President Kufuor by accessing the Highly Indebted Poor Countries (HIPC) Initiative has written off the debt owed Ghana by Rexol Group N.V and International Generic Company (IGC) limited, companies ultimately owned by Danny Tamman, a friend of the Rawlingses.
The debt has drowned two companies, La Palm Beach Hotel and Coco Palm Apartments in a mountain of debts and the ministry of Finance under former minister Kwame Peprah and the Bank of Ghana are entangled in it.
The Independent newspaper reported that the Export Credit Guarantee Department (ECGD) of the United Kingdom Loan Facilities that the Government of Ghana guaranteed in 1994/1995 for the construction of La Palm and Coco Palm Apartments seem missing in transit, now the paper says those loans really did not come into the construction of the two hotels.
The two ECDG loans of £15.8 million and £16.2 million came from the Royal Bank of Scotland and were meant for the two companies, Coco Palm Apartments and La Palm respectively.
However the monies were paid into the accounts of Internal Generics (IGC) Limited owned 100 per cent by Rexol International, a division of Rexol Group, N V. Rexol is owned by Danny Tamman, a friend of the Rawlingses.
Danny's father, the original owner of Rexol is reported to have been a godfather to wife of the former president Jerry Rawlings, Nana Konadu Agyeman Rawlings.
The Independent's search on the Internet revealed that “in 1994 the ECGD gave its support for the hotels, the UK House of Lord ruled in a case concerning the company's (Rexol) tax liability that it owned the UK Inland Revenue corporation tax of over £1 million.
To boost tourism, the Government of Ghana in 1994 sourced and on-lent the two loans to IGC and Rexol under a Divestiture Implementation Committee (DIC) sponsored deal, in which IGC was to purchase Star Hotel and Labadi Beach Hotel.
Star hotel was eventually pulled down to make way for Coco Palm and La Palm went for the abandoned concrete structures besides the Labadi Beach Hotel.
In the case of La Palm, the original plan was to pull down the abandoned concrete structure already on the grounds for a wholly new sprawling high rise hotel containing more than 144 rooms to be put up.
But the financial malfeasance was so obnoxious that “the project that was to take two years to build took seven years to finish”.
Even the old structure that Rexol/ICG bought together with the land is what was eventually transformed to what is today known as La Palm Beach Hotels, which contains 144 rooms.
That was after the tax payer's money in SSNIT had been used to bail out the sinking La Palm project when it (SSNIT) was dragged in to buy 70 per cent shares of the project from Rexol, which now owns only 30 per cent of the new entity that was created out of the financial mess and baptized Golden Beach Hotels limited.
La Palm still insists the original ECGD facility of £16.2 million did not come to it.
The hotel is battling a fierce legal dispute with some Ghanaian banks that were used in the syndication to raise monies intended to pay off part of the original ECGD loan from the Bank of Scotland.