Modern Ghana logo

FEATURED: Can We Blame Religion For Africa’s Economic Woes?...

06.07.2005 General News

Konadu Owes ¢2.8Bn

Daily Guide

According to the Daily Guide the Attorney-General and Minister of Justice is instituting legal action against the 31st December Women's Movement (DWM), to recover a total amount of ¢2,880,518,972.17, due to the state.

The amount includes $500,000 (¢750 million) principal approved as a medium-term loan on November 5, 1997, to provide working capital for the operations of Caridem Development Company Limited, which allegedly bought the divested GIHOC Nsawam Cannery.

Caridem is owned by the 31st December Women's Movement, presided over by Nana Konadu Agyemang Rawlings, wife of the former president.

The $500,000 was part of sums of money provided by the United States Agency for International Development (USAID) to finance the non-traditional sector, under the Trade and Investment Programme (TIP).

An account was, therefore, opened at ECOBANK, a private financial institution, to hold TIP funds in trust for the Ministry of Finance and Economic Planning (MOFEP), i.e., the Government of Ghana, in 1997.

With interest accruing on the loan, and Caridem making no efforts to retire its debt, Daily Guide found that the company is indebted to the Republic of Ghana to the tune of ¢2,880,518.972.17, through the Trade and Investment Programme.

Corroborating the story in a letter, dated May 11, 2005, and addressed to the Attorney-General and Minister of Justice, Mr Edward Dua Agyeman, the Auditor-General, hinted that the TIP Fund, from which the facility was disbursed, is managed by ECOBANK, on behalf of the Government of Ghana.

“Upon realising the default, as Chief Auditor, charged with ensuring the prudent use of state funds, he was of the view that government reserved the right to call in the $500,000 (¢750 million) loan facility, and accrued interest” he said.

The Auditor-General added that, Ms Hanni Sherry Ayittey, treasurer of the 31st December Women's Movement, contracted the loan on behalf of Caridem Development Company.

Caridem, he noted, has Nana Konadu Agyeman Rawlings, wife of former President Jerry John Rawlings, as a director, alongside others. The actual accrued interest on the ¢750 million loan is ¢2,130,518,972.17, he disclosed.

Mr R. Fiifi Brandful, branch manager, ECOWAS Head Office, in a letter dated May 10, 2005, addressed to the Auditor-General, Ministry Block O, P.O. Box M96, Accra, also confirmed that no-repayment had been made to the bank.

In a letter approving Ms Sherry Ayittey's request for funding, under the Trade and Investment Programme, the bank bonded Caridem to the following terms: Borrower: Caridem Development Company Limited. Facility: Medium-Term Loan.

Amount: ¢750,000,000.00 (Seven hundred and fifty million cedis) Tenure: Eighteen (18) months, expiring April 1999, but subject to annual review. This includes a one-year moratorium on principal and interest payments. Interest to be accrued during the moratorium period, will be capitalised loan.

Repayment: The principal loan amount, plus accrued interest during the moratorium period, will be refunded by six (6) equal monthly instalments, commencing November 30, 1998. Expiration: April 30, 1999.

Security: Assignment of both export and local sales proceeds from the canned vegetables and fruit products financed, including a Promissory Note, and a Right of Set-Off on the company's accounts, at Ecobank Ghana Ltd (EBG).

Default Condition: Company is expected to refund the loan by six (6) equal monthly instalments, commencing November 30, 1998. Non-payment will constitute a default. Upon default, EBG reserves the right to call in the facility.

A special condition pertaining to the facility was that the fund, from which the loan was being disbursed, was being managed on behalf of the Ministry of Finance.

The special condition, thus stipulated that, “if for any reason, the agreement between ECOBANK Ghana, and the Ministry of Finance, should be terminated, further availments under the line, would be curtailed.

An agreement to this effect was, thus jointly signed by Miss Sherry Ayittey, a Director of Caridem Development Company Limited, on November 13, 1997, whilst the managing director of Ecobank (Gh) Limited initialed for the bank, on November 3, 1997.