NDC legacy of corruption
Investigations by The Statesman into the divestiture of state owned enterprises (SOEs) have revealed that not less than 60 of the companies placed on divestiture during the (P)NDC regime and under the direction of the then Finance Minister, Dr Kwesi Botchwey, were sold without any legal backing.
Many of these companies were sold between 1989 and 1992 before the Divestiture Implementation Law 1993 (PNDCL 326) was passed, which, interestingly indemnified the PNDC from prosecution for the illegal transaction in state-owned property.
Ever the legal gymnast and aware of the constitutional ban of laws being given retrospective effect, the PNDC then quickly passed the law, two days before the 1992 constitution came into effect, to give a sort of after-event cloak of legality to the exercise, many of which has been shrouded in controversy and allegations of back-handedness.
The apparent illegality throws up the credibility of the entire divestiture programme initiated by the PNDC, which ran into tens of millions of dollars.
Some of the companies divested before the promulgation of PNDCL 326 were: The Continental Hotel (now Golden Tulip Hotel) which was sold to the Ghana-Libyan Arab Holding Co. Ltd for $3,578,125; Ghana Government’s 30 per cent stake in Lever Brothers Ghana Ltd (worth 3m pounds sterling); GHACEM ($3m to SCANCEM of Norway); Prestea Goldfields ($3m); and Tarkwa Goldfields ($3m).
DL Steel Limited, Tema; Achimota Brewery Company, Accra GIHOC Glass Factory (sold to Tropical Glass Factory said to be owned by the exiled Togolese opposition leader, Gilchrist Olympio), West African Mills (a Cocoa Processing Company), and GIHOC Electronics, sold to Kludjeson International Limited (owned by Kofi Kludjeson, the immediate past President of the Association of Ghana Industries; etc.
Most of the companies, The Statesman investigations have revealed, were divested at very cut down prices and in some instances were sold to people close to the powers that were.
PNDCL 326, or Divestiture of State Interests, (Implementation) Law 1993, was hurriedly put in place on 5 January 1993 to take retroactive effect from 1 January 1988. The gazetted copy was dated 11 May 1993.
Analysts have explained that the law was apparently rushed in to prevent a breach of the 1992 Constitution which came into effect on 7 January 1993, two clear days after the promulgation of the Divestiture Law. These noticeable lapses on the part of the (P)NDC government, suggest that at the time the Divestiture Implementation Committee (DIC) was busy selling off state assets and divesting state interest in some companies, it had no legal authority to do so.
But, the drafters of the law were very quick in inserting clauses that sought to indemnify the government and state officials. According to section 15 of the law, “No action shall be brought and no court shall entertain any proceedings against the State, the committee or any member or officer of the committee in respect of any act or omission arising out of a disposal of any interest made or under consideration under this law.”
The (P)NDC government’s divestiture programme has been tainted with allegations of monumental corruption of some officials of the party, as well as the former Executive Secretary, Emmanuel Agbodo.
Currently, Sherry Ayitey, a former member of the DIC and treasurer of the 31 December Women’s Movement and others are being tried at the Fast Track Court of bribery allegations in the divestiture of the Ghana Rubber Estates Limited (GREL), Takoradi.
It is being alleged that money exchanged hands before the company was divested to the French company. But ironically, the man who oversaw the privatisation process under the PNDC is campaigning to be nominated as the National Democratic Congress’ presidential candidate for 2004.
The divestiture programme and many other economic decisions taken by Dr Botchwey are bound to become a campaign issue for the next general elections if he wins his party’s nomination.