The Serious Fraud Office (SFO) has uncovered a fraudulent scheme involving two Chinese fishing companies which has resulted in the loss of ¢313.36 billion to the state.
The companies are Afrik-Shandong Limited and Zhongha Fisheries Limited, incorporated in Ghana in August 1993 and July 1994, respectively.
A report by the SFO after months of investigations, a copy of which was made available to the Daily Graphic, also indicted the Ghanaian Deputy Managing Director of the two companies, Mr Emmanuel K. Appiah, and recommended his prosecution for “having orchestrated and masterminded this massive fraud on the people of Ghana”.
It further recommended the confiscation of the vessels and other assets of the two companies to the state, saying that their illegal profits in the country had already paid for those assets.
Their total liability to the state, in respect of evaded taxes and other non-tax related breaches, was calculated at £32,641,819.45 or ¢313.36b.
In its report on the activities of the two companies, the SFO said between 1994 and 1998, Afrik-Shandong Ltd landed and re-exported fish but refused to pay taxes totalling $7,974,338.83.
Zhongha Fisheries Ltd is said to have landed and re-exported fish between 1995 and 1999 and evaded $7,382,897.36 tax, bringing the total liability of the two companies to $15,357,236.19.
The report said the two companies were debarred by law from operating trawl-fishing vessels in Ghana and, accordingly, the entire catch must be forfeited to the state.
“It has been established beyond doubt that the operation of the two companies, Afrik-Shandong Limited and Zhongha Fisheries Limited, in Ghana for the past eight years is illegal,” said the report.
On its part, the Ghana Investment Promotion Centre said it had not granted the two companies any licence to do trawl fishing in Ghana and, indeed, it was unaware that the two companies were engaged in trawl fishing in the country.
The report described the profits made by the two companies in their operations in Ghana between 1993 and 2001 as supernormal and said they had more than paid for the overstated costs of their vessels.
The report also recommended that the activities of Mr Appiah, the Deputy Managing Director of the two companies, in having orchestrated and masterminded that massive fraud on the people of Ghana, must be looked at with all the seriousness it deserves.
It recommended that Mr Appiah be appropriately charged and prosecuted for falsification and misrepresentation and also for the recovery of the ill-gotten wealth from the rape of the Ghanaian fishing industry through the hijacking from its real owners of Alfatrust Investments Limited for his own benefit, as well as those of the foreign owners of Afrik-Shandong and Zhongha Limited, to the detriment of the whole nation.
When contacted, Mr Appiah said the SFO's work was politically motivated and that it started during the National Democratic Congress (NDC) era.
He alleged that because of his name Appiah, the then government thought he had something to do with the Ghanaian industrialist, Appiah Menka, who he said was disliked by the former President.
He said at that time, over 16 fishing companies were operating at the Tema Fishing Harbour but his company was singled out for the SFO's investigations.
Mr Appiah indicated that the companies were made to pay ¢106 billion to the SFO and when later they enquired about the state of affairs, they were told that there were no adverse findings against them so they thought the matter had been settled.
He said when the investigations were going on, the Income Tax Audit Unit also came to audit their accounts and they were made to pay $200,000 as penalty, after which they were exonerated.
“The Customs, Excise and Preventive Service (CEPS) also came in around that same time and we paid ¢980 million as custom duties and the receipts are there to show,” he stressed.
He said the two companies had paid all their taxes and were not owing anybody.
“It has been seven years now. If the SFO has anything against us, why have they not prosecuted us up to date ?” he asked.
According to him, apart from one Dr Edufo, who owns a vessel which he purchased from the State Fishing Corporation, no Ghanaian company owned a vessel, adding that the over 600 vessels operating in the country now were foreign vessels.
He also said that the SFO's claim that the companies imported fish into the country and re-exported it to other countries to sell was false explaining that that was not done anywhere.
The deputy director said the two companies had won six export awards because they were the only companies which repatriated all their earnings to the country.
He said the two companies were owned by the Chinese government and that their earnings and taxes were audited periodically by the Chinese Embassy in Ghana.
Story by Mary Mensah