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27.05.2004 General News

Salon Loan Saga: CNT Not A Chinese Govt Company

By Ghana Palaver
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… Kwaku Baako and his 'Crusading Guide' provide the evidence The 'Crusading Guide' and its editor Mr. Kweku Baako are making strenuous efforts to convince Ghanaians about the authenticity and existence of the CNTCI and the CNT as well as the loan of US$300 million they propose granting to the NPP Government.

In the process, however, they have provided all the evidence that is required to prove the falsity to the claim by defenders of the loan that the lending companies are Chinese Government entities.

In the 'Crusading Guide' of 20th May - 26th May 2004, they presented what purports to be the “Organisational and Ownership Chart' of one of the shareholders of CNTCI, Alberni United SA, which also indicates the shareholders connected with CNTCI Ltd.

Preliminary Questions

There are some preliminary questions to be raised about the paper's involvement in the NPP Government's defence of the CNT loan.

First, why is it that none of the four Ministers who co-sponsored the Memorandum covering the Loan Agreement to Parliament - the Minister of Finance and Economic Planning, the Minister of Trade, Industries and Presidential Special Initiatives, the Minister of Roads and Transport, and the Minister of Ports, Harbours and Railways - has chosen to speak in defence of the Loan Agreement?

Second, why is it that the Minister of Finance and Economic Planning, the Minister of State for Finance and Economic Planning, and the two Deputy Ministers of Finance and Economic Planning have all kept such a loud silence on the Loan Agreement? In fact, so frightened are these Ministers to speak on the CNT loan that the Minister of Finance and Economic Planning himself, when asked a question about the loan at a Press Conference he himself had called, sought refuge in the Hip-life artist Buk-Bak's song “I'm going to come - Me nya maba”, saying he would answer the question when he returned from a trip to Uganda!

Third, why is it that the numerous NPP Government spokespersons are all mute on this CNT Loan matter?

Fourth, why has it fallen on Mr. Kweku Baako and the 'Crusading Guide' alone to undertake the salvage operation on behalf of the NPP Government?

CNT Group (Holdings) Limited (CNT)

The Loan Agreement that Parliament approved is as per Article 1 between the “Republic of Ghana” and the “CNT Group (Holdings) Limited. CNTCI is only referred to in that Article as “the parent company of CNT Group (Holdings) Ltd”, which is the entity that the Ghana Government is borrowing. The 'Crusading Guide' should therefore be telling us about CNT Group (Holdings) Limited and not CNTCI, the parent company.

CNT Construction and Investment Limited (CNTCI)

Be that as it may, the 'Crusading Guide' states that CNTCI is a group “formed for the purpose of promoting its institutional shareholders, who are Corporations which are owned and operated by the Government of China.

But from the 'Crusading Guide's' own “Organisational and Ownership Chart”, the majority shareholders of CNTCI are not the “Chinese Government owned Corporations”. The so-called “Chinese Government-owned Corporations” own 49.75% of the shares in CNTCI. The remaining 50.25% shares are owned by Messrs H. N. Fernando (25%) and Mr. R. M. Edwards (25%).

The 50% shares of these two gentlemen are shares they are holding in trust for Alberni Unites SA, Columbus Newport Llc, and Universal Credit Bank and Trust (UCBT) Company Limited.

The other 0.25% shares in CNTCI are held by an individual named Mr. Song Fuzal.

The attempt to create the impression that CNTCI is a Chinese Government entity is therefore an attempt to mislead Ghanaians.

According to Mr. Kweku Baako in the 'Crusading Guide' story referred to, he “personally spoke via telephone with Mr. R. Edwards, President of CNTCI”. Mr. Baako is obviously new to the world of international scams; otherwise we would ask him the following questions:

(a) Does Mr. Kweku Baako know Mr. R. Edwards personally?

(b) Does Mr. Kweku Baako know Mr. R. Edwards' voice?

(c) How does Mr. Kweku Baako know that the person he spoke with was Mr. R. Edwards, President of CNTCI?

(d) Can Mr. Kweku Baako make available the telephone and fax numbers as well as the e-mail address of this President of CNTCI so that others can also talk to him?

Taking Mr. Kweku Baako's word for it, however, that the President of CNTCI is Mr. R. Edwards, then he also happens to be a shareholder of another CNTCI shareholder, Alberni United SA. CNTCI's shareholding is therefore as follows:

(a) Messrs H. N. Fernando and R. Edwards representing Alberni United SA & Columbus Newport Llc - 50%

(b) Mr. Song Fuzal - 0.25%

(c) Liaho Petroleum Corporation Bureau - 5.0%

(d) China Railway Construction Corporation (CRCC) - 5.0%

(e) Shanghai Electric Corporation - 5.0%

(f) Jilin Province Electric Power Design & Survey Institute - 5.0%

(g) Beijing Mua Lia Tian Engineers - 5.0%

(h) CNT Hong Kong ltd - 24.75%

CNT Hong Kong has as its shareholders 7 Chinese Companies who have the 24.75% equity divided equally among them.

China Railway Construction Corporation (CRCC)

The impression is also created by the 'Crusading Guide' that the Ghana Government has an agreement with the China Railway Construction Corporation (CRCC) and/or Liaho Petroleum Corporation Bureau (LPCB).

In a previous edition, the paper informed its readers that CNTCI will provide the US$300 million from its own resources but if, and only if, CRCC is awarded the construction contract. The 'Crusading Guide' also reported that CRCC has presented its financial statements to the Government of Ghana.

The question is, why did CNTCI, the Company granting the loan, not submit its own financial statements but chose to submit the financial statements of CRCC, a Company which has only 5% shares in CNTCI?

It is also important to know why such an important condition - “no construction contract to CRCC, no loan” - was hidden from Parliament - it is not in the Loan Agreement presented to Parliament - but was made available only to the 'Crusading Guide'?

Alberni United SA

According to the Company “Ownership Structure” published in the 'Crusading Guide', Alberni United SA, an offshore Company and one of the 4 main shareholders of CNTCI, has the following 5 shareholders:

(a) Mr. H. N. Fernando - Chairman;

(b) Mr. Lawrence Freedman - Director;

(c) Mr. R. Edwards - Director and Company Secretary;

(d) Mr. David Wimer - Director and Trustee for Columbus Newport Llc;

(e) Columbus Newport - Its shares are held in trust by Mr. David Wimer

Columbus Newport Llc

Columbus Newport Llc has 10 shareholders. However, its shares in Alberni United SA, the offshore Company which is also a shareholder in CNTCI, are held in trust by another shareholder of Alberni United SA, Mr. David Wimer.

Universal Credit Bank and Trust (UCBT) Company Limited

According to the so-called “due diligence report” that accompanied the Memorandum on the Loan Agreement to Parliament, UCBT “uses CNTCI's assets as security for the credit lines it provides or arranges for CNTCI”, and is obviously comfortable with CNTCI because CNTCI “secures itself against sufficient Guarantees from nations to ensure payments are made”.

UCBT has as its shareholders the following:

(a) Alberni United SA - 50%

(b) Messrs Desmond L. McAlammey, Alan C. Smith, Tim Fords and Winston White - 50%

The Corporate Maze

The scenario is this: Columbus Newport Llc has shares in Alberni United SA. Alberni United SA has shares in UCBT. Both Alberni United SA and Columbus Newport Llc have shares in CNTCI through representation by Messrs H. N. Fernando and R. Edwards who are also shareholders of Alberni United SA.

Alberni United SA has 50% shares in UCBT and together with Columbus Newport Llc, which has undisclosed shares in Alberni United SA, has 50% shares in CNTCI.

A Mr. Song Fuzal has 0.25% shares in CNTCI.


Thus the Chinese Government entities do not have majority shares in CNTCI. The noises being made by the NPP Government apologists, newspapers and serial callers that the Ghana Government is dealing with a Chinese Government entity is not borne out by the facts as published by the 'Crusading Guide'.

The maximum exposure of each of the Chinese Government Companies is 5%, and in times of any crisis, their liability will be limited to only 5% of the shares of CNTCI.

The 'Crusading Guide' has done an excellent job for Ghanaians. It has provided the evidence that our Government is not dealing with a Chinese Government entity but largely with a group of individuals who have created many Companies to create an illusion of several and different international companies when in fact they are the same individuals and the same companies.

An international financial analyst that 'Ghana Palaver' spoke to said: “This Agreement has all the features of a typical international financial scam. Create a corporate maze; confuse the Government of the poor developing country; that is what they fall for. And it seems the NPP Government has fallen for this one”.