Probe Into $14 Million NDC Govt Debt Restructuring Deal

GOVERNMENT is investigating the circumstances under which $14 million, (about ¢98 billion) was illegally transferred into the accounts of New York Bay International at Chase Manhattan Bank in the United States.

The transfers were effected between July and December, last year.

A source close to the Ministry of Finance in Accra said yesterday that the ministry, sometime last year, signed a contract with New York Bay International to buy government debts mostly owed to contractors at five per cent discount.

Under the first arrangement, New York Bay International was to buy a debt of ¢90 billion from the government.

The only debt that was supposed to have been restructured was ¢52 billion which would have allowed the government to pay ¢8.9 billion each month over a six-month period to New York Bay International.

According to the source, even though New York Bay International did not completely absorb the debt, government continued to transfer monies into the accounts of the US-based firm through a local commercial bank (name withheld), far in excess of the value of debts the company initially agreed to purchase.

The source indicated that New York Bay International was neither registered in the country to do business with government, nor passed through the Ghana Investment Promotions Centre. These notwithstanding, the company was able to open an account with the Ghanaian bank, contrary to the provisions of the investment code.

The source stated that New York Bay International in turn bought foreign currencies, notably dollars at any rate from both banks and foreign exchange bureaux and transferred the monies.

It said this was a major contributory factor which led to the free fall of the cedi against the international currencies last year.

It said cash lodgements made in the bank were so huge to defy justification.

Asked whether New York Bay International was a recognised institution, the source said though the ministry has been able to extract a statement from the company, information available to the ministry indicates that one of its directors based in the United Kingdom, is an ex-convict.

He said there are also local agents or front men for the company who are helping with investigations.

Mr Yaw Osafo-Maafo stated at a press conference in Accra last week that the relative stability of the cedi against major international currencies was the ability of the government to track and halt the illegal transfer of foreign currency which was being spear-headed by New York Bay International.

In another development, the ministry has authorised the Bank of Ghana to freeze all bank accounts of Mr Julius Zormelo who, according to the ministry, is linked to the scandal at the Divestiture Implementation Committee (DIC).

The ministry has also requested INTERPOL to help track down Angelo Lassey and Siegfried Sedziafia, both former staff of DIC for their role in the scandal.