MOF denies knowledge of rice importation
It has emerged at an Accra Financial High Court that the government's financial powerhouse, the Ministry of Finance and Economic Planning, was kept in the dark during the transaction that led to the importation of some 15,000 metric tonnes (300,000 bags) of rice from India, on behalf of the Government of Ghana, in 2008.
According to Mr. Mark Anthony Made, Legal Counsel at the Ministry of Finance and Economic Planning, there were no records at the ministry regarding the transaction on the rice importation.
Mr. Made, who has about 18 years experience in the legal profession, was giving his evidence-in chief yesterday before the court, noting that the Ministry of Finance had no previous documentation on the importation, as affirmed by a response from the Ministry of Foreign Affairs.
EVIDENCE
Being led-in-evidence by the Chief State Attorney, Mr. Anthony Gyambiby, the witness told the court, presided over by Justice Bright Mensah, that the Ministry of Finance got to know about the transaction, when in February 2009 it received a letter from the National Investment Bank (NIB), drawing its attention to the contract on the transaction signed in October 2008.
Mr. Made noted that the letter, which came with several appendixes, was transferred to his office by the Chief Director of the ministry, who requested for a review of the letter, and advice to the Ministry of Finance and Economic Planning.
The former Foreign Minister, Akwasi Osei-Adjei, and the former Managing Director of the National Investment Bank (NIB), Daniel Charles Gyimah, are facing criminal charges for contravening the Public Procurement Act, and in the process, causing a financial loss of US$1,408,590 (GH¢1,524,952) to the state, in the various roles they played in the importation of some 15,000 metric tonnes (300,000 bags) of rice for the Government of Ghana in 2008 from India.
The witness pointed out that the letter from the NIB drew the attention of the ministry to the importation of the rice, requesting the approval of the transaction, in addition to a tax exemption for the warehousing of the rice.
Mr. Made further informed the court that documents available indicated that the Foreign Ministry, and Ghana's Mission in India, signed the contract on behalf of the Government of Ghana, with their counterparts in India.
The witness indicated that following the request from the Chief Director of the Ministry of Finance, his office advised that proper explanation on the transaction should be sought from the Ministry of Foreign Affairs, more so when the Finance Ministry had been called upon to reimburse the NIB for all expenses incurred on the rice importation.
CHIEF DIRECTOR
Mr. Made asserted that subsequently, the Chief Director of the Ministry of Finance, Nana Juaben Siribuor, in a letter dated March 31, 2001, and communicated to the Ministry of Foreign Affairs seeking to find out the circumstances and background to the contract, the legal authority of Ghana mission in India, whether or not the Ministry of Finance knew of the contract and its role, as well as the grounds and justification of the NIB wanting tax exemptions, in view of the fact that the transaction was purely commercial in nature, among others.
According to the witness, the Ministry of Finance should have been involved in the transaction, if the NIB wanted the government to pay for the rice.
In a response from the Chief Director of the Foreign Ministry, Ambassador Aggrey Orleans, in a letter dated March 21, 2009 to the Ministry of Finance, Mr. Made indicated that the documentation showed that there were some governmental backings.
The witness noted that documents on the rice importation, including discussions held between the then President Kufuor and his counterpart in India on food shortage in Ghana, were sighted at the Ministry of Foreign Affairs and Ministry of Trade, asserting that records indicate that Ghana was the buyer of the rice.
The NIB, on the advice of the Foreign Ministry, witness noted, established letters of credit, signed by its Deputy MD, Mr. Tweneboah.
The response from the Foreign Ministry, witness indicated, in relation to the tax exemption, was that since the government was to take over the sale and distribution of the rice, there was need for a tax exemption, adding that the Ministry at the end, apologised to the Finance Ministry, and promised to take proper procedures in future transactions.
The witness noted that the Foreign Affairs Ministry, in a formal memorandum on July 3, 2009, to the Finance Ministry, brought a close to the rice importation.
As a result, the witness pointed out, some recommendations were made by the Finance Ministry, including background checks on the transaction, forensic audit into the transaction, and the NIB to be responsible for any losses incurred, if the Finance Ministry was to finance the rice importation.
Mr. Made noted that later, a letter dated July 8, 2009 from the Ministry of Finance to the NIB Acting MD, requested for stocktaking on the rice to determine its true value, and that the NIB should take over the distribution of the rice, and pay for it among others.
This, he noted, led to the taking of an inventory on the rice by the Foreign Affairs Ministry, the Customs Excise and Preventive Service (CEPS), and the NIB, with a subsequent advertisement in the press for the sale of the rice, adding that the Ministry of Finance had not had any information on it again thereafter.
Responding to cross-examination from Mr. Godfred Yeboah Dame, counsel for Akwasi Osei-Adjei, the witness noted that no NIB board approval was sighted, noting that if the president commences a transaction, which will have recourse to public finance, it is deemed proper for the Ministry of Finance to be contacted.
RECORDS
According to Mr. Made, records indicate that the sale of the rice from State Trading Corporation of India was cosigned to the NIB, pointing out that he was unaware that it was unlawful for tax to be imposed on the rice importation, as an Act of Parliament provides a tax exemption on rice and certain products.
The witness could also not tell if the money for the rice import had been paid, noting that at a certain time, the Citi Bank International called on the Ministry of Finance to help them retrieve their monies from the NIB.
The witness also noted that the contract had cited the Foreign Affairs Ministry as the buyer of the rice, through Ghana's mission in India, with the NIB as the lead consignee.
Sitting has been adjourned to today, December 8, 2009, to enable counsel for Daniel Charles Gyimah to cross-examine the witness.
The accused persons, who are facing eight counts of conspiracy, contravening provisions of the Public Procurement Act, using public office for profit, stealing and willfully causing financial loss to the state, pleaded not guilty to all the charges leveled against them.
They are currently on bail in the sum of GH¢200,000, with two sureties to be justified each.
Additionally, the accused persons are to deposit the title deeds of immovable properties valued at GH¢1 million at the court's registry, and report to the investigator at the BNI once every week, until further directions from the court.
It is the case of the prosecution that somewhere in February 2008, the former Minister of Trade and Industry, Joe Baidoo Ansah, initiated the importation of rice from India.
According to the State Prosecutor, a letter dated February 13, 2008 indicated that the former Trade Minister requested the Indian government, through its High Commission in Ghana, to buy 100,000 metric tonnes of (25%-35%) broken rice, with the consignee being the Ghana National Procurement Agency (GNPA).
The arrival of the rice into the country was scheduled for May 2008, “to help curb the severe increase of price of staples in Ghana.”
Mr. Gyambiby further pointed out that in another letter dated April 10, 2008, and addressed to the Minister of External Affairs of India, Mr. Joe Baidoo Ansah referred to an earlier meeting held between former President Kufuor and the Minister of Commerce of India, and drew attention to the “severe food situation looming in Ghana,” and sought to procure from the Indian Government 300,000 metric tonnes of low grade white 25% broken rice for shipment to Ghana, by June 2008.
In April 2008, Mr. Akwasi Osei Adjei took over the effort by Joe Baidoo Ansah, and nominated the NIB as the sole consignee, prosecution indicated, with Mr. Daniel Charles Gyimah, representing the NIB, and negotiated the terms of the contract with the State Trading Corporation of India, through the Ghana High Commission in India.
“The Commissioner was instructed by the 1st accused to sign the contract on behalf of the Government of Ghana, represented by first accused, the High Commissioner and 2nd accused (MD) NIB,” prosecution stated.
The state prosecution noted that on arrival of the rice, efforts by the NIB to get import tax exemption from Ministry of Finance to clear the rice were turned down, owing to the commercial nature of the contract, since the Ministry of Finance was not involved in the transaction.
The rice, according to the prosecution, has since been in the CEPS bonded warehouse, with a physical count of the consignment, revealing a shortage of 2,997 bags.
The remaining quantity of rice was in a varying state of wholesomeness, as the NIB was making efforts to sell them through the tender process, the court was told.
The state prosecution further contended that the transaction was that of a public procurement, and investigations conducted into the importation of the rice by the BNI, revealed that the provisions of the Public Procurement Act were not followed.
Additionally, the prosecution noted that the investigations also revealed that about 2,997 bags of rice short-landed were diverted for sale elsewhere, for huge private profit.