¢36bn financial loss to the state- SFO report

The Serious Fraud Office 2004 Annual report says the state lost ¢36 billion due to impropriety on the part some state institutions.

The SFO investigated the collapse of the CDH Discount Limited and CDH Asset Management Limited.

It said the in August 2004 the Bank of Ghana froze the operations of CDH Financial holdings limited because it did not have an operating license.

In April the BOG revoked the license of the CDH Discount Limited for reasons including insolvency and illiquidity.

In April the securities and Exchange Commission (SEC) revoked the licence of CDH Asset Management Limited. The BoG subsequently requested the SFO to study its Inspection Report and to ascertain if the violations of the Banking Law 1989 and the Financial Institution Banking Law 1993 which formed the basis of the BoG's Inspection Reports indicated serious fraud against shareholders and depositors of the companies.

The request to investigate the facts and events, which eventually led to the failure of the indicated companies, offered the SFO another opportunity to examine a current typical white “ collar crime” involving a Ghanaian company.

The SFO investigations began in November 2004 and are on-going at the time of the report.

A number of significant findings however indicate gross violations of the regulations governing the operations of non-banking financial institutions in Ghana. These are:

Illegal loans transaction in both cedis and foreign currency in contravention of the Exchange control Act 1961, Act 71 and the Financial Institutions (Non Banking) Law, a total of US$4.450 million in foreign currency and ¢119 billion were given out as loans or advances, etc.

Of the US dollar loan, the sum of US $ 4 million was contracted to Ghana Airways Limited when the Managing Director of CDH Discount Limited was a member of the board of Ghana Airways.