Clear Skies, Zoomlion, others in court over unpaid ADB loans

The Agriculture Development Bank (ADB) has dragged a Tema-based fishing company, Clear Skies Limited; waste management company,Zoomlion Ghana Limited; and a number of other companies to court for defaulting on loans they took from the bank.

Management of the ADB has been severely criticised by staff union of the bank for poor management decisions which they say have left the state-owned bank in a perilous state. One of such bad decisions, the staff say, is the granting of loans to companies without first ascertaining their credit worthiness and ability to repay.

Documents available to Joy News indicate that Blue Skies Limited owes the ADB GHc123,868,334.58 as of March 2015.

Other companies which owe the bank are Asutuare Poultry Farm, GHc8,291,062.22; [Obuase] Mining and Building Construction, GHc7,372,729.18; Kwanim GDK Farms Limited, GHc 7,046,729.00 and Zoomlion Ghana Limited GHc7,038,164.18 amongst others.

Many of the loans cited by Joy News have been classified by the bank as “loss” and “doubtful. The bank has also made provision for parts of the loans to be written off as bad debt, but management has explained it does not mean the bank will cancel the debts.

Some staff of the bank are, however, blaming management of the bank for not doing due diligence before giving out the loans.

On the Blue Skies loan, for instance, they say the Bank of Ghana’s capital requirement for opening a new bank is GHc60 million. To them, it is not prudent to give a loan worth more than the seed capital of two banks to a company without first verifying its ability to pay on time.

In August 2014, the ADB suspended all staff loans because the bank was constrained “on two key elements of its financial performance indices, namely capital adequacy and liquidity ratios, and has therefore been compelled to take urgent steps to ensure the stability of the bank.”

The ADB has also suspended all commercial loans due to its financial difficulties. Staff of the bank say the sale of the bank’s headquarters and residential facilities and guest houses across the country clearly demonstrates how desperate the bank is to raise money to keep afloat

Joy News, however, has documentary evidence that a board member of the bank, Maurice Tanco Abisa-Seidu, was granted a loan of GHc400,000 only last month despite the freeze on all loans.

According to the Workers Union, the procedure in giving the board member the loan is questionable. The workers believes he used his influence to get the loan.