Mr. Kwadwo-Djang could not even assist when the sole commissioner’s counsel, Kofi Dometi Sokpor mentioned a foreign account number 0001191613 in which some of the proceeds from the sale of the drill ship were deposited.

“My Lord, I cannot say for sure whether the account still exists because we are still looking. We have made efforts but as I speak now, we have not traced such an account number,” he told the sole commissioner, Justice Yaw Apau.

Mr. Kwadwo-Djang pleaded with the commission to give the BoG enough time to search for documents relating to the transfers.

Consequently, the central bank has been given up to November 25, 2013 to appear before the commission, at which time it is expected to provide some valuable information to the commission.

Asked by the sole commissioner’s counsel whether the government of Ghana owned the Ghana International Bank in the UK, Mr. Kwadwo-Djang said “it operates as a purely foreign account that receives only foreign money related to Ghana.”

Giving account of how payments and transfers are made, he indicated that transfers originate from the Ministry of Finance.

“The Ministry of Finance will write to the Accountant General then the Accountant General will refer the letter to us, instructing us to make payment.

“Normally they write to the Banking Department of BoG, then the banking department will in turn write to the Treasury Department. But as at now, I have not cited any document,” Mr. Kwadwo-Djang explained.

Societe Generale’s Suit

Multinational French bank, Societe Generale had sued GNPC in a London court as a result of a hedging contract signed in the 1990s in which the state-owned oil corporation was indebted to the foreign bank.

The hedging was carried out by Tsatsu Tsikata when he was the CEO of the corporation.

Editor-in-chief of the New Crusading Guide newspaper, Mr. Baako, had earlier indicated that as a result of the court action, Societe Generale had obtained an injunction to detain the drill ship and sell it at $20million to recover its debt.

However, the Kufuor Administration was able to sell the ship at $24million, far above the initial amount anticipated.

It is the disbursement of the amount that is now facing scrutiny at the sitting of the Judgment Debt Commission.

New World Investment’s Tax Liability

Testimonies at the Judgment Debt Commission have revealed that New World Investment Limited (now New World Securities) had failed to pay a withholding tax on a GH¢2.5 million judgment debt it received from government in 2010.

Kwadwo Awuah-Peasah, the director in charge of External Resource Mobilisation at the Ministry of Finance, yesterday told the Judgment Debt Commission that available records indicated that New World Investment did not pay withholding tax on the money.

“My lord, we’ve seen a copy of the pay voucher but the column for the withholding tax was blank. This presupposes that the withholding tax was not deducted before the payment was made,” Mr. Awuah-Peasah told the Judgment Debt Commission.

According to him, a senior officer at the accounts department of the ministry who was supposed to ensure the tax was deducted said he was not sure of the deduction because it was a judgment debt.

He said the internal auditor at the ministry had now issued a directive that no matter the issue involved, withholding tax would have to be deducted from all payments from government.

Mr. Awuah-Peasah indicated that the directive had been complied with since 2011.

Justice Apau’s Fury

Sole Commissioner Justice Apau registered his displeasure about the non-deduction of the withholding tax, pointing out it had deprived the country of the needed revenue.

“It is these revenues that government uses to develop the country. If the revenues do not come, how do we spend?” Justice Apau asked rhetorically.

 
 
 
Source: Awudu Mahama
 
 

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