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General News | Apr 22, 2004

$2.08m Overpayment Recovered By Gov’t

Crusading Guide

President J.A. Kufuor's declared commitment to uphold the national interest and to ensure accountability in public life/service has found manifestation in his singular quest for Ghana to recover a $2.08million overpayment made to a German Road Construction Company (name withheld for now) by officials of the Ministry of Roads and Highways in April 2000 in respect of Phase One of the Kpando-Worawora road project initiated under the government of the National Democratic Congress (NDC) led by Mr. J. J. Rawlings.

The Crusading Guide (March 23-29, 2004 edition) reported that its investigations had revealed that a German Road Construction Company had been overpaid by an amount of two million dollars plus by officials of the Road and Highways Ministry in April 2000. That story titled “$2.8million Overpayment Detected – German Road Construction Company Was the Major Beneficiary”, also revealed that after meeting the Ghana-based officials of the German Company and National Security Council Secretariat (NSCS) officials at the Blue House (Castle Annex) on February 4, 2004, the General Manager (Ghana Branch) of the German Company wrote a letter dated February 5, 2004, intimating that he had communicated to their German principals the observations and findings of the National Security council Secretariat (NSCS) that the parent company had been overpaid the sum of US$2m plus in respect of Phase One of the Kpando-Worawora road project.

The General Manager of the Company (Accra) then said that officials of the company at the headquarters in Germany after studying the “statement of payment sent to by the NSCS, “agreed with your findings and accepted that there had been an over-payment in the sum of US$2,000,000.00 which they inadvertently did not notice.

Reliable sources close to the NSCS informed our special investigators that the President, in line with his 'zero tolerance for corruption' policy had insisted that the $2.08m overpayment be recovered either by means of dialogue or legal action or both.

The president according to our sources is displaying the same level of commitment and persistence on many other such cases of over-payments, illegal transfers of funds and fraudulent usage/diversion of divestiture proceeds.

This 'presidential persistence' paid off handsomely when on April 5, 2004, the German Company effected “the repayment of the overpayment.

Our special investigators sighted a fax message to that effect from the 'Dresner Bank AG in Frankfurt am Main underscoring that “…as per your request, we confirm execution of the following payment by (name of Company withheld) today”.

Details given were: “amount value USD2,080,451.00 date -05 April 2004, beneficiary bank – Ghana Bank, Accra, Ghana through the federal Reserve Bank of New York.

The rest was “Swift Code – FRNYUS33, beneficiary – Ministry of Finance, reason of payment – repayment.

“Payment has been affected via SWIFT MT 103 to BAGHHAC directly under our TRN-reference no: T40A40405A123. In case of my request please do not hesitate to contact the undersigned. Best regards, the fax message signed.

An earlier letter to the General Manager of the Company (Accra) dated April 1, 2004 from the Bank of Ghana (Bog) signed by Mr. Frederick France, Head of the Treasury Department, and copied to the Minister of Finance and Economic Planning had said “Further to the meeting at the ministry of finance and economic planning this morning, we wish to advise that any transfer in regard to this (over-payment of US$2,080,451.00) should be made payable to Bank of Ghana USD Account No. 021084034 with the Federal Reserve Bank NY.

When told the latest development with regards to this case, the financial analyst who spoke on anonymity in the earlier publication and who had encouraged the paper to sustain its investigative focus on the matter and ensure that justice was done to it, lauded the president and the government for insisting on the “repayment of the over-payment.

However, he felt the interest which had accrued on the over-payment also ought to be calculated and repaid into public chest. He cautioned government against entering into 'settlement packages' that could promote the culture of impunity in business and public life/service though he conceded that each case must be dealt with on its own merit.

He also praised the national security council Secretariat (NSCS) and the Ministry of Finance and economic planning for their roles in the quest to recover the over-payment and entreated them to bring the same level of commitment and vigilance to bear on other outstanding and yet to be discovered/uncovered cases of overpayment, illegal transfers of funds, 'Kalabule divestiture, diversion/misapplications of divestiture proceeds and public procurement discrepancies and fraud.

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